0001607939-24-000037 | 10-K | XBRL Viewer

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Stockholders' equity - RSU and PSU Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Restricted Stock Units (RSUs)
Outstanding
Unvested beginning balance (in shares)	16,178,101
Granted (in shares)	8,159,808
Released (in shares)	(6,134,641)
Canceled (in shares)	(2,433,691)
Unvested ending balance (in shares)	15,769,577	16,178,101
Weighted Average Grant Date Fair Value
Unvested beginning balance (in USD per share)	$ 17.37
Granted (in USD per share)	9.86	$ 13.79	$ 27.64
Released (in USD per share)	16.42
Canceled (in USD per share)	15.93
Unvested ending balance (in USD per share)	$ 14.07	$ 17.37
Performance-Based Awards
Outstanding
Unvested beginning balance (in shares)	0
Granted (in shares)	645,833
Released (in shares)	0
Canceled (in shares)	0
Unvested ending balance (in shares)	645,833	0
Weighted Average Grant Date Fair Value
Unvested beginning balance (in USD per share)	$ 0
Granted (in USD per share)	8.89
Released (in USD per share)	0
Canceled (in USD per share)	0
Unvested ending balance (in USD per share)	$ 8.89	$ 0

Consolidated balance sheet components - Summary of Expected Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2024	$ 16,637
2025	10,905
2026	3,846
Total expected amortization	$ 31,388	$ 27,412

Revenue recognition

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue recognition

3. Revenue recognition

Deferred revenue—Revenue recognized for the fiscal year ended December 31, 2023, from amounts included in deferred revenue as of December 31, 2022 was $268.3 million. Revenue recognized for the fiscal year ended December 31, 2022, from amounts included in deferred revenue as of December 31, 2021 was $204.4 million. Revenue recognized for the fiscal year ended December 31, 2021, from amounts included in deferred revenue as of December 31, 2020 was $139.5 million.

The below table presents a summary of deferred revenue balances by reportable segment (in thousands):


	December 31,		December 31,		December 31,		December 31,
	2023		2022		2021		2020
Deferred revenue:
Enterprise	$	220,127	$	219,030	$	148,966	$	84,241
Consumer	62,287		59,249		61,588		58,135
Total deferred revenue	$	282,414	$	278,279	$	210,554	$	142,376

Remaining performance obligations— Remaining performance obligations represent the aggregate amount of the transaction price in contracts for performance obligations not delivered, or partially undelivered, as of the end of the reporting period. Remaining performance obligations primarily relate to deferred revenue as well as unbilled revenue from multi-year Enterprise subscription contracts with future installment payments, as well as unearned revenue from Consumer single course purchases and subscriptions at the end of any given period. As of December 31, 2023, the aggregate transaction price for remaining performance obligations was $552.3 million, of which 70% is expected to be recognized over the next twelve months and the remainder thereafter.

Deferred contract costs— The following table represents a roll forward of the Company’s deferred contract costs (in thousands):


	Balance at Beginning of Period		Additions		Amortization Expense		Balance at End of Period
Fiscal Year Ended December 31, 2023	$	65,645	$	56,890	$	(48,161)	$	74,374
Fiscal Year Ended December 31, 2022	$	44,545	$	53,379	$	(32,279)	$	65,645
Fiscal Year Ended December 31, 2021	$	25,837	$	36,509	$	(17,801)	$	44,545

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

Consolidated balance sheet components - Summary of Cash, Cash Equivalents, and Marketable Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Cash and Cash Equivalents [Line Items]
Amortized Cost	$ 476,860	$ 465,584
Unrealized Gains	76	34
Unrealized Losses	0	(246)
Fair Value	476,936	465,372
Unrealized loss position, fair value	0	84,017
Cash and cash equivalents:
Cash and Cash Equivalents [Line Items]
Amortized Cost	305,564	313,684
Unrealized Gains	0	4
Unrealized Losses	0	(3)
Fair Value	305,564	313,685
Unrealized loss position, fair value	0	24,960
Cash and cash equivalents: \| Cash
Cash and Cash Equivalents [Line Items]
Amortized Cost	38,872	134,408
Unrealized Gains	0	0
Unrealized Losses	0	0
Fair Value	38,872	134,408
Cash and cash equivalents: \| Money market funds
Cash and Cash Equivalents [Line Items]
Amortized Cost	266,692	130,377
Unrealized Gains	0	0
Unrealized Losses	0	0
Fair Value	266,692	130,377
Cash and cash equivalents: \| U.S. government securities
Cash and Cash Equivalents [Line Items]
Amortized Cost		48,899
Unrealized Gains		4
Unrealized Losses		(3)
Fair Value		48,900
Marketable securities: \| U.S. government securities
Cash and Cash Equivalents [Line Items]
Amortized Cost	171,296	151,900
Unrealized Gains	76	30
Unrealized Losses	0	(243)
Fair Value	171,372	151,687
Unrealized loss position, fair value	$ 0	$ 59,057

Consolidated balance sheet components - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 31,922	$ 32,182
Less accumulated depreciation and amortization	(27,483)	(25,170)
Property and equipment, net	4,439	7,012
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	19,064	19,109
Computers and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	7,770	7,820
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	4,705	4,870
Purchased software
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 383	$ 383

Restructuring charges - Summary of Restructuring Charges (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Restructuring Reserve [Roll Forward]
Restructuring charges	$ 10,100	$ 10,263	$ 0	$ 0
Employee Severance
Restructuring Reserve [Roll Forward]
Beginning balance	0	0
Restructuring charges	$ 8,900	9,055
Settlements		(9,055)
Ending balance		$ 0	$ 0

Stockholders' equity - Narrative (Details) $ / shares in Units, $ in Thousands			3 Months Ended		12 Months Ended
	Jan. 01, 2023 shares	Aug. 06, 2022 USD ($) shares	Dec. 31, 2023 USD ($) grant $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) vote grant period $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Jul. 11, 2022 $ / shares	Oct. 29, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock, shares authorized (in shares)			50,000,000	50,000,000	50,000,000	50,000,000
Preferred stock, par value (in dollars per share) \| $ / shares			$ 0.00001	$ 0.00001	$ 0.00001	$ 0.00001
Number of votes per common stock \| vote					1
Share-based payment arrangement, equity exchange participation rate			97.00%		97.00%
Stock-based compensation in capitalized costs \| $		$ 45,700			$ 9,175	$ 5,911	$ 2,571
Aggregate intrinsic value of options exercised in period \| $					45,600	13,700	59,700
Aggregate intrinsic value exercised \| $					$ 300	$ 0	0
Total shares of common stock reserved (in shares)			27,803,828	31,255,576	27,803,828	31,255,576
Stock-based compensation \| $					$ 96,046	$ 81,293	34,680
Stock-based compensation capitalized as a software \| $					$ 9,000	$ 5,800	2,500
Tender Offer to Sell Common Stock to an Investor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation \| $							$ 1,600
Initial public offering, price per share (in dollars per share) \| $ / shares							$ 23.75
Tender Offer To Sell Vested Stock Options And Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares sold in initial public offering (in shares)							236,086
Other Equity Transaction
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation \| $							$ 4,000
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)					4 years
Contractual term (in years)					10 years
Stock options outstanding (in shares)			4,621,021	10,333,771	4,621,021	10,333,771
Stock Appreciation Rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)					4 years
Contractual term (in years)					10 years
Granted (in shares)					0	0
Weighted average grant date fair value (in dollars per share) \| $ / shares							$ 22.47
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, conversion basis								1
Share-based payment arrangement, shares exchanged		6,958,544
Granted (in shares)					8,159,808
Granted (in USD per share) \| $ / shares					$ 9.86	$ 13.79	$ 27.64
Fair value of shares vested \| $					$ 68,400		$ 50,700
Unrecognized compensation costs, excluding options \| $			$ 192,400		$ 192,400
Unrecognized compensation costs, period for recognition (in years)					2 years 8 months 12 days
Restricted stock issued for business combination, grant date fair value (in dollars per share) \| $ / shares			$ 14.07	$ 17.37	$ 14.07	17.37
Restricted Stock Units (RSUs) \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting date		2 years
Award vesting period (in years)					3 years
Restricted Stock Units (RSUs) \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting date		3 years
Award vesting period (in years)					4 years
Performance-Based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)					645,833
Number of shares right to receive (in shares)					1
Award vesting rights, percentage					75.00%
Corporate performance metric attainment percentage			0.70		0.70
Granted (in USD per share) \| $ / shares					$ 8.89
Unrecognized compensation costs, excluding options \| $			$ 2,000		$ 2,000
Unrecognized compensation costs, period for recognition (in years)					1 year 4 months 24 days
Contractual term (in years)					10 years
Number of grants \| grant			1		1
Restricted stock issued for business combination, grant date fair value (in dollars per share) \| $ / shares			$ 8.89	$ 0	$ 8.89	$ 0
Performance-Based Awards \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage					0.00%
Performance-Based Awards \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage					150.00%
Performance-Based Awards \| Share-based Payment Arrangement, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage					25.00%
Contingently issuable shares under ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs, excluding options \| $			$ 8,100		$ 8,100
Unrecognized compensation costs, period for recognition (in years)					1 year 6 months
Total shares of common stock reserved (in shares)	1,450,137								2,800,000
Minimum annual increase in shares reserved for issuance					1.00%
Percent of outstanding shares					300.00%
ESPP discount percentage from market price, beginning of purchase period					15.00%
Share-based compensation arrangement by share-based payment award, consecutive offering period					24 months
Share-based compensation arrangement by share-based payment award, number of purchase periods \| period					4
Share-based compensation arrangement by share-based payment award, purchase period					6 months
ESPP purchase price of common stock, percent of market price					85.00%
Shares issued (in shares)					1,029,344
Incremental compensation cost \| $					$ 5,900	$ 3,400
Restricted stock \| CorpU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation \| $			$ 2,100	$ 2,100
Restricted stock issued for business combination (in shares)							61,300
Restricted stock issued for business combination, grant date fair value (in dollars per share) \| $ / shares							$ 34.14
Share-based Payment Arrangement, Option and Stock Appreciation Rights (SARs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, option and non-option equity instruments, exercise price range, outstanding, weighted average exercise price \| $ / shares								$ 11.13
2021 Stock incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares reserved for future issuance (in shares)			13,800,000		13,800,000
Annual percentage increase, term					0.05
Number of shares reserved for future issuance increased (in shares)	7,250,689
Weighted average grant date fair value, options (in USD per share) \| $ / shares							$ 16.01
Stock options outstanding (in shares)			4,571,021	10,283,771	4,571,021	10,283,771
Amended and Restated 2010 Equity Incentive Plan \| Performance-Based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options outstanding (in shares)			50,000	50,000	50,000	50,000

Subsequent events	12 Months Ended
Subsequent events	Dec. 31, 2023
Subsequent Events [Abstract]
Subsequent events	16. Subsequent events On February 14, 2024, the Company’s Board of Directors approved a share repurchase program (the “Repurchase Program”) with authorization to purchase up to $100 million of Udemy common stock. The Company may repurchase shares of common stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The number of shares to be repurchased and the timing of the repurchases, if any, will depend on several factors, including, without limitation, business, economic, and market conditions, corporate, legal, and regulatory requirements, prevailing stock prices, trading volume, and other considerations. The Repurchase Program may be suspended or discontinued at any time and does not obligate the Company to acquire any amount of common stock. The Company plans to fund the Repurchase Program with existing cash and cash equivalents.

Commitment and contingencies - Schedule of Future Noncancellable Commitments (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2024	$ 34,312
2025	25,572
2026	3,132
Total purchase commitments	63,016
Contractual obligation	28,700
Contractual obligation	45,000
Non-cancelable purchase commitment	$ 12,000

Related party transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Related Party Transaction [Line Items]
Revenue	$ 728,937	$ 629,097	$ 515,657
Accounts receivable, net	92,555	104,530
General and administrative	$ 93,898	99,064	64,410
Naspers
Related Party Transaction [Line Items]
Ownership percentage	5.00%
Affiliated Entity \| Naspers Ltd. and Other Entity
Related Party Transaction [Line Items]
Revenue	$ 1,900	1,500	1,500
Affiliated Entity \| Certain Vendors
Related Party Transaction [Line Items]
General and administrative	800	900	$ 900
Board of Directors \| Insight Partners
Related Party Transaction [Line Items]
Revenue	700
Accounts receivable, net	200
Board of Directors \| Enterprise Subscription Offering
Related Party Transaction [Line Items]
Revenue	400	500
Accounts receivable, net	$ 400	$ 400

Consolidated balance sheet components - Summary of Expected Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2024	$ 2,795
2025	917
2026	917
2027	594
Total expected amortization	$ 5,223	$ 9,331

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2023
Audit Information [Abstract]
Auditor Firm ID	34
Auditor Name	DELOITTE & TOUCHE LLP
Auditor Location	San Francisco, California

Income taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Current
Federal	$ 0	$ 0	$ 0
State	324	45	183
Foreign	3,494	2,241	1,149
Total current income tax expense	3,818	2,286	1,332
Deferred:
Federal	0	0	0
State	0	0	0
Foreign	(165)	0	(149)
Total deferred income tax benefit	(165)	0	(149)
Total provision for income taxes	$ 3,653	$ 2,286	$ 1,183

Summary of significant accounting policies - Narrative (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($) segment	Dec. 31, 2021 USD ($) segment
Concentration Risk [Line Items]
Number of operating segments \| segment			2	2	2
Number of reportable segments \| segment			2	2	2
Consumer subscription trail period			7 days
Refund term			30 days
Advertising cost			$ 82,500	$ 97,000	$ 105,200
Amortization period			4 years
Impairment of strategic investment	$ 1,800	$ 2,900
Self insurance			$ 1,300
Operating lease right-of-use assets			5,691	$ 11,377
Operating lease liabilities			$ 6,949
Minimum
Concentration Risk [Line Items]
Consumer subscription term			1 month
Maximum
Concentration Risk [Line Items]
Consumer subscription term			1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Concentration Risk [Line Items]
Revenue, remaining performance obligation, period			12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Concentration Risk [Line Items]
Revenue, remaining performance obligation, period
Consumer Single Course Purchases \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Concentration Risk [Line Items]
Revenue, remaining performance obligation, period			4 months
Computers and equipment
Concentration Risk [Line Items]
Estimated useful lives			3 years
Purchased software
Concentration Risk [Line Items]
Estimated useful lives			3 years
Equipment
Concentration Risk [Line Items]
Estimated useful lives			3 years
Furniture and fixtures
Concentration Risk [Line Items]
Estimated useful lives			5 years
Software Development
Concentration Risk [Line Items]
Estimated useful lives			3 years

Segment and geographic information - Summary of Long-lived Assets by Region (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Segment Reporting Information [Line Items]
Total long-lived assets	$ 10,116	$ 18,338
North America
Segment Reporting Information [Line Items]
Total long-lived assets	7,007	12,782
Rest of world
Segment Reporting Information [Line Items]
Total long-lived assets	$ 3,109	$ 5,556

Leases - Summary of Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Leases [Abstract]
2024	$ 5,922
2025	809
2026	410
Gross lease payments	7,141
Less imputed interest	(192)
Present value of operating lease liabilities	$ 6,949

Stockholders' equity (Tables)

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Common Stock Reserved for Future Issuance

Shares of common stock reserved for future issuance consisted of the following:


	December 31,	December 31,
	2023	2022
2010 Equity Incentive Plan:
Stock options outstanding	4,621,021	10,333,771
2021 Equity Incentive Plan:
RSUs outstanding and PSUs(1)	16,738,309	16,178,101
Shares available for future issuance under:
2021 Equity Incentive Plan	4,093,695	2,814,126
2021 Employee Stock Purchase Plan	2,350,803	1,929,578
Total shares of common stock reserved	27,803,828	31,255,576
(1) The number of PSUs reserved for issuance is based on the maximum achievement of the corporate performance metric.

Summary of Option Activity

The following is a summary of activity for stock options having only service-based vesting conditions under the Equity Incentive Plans:


	Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (In Thousands)
Balance - December 31, 2022	10,283,771	$	4.18	6.38	$	66,234
Granted	—	—
Exercised	(5,477,153)	3.29
Canceled	(235,597)	7.58
Balance - December 31, 2023	4,571,021	$	5.08	3.23	$	44,309
Vested & expected to vest as of December 31, 2023	4,571,021	$	5.08	3.23	$	44,309
Exercisable as of December 31, 2023	4,405,278	$	4.96	3.23	$	43,157

Summary of Weighted Average Assumptions, Options

The following table summarizes the weighted-average assumptions used in the Black-Scholes option-pricing model to estimate the fair value of the Exchanged Awards as of August 6, 2022:


Risk-free interest rate			3.0%
Expected volatility			68.6%
Expected life (in years)			4.9
Expected dividend yield			—%

The calculation of grant date fair value of stock options was based on the following weighted average assumptions:


	Fiscal Year Ended December 31,
	2021
Risk-free interest rate	1.0	%
Expected volatility	60.5	%
Expected life (in years)	6.0
Expected dividend yield	—	%

The Company estimates the fair value of stock-based compensation for SARs by utilizing the Black-Scholes option-pricing model as described above. The calculation of grant date fair value was based on the following weighted average assumptions:


	Fiscal Year Ended December 31,
	2021
Risk-free interest rate	1.5	%
Expected volatility	60.9	%
Expected life (in years)	6.2
Expected dividend yield	—	%

The following table summarizes the weighted-average assumptions used in the Black-Scholes option-pricing model to estimate the grant date fair value of employee stock purchase rights granted under new ESPP offering periods in each year:


	Fiscal Year Ended December 31,
	2023	2022	2021
Risk-free interest rate	4.6%	3.5%	0.3%
Expected volatility	68.6%	68.5%	61.2%
Expected life (in years)	1.6	1.2	1.2
Expected dividend yield	—%	—%	—%

Summary of Stock Appreciation Rights

The following is a summary of activity for SARs under the Equity Incentive Plans:


	SARs Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (In Thousands)
Balance - December 31, 2022	81,770	$	5.44	6.90	$	418
Granted	—	—
Exercised	(67,781)	5.30
Canceled	(9,289)	6.58
Balance - December 31, 2023	4,700	$	5.11	5.98	$	45
Vested & expected to vest as of December 31, 2023	4,700	$	5.11	5.98	$	45
Exercisable as of December 31, 2023	4,558	$	5.06	5.97	$	44

Summary of Restricted Stock Unit Activity

A summary of RSU and PSU activity under the 2021 Plan is as follows:


	RSUs Outstanding	Weighted Average Grant Date Fair Value		PSUs Outstanding	Weighted Average Grant Date Fair Value
Unvested - December 31, 2022	16,178,101	$	17.37	—	$	—
Granted	8,159,808	$	9.86	645,833	$	8.89
Released	(6,134,641)	$	16.42	—	$	—
Canceled	(2,433,691)	$	15.93	—	$	—
Unvested - December 31, 2023	15,769,577	$	14.07	645,833	$	8.89

Summary of Performance-Based Options

The following table summarizes the activities of Performance-Based Options under the Equity Incentive Plans:


	Performance-Based Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (In Thousands)
Balance - December 31, 2022	50,000	$	3.06	5.58	$	375
Granted	—	—
Exercised	—	—
Canceled	—	—
Balance - December 31, 2023	50,000	$	3.06	4.58	$	584
Vested & expected to vest as of December 31, 2023	50,000	$	3.06	4.58	$	584
Exercisable as of December 31, 2023	26,041	$	3.06	4.58	$	304

Summary of Stock-Based Compensation Expense

Total stock-based compensation expense included in the consolidated statements of operations was as follows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Cost of revenue	$	7,006	$	5,360	$	1,623
Sales and marketing	30,859		29,054		8,637
Research and development	26,301		20,850		6,816
General and administrative	30,672		26,029		17,604
Restructuring charges	1,208		—		—
Total stock-based compensation expense	$	96,046	$	81,293	$	34,680

Consolidated balance sheet components - Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) security	Dec. 31, 2022 USD ($) security	Dec. 31, 2021 USD ($)	Aug. 24, 2021 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Realized gains and losses reclassified from accumulated other comprehensive loss to other income (expense), net	$ 0	$ 0
Number of continuous unrealized loss position for twelve months or longer \| security	0	0
Depreciation	$ 3,000	$ 4,300	$ 4,500
Amortization of capitalized software	17,500	12,600	9,300
Amortization of intangible assets	4,100	4,300	$ 1,500
Goodwill	$ 12,646	$ 12,646
CorpU
Acquired Finite-Lived Intangible Assets [Line Items]
Goodwill				$ 12,600

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Redeemable convertible preferred stock, beginning balance (in shares) at Dec. 31, 2020	85,391,338
Redeemable convertible preferred stock, beginning balance at Dec. 31, 2020	$ 274,104
Increase (Decrease) in Temporary Equity [Roll Forward]
Exercise of Series A-1 redeemable convertible preferred stock warrants (in shares)	12,595
Exercise of Series A-1 redeemable convertible preferred stock warrants	$ 163
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares)	(85,403,933)
Conversion of redeemable convertible preferred stock to common stock upon initial public offering	$ (274,267)
Redeemable convertible preferred stock, ending balance (in shares) at Dec. 31, 2021	0
Redeemable convertible preferred stock, ending balance at Dec. 31, 2021	$ 0
Beginning balance (in shares) at Dec. 31, 2020		35,627,503
Beginning balance at Dec. 31, 2020	(260,685)	$ 0	$ 117,818	$ 0	$ (378,503)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares)		85,403,933
Conversion of redeemable convertible preferred stock to common stock upon initial public offering	274,267	$ 1	274,266
Issuance of common stock in connection with initial public offering, net of issuance costs and underwriting discount (in shares)		15,150,000
Issuance of common stock in connection with initial public offering, net of issuance costs and underwriting discount	408,416		408,416
Stock-based compensation	36,701		36,701
Exercise of stock options (in shares)		2,921,957
Exercise of stock options	11,028		11,028
Vesting of restricted stock units (in shares)		61,300
Cumulative translation adjustment	(1)			(1)
Net loss attributable to common stockholders	(80,026)				(80,026)
Ending balance (in shares) at Dec. 31, 2021		139,164,693
Ending balance at Dec. 31, 2021	$ 389,700	$ 1	848,229	(1)	(458,529)
Redeemable convertible preferred stock, ending balance (in shares) at Dec. 31, 2022	0
Redeemable convertible preferred stock, ending balance at Dec. 31, 2022	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	87,152		87,152
Exercise of stock options (in shares)		1,569,999
Exercise of stock options	7,004		7,004
Vesting of restricted stock units (in shares)		3,408,672
Vesting of restricted stock units	307	$ 0	307
Issuances of common stock under employee stock purchase plan (in shares)		870,422
Reclassification of stock appreciation rights	62		62
Issuance of common stock under employee stock purchase plan	9,192		9,192
Other comprehensive income (loss)	(232)			(232)
Cumulative translation adjustment	(20)
Net loss attributable to common stockholders	(153,875)				(153,875)
Ending balance (in shares) at Dec. 31, 2022		145,013,786
Ending balance at Dec. 31, 2022	$ 339,310	$ 1	951,946	(233)	(612,404)
Redeemable convertible preferred stock, ending balance (in shares) at Dec. 31, 2023	0
Redeemable convertible preferred stock, ending balance at Dec. 31, 2023	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	104,772		104,772
Exercise of stock options (in shares)		5,477,153
Exercise of stock options	17,996		17,996
Vesting of restricted stock units (in shares)		6,134,641
Vesting of restricted stock units	512	$ 1	511
Issuances of common stock under employee stock purchase plan (in shares)		1,029,344
Issuance of common stock under employee stock purchase plan	8,043		8,043
Shares withheld related to net share settlement of equity awards (in shares)		(488,564)
Shares withheld related to net share settlement of equity awards	(6,760)		(6,760)
Other comprehensive income (loss)	313			313
Cumulative translation adjustment	25
Net loss attributable to common stockholders	(107,294)				(107,294)
Ending balance (in shares) at Dec. 31, 2023		157,166,360
Ending balance at Dec. 31, 2023	$ 356,892	$ 2	$ 1,076,508	$ 80	$ (719,698)

Investments and fair value measurements - Summary of the Changes in the Fair Value of Level 3 Financial Instruments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Strategic Investments
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance			$ 0
Exercise of redeemable convertible preferred stock warrants			0
Vesting and remeasurement of SARs	$ 0	$ 0	0
Exercises of SARs	0
Amount reclassified from liability to equity upon exchange		0
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	12,104	10,000
Unrealized loss on strategic investments	(1,793)	(2,896)
Purchases of strategic investments		5,000	10,000
Ending balance	10,311	12,104	10,000
Stock Appreciation Rights
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	462	818	268
Exercise of redeemable convertible preferred stock warrants			0
Vesting and remeasurement of SARs	(161)	(294)	550
Exercises of SARs	(253)
Amount reclassified from liability to equity upon exchange		(62)
Unrealized loss on strategic investments	0	0
Ending balance	48	462	818
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Purchases of strategic investments		0	0
Warrants
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	0	0	160
Exercise of redeemable convertible preferred stock warrants			(160)
Vesting and remeasurement of SARs	0	0	0
Exercises of SARs	0
Amount reclassified from liability to equity upon exchange		0
Unrealized loss on strategic investments	0	0
Ending balance	$ 0	0	0
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Purchases of strategic investments		$ 0	$ 0

Insider Trading Arrangements	3 Months Ended	12 Months Ended
Insider Trading Arrangements	Dec. 31, 2023 shares	Dec. 31, 2023 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Eren Bali [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		On December 15, 2023, Eren Bali, a member of our Board of Directors, adopted a Rule 10b5-1 trading arrangement providing for the sale of an aggregate of up to 1,230,000 shares of our common stock. The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c). The first date that sales of any shares are permitted to be sold under the trading arrangement will be March 15, 2024, and subsequent sales under the trading arrangement may occur on a regular basis for the duration of the trading arrangement until February 28, 2025, or earlier if all transactions under the trading arrangement are completed.
Name	Eren Bali
Title	Board of Directors
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	December 15, 2023
Arrangement Duration	350 days
Aggregate Available	1,230,000	1,230,000

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities:
Net loss attributable to common stockholders	$ (107,294)	$ (153,875)	$ (80,026)
Adjustments to reconcile net loss attributable to common stockholders to net cash used in operating activities:
Depreciation and amortization	24,588	21,216	15,297
Amortization of deferred contract costs	48,161	32,279	17,801
Stock-based compensation	96,046	81,293	34,680
Allowance for credit losses	1,662	960	326
Accretion of marketable securities	(7,492)	(896)	0
Non-cash operating lease expense	5,856	6,205	0
Unrealized loss on strategic investments	1,793	2,896	0
Other	1,178	690	0
Changes in operating assets and liabilities:
Accounts receivable	10,313	(32,309)	(27,000)
Prepaid expenses and other assets	(5,831)	(4)	(9,903)
Deferred contract costs	(56,890)	(53,379)	(36,508)
Accounts payable, accrued expenses and other liabilities	(14,429)	(28,620)	7,272
Content costs payable	2,967	1,349	4,389
Operating lease liabilities	(6,768)	(6,487)	0
Deferred revenue	4,135	67,725	66,568
Net cash used in operating activities	(2,005)	(60,957)	(7,104)
Cash flows from investing activities:
Purchases of marketable securities	(307,706)	(158,503)	0
Proceeds from maturities of marketable securities	295,800	7,500	0
Purchases of property and equipment	(632)	(1,564)	(5,335)
Capitalized software costs	(12,434)	(14,160)	(12,868)
Purchases of strategic investments	0	(5,000)	(10,000)
Payments related to business combinations	0	(1,500)	(24,490)
Net cash used in investing activities	(24,972)	(173,227)	(52,693)
Cash flows from financing activities:
Net proceeds from exercise of stock options	17,911	7,149	10,878
Taxes paid related to net share settlement of equity awards	(6,760)	0	0
Net proceeds from issuance of redeemable convertible preferred stock	0	0	2
Proceeds from share purchases under employee stock purchase plan	8,044	9,192	0
Payment of redeemable convertible preferred stock issuance costs	0	0	(2,250)
Payment of deferred offering costs	0	(1,586)	(5,183)
Cash proceeds from initial public offering	0	0	415,187
Net cash provided by financing activities	19,195	14,755	418,634
Effect of foreign exchange rates on cash flows	20	(25)	0
Net increase (decrease) in cash, cash equivalents and restricted cash	(7,762)	(219,454)	358,837
Cash, cash equivalents and restricted cash—Beginning of period	317,314	536,768	177,931
Cash, cash equivalents and restricted cash—End of period	309,552	317,314	536,768
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	305,564	313,685	533,868
Restricted cash, current	3,329	0	0
Restricted cash, non-current	659	3,629	2,900
Total cash, cash equivalents and restricted cash	309,552	317,314	536,768
Supplemental disclosures of cash flow information:
Interest paid	3,188	23	90
Income taxes paid	1,418	678	385
Supplemental disclosure of non-cash investing and financing activities:
Stock-based compensation in capitalized costs	9,175	5,911	2,571
Net change in unrealized gain (loss) on marketable securities	289	(213)	0
Unpaid deferred offering costs	0	0	1,586
Acquisition holdback liability	$ 0	$ 0	$ 1,500

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized (in shares)	950,000,000	950,000,000
Common stock, shares issued (in shares)	157,166,360	145,013,786
Common stock, shares outstanding (in shares)	157,166,360	145,013,786

Segment and geographic information - Summary of Revenue by Region (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Revenue	$ 728,937	$ 629,097	$ 515,657
North America
Segment Reporting Information [Line Items]
Revenue	291,655	256,547	199,268
Europe, Middle East, Africa
Segment Reporting Information [Line Items]
Revenue	221,699	189,618	168,612
Asia Pacific
Segment Reporting Information [Line Items]
Revenue	163,747	137,829	107,924
Latin America
Segment Reporting Information [Line Items]
Revenue	$ 51,836	$ 45,103	$ 39,853

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479941/924-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

Summary of significant accounting policies (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Summary of Allowance for Credit Losses


	Balance at Beginning of Period		Charged to Expenses		Charges Utilized/Written-off, Net of Recoveries		Balance at End of Period
Allowance for credit losses (in thousands)
Fiscal Year Ended December 31, 2023	$	1,528	$	1,662	$	(1,920)	$	1,270
Fiscal Year Ended December 31, 2022	$	678	$	960	$	(110)	$	1,528
Fiscal Year Ended December 31, 2021	$	643	$	326	$	(291)	$	678

Organization and description of business	12 Months Ended
Organization and description of business	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and description of business	1. Organization and description of business Description of business Udemy, Inc. (“Udemy” or the “Company”) was incorporated in January 2010 under the laws of the state of Delaware. The Company is headquartered in San Francisco, California. Udemy is a global learning company whose online platform empowers organizations and individuals with flexible and effective skill acquisition and development. The Company’s learning marketplace platform enables tens of thousands of subject matter experts to develop, distribute and enhance content that reaches Udemy’s broad global audience of learners. Udemy leverages technology, data and insights to deliver personalized and effective learning experiences. The Company further curates its highest-quality content from the marketplace for Udemy Business, which enables companies around the world to offer engaging, effective, on-demand learning for all employees, immersive laboratory-style learning for tech teams, and cohort-based learning focused on leadership development.

Income taxes - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
Income taxes - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Operating Loss Carryforwards [Line Items]
Effective income tax rate, percent	(3.52%)	(1.51%)	(1.50%)
Valuation allowance	$ 150,915	$ 129,453
Valuation allowance increase	21,500
Research and development tax credits	28,645	20,412
Unrecognized tax benefits	7,232	5,310	$ 3,608	$ 10,580
Potential tax associated with foreign earnings being repatriated	500
Domestic Tax Authority
Operating Loss Carryforwards [Line Items]
Net operating loss carryforward	160,600
Net operating loss carryforward subject to expiration	72,400
Net operating loss carryforward not subject to expiration	88,200
Research and development tax credits	23,200
Domestic Tax Authority \| Tax Year 2010-2012
Operating Loss Carryforwards [Line Items]
Net operating loss carryforward subject to expiration	3,400
State and Local Jurisdiction
Operating Loss Carryforwards [Line Items]
Net operating loss carryforward		$ 41,400
Research and development tax credits	$ 15,300

Accrued expenses and other current liabilities

12 Months Ended

Dec. 31, 2023

Payables and Accruals [Abstract]

Accrued expenses and other current liabilities

7. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):


	December 31,		December 31,
	2023		2022
Accrued expenses	$	13,773	$	8,494
Indirect tax reserves	1,432		6,627
Indirect tax payables	8,758		9,137
Other current liabilities	3,815		6,989
Accrued expenses and other current liabilities	$	27,778	$	31,247

Indirect tax payables relate to amounts collected from customers on behalf of third-party taxing authorities, primarily on sales in the U.S. and in international jurisdictions. Indirect tax payables also include withholding taxes on payments made to the Company’s instructors before remitting these amounts to the taxing authorities.

Instructor withholding tax reserves—

Prior to March 2020, the Company had not obtained appropriate taxpayer identification forms from instructors, nor remitted applicable tax withholding amounts to the U.S. Internal Revenue Service (“IRS”) where required. In accordance with GAAP, the Company recorded a provision for its tax exposure when it was both probable that a liability had been incurred and the amount of the exposure could be reasonably estimated.

Beginning in March 2020, the Company began collecting appropriate taxpayer identification forms from its instructors, assessing whether the forms justified a reduced rate of withholding or withholding exemption, and remitting withholding tax payments to the IRS where required. The Company also began reporting payments to its instructors and the IRS annually where required to do so.

In 2020, the Company approached the IRS to address the historical tax withholding amounts for instructors and engaged in a voluntary disclosure program. As of December 31, 2023, the Company has filed all outstanding withholding tax returns and has paid the associated tax obligation and corresponding interest to the IRS. The Company received a closing letter from the IRS on the matter during the fiscal year ended December 31, 2023, and considered the matter resolved as of December 31, 2023.

Changes to the instructor withholding tax reserve are as follows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Balance, beginning of period	$	2,528	$	17,036	$	22,166
Amounts charged to (released from) expense	89		(781)		(5,130)
Net payments and settlements	(2,617)		(13,727)		—
Balance, end of period	$	—	$	2,528	$	17,036

Revenue recognition (Tables)

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Summary of Deferred Revenue Balances by Reportable Segment

The below table presents a summary of deferred revenue balances by reportable segment (in thousands):


	December 31,		December 31,		December 31,		December 31,
	2023		2022		2021		2020
Deferred revenue:
Enterprise	$	220,127	$	219,030	$	148,966	$	84,241
Consumer	62,287		59,249		61,588		58,135
Total deferred revenue	$	282,414	$	278,279	$	210,554	$	142,376

Summary of Deferred Contract Costs

The following table represents a roll forward of the Company’s deferred contract costs (in thousands):


	Balance at Beginning of Period		Additions		Amortization Expense		Balance at End of Period
Fiscal Year Ended December 31, 2023	$	65,645	$	56,890	$	(48,161)	$	74,374
Fiscal Year Ended December 31, 2022	$	44,545	$	53,379	$	(32,279)	$	65,645
Fiscal Year Ended December 31, 2021	$	25,837	$	36,509	$	(17,801)	$	44,545

Stockholders' equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation	$ 96,046	$ 81,293	$ 34,680
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation	7,006	5,360	1,623
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation	30,859	29,054	8,637
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation	26,301	20,850	6,816
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation	30,672	26,029	17,604
Restructuring charges
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation	$ 1,208	$ 0	$ 0

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

The domestic and foreign components of income (loss) before provision for income taxes consisted of the following (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Domestic	$	(110,640)	$	(155,528)	$	(80,243)
Foreign	6,999		3,939		1,400
Total net loss before taxes	$	(103,641)	$	(151,589)	$	(78,843)

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes consisted of the following (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Current
Federal	$	—	$	—	$	—
State	324		45		183
Foreign	3,494		2,241		1,149
Total current income tax expense	3,818		2,286		1,332
Deferred:
Federal	—		—		—
State	—		—		—
Foreign	(165)		—		(149)
Total deferred income tax benefit	(165)		—		(149)
Total provision for income taxes	$	3,653	$	2,286	$	1,183

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation between the statutory federal income tax rate and the Company’s effective tax rate as a percentage of loss before income taxes is as follows:


	Fiscal Year Ended December 31,
	2023		2022		2021
Federal tax expense	21.00	%	21.00	%	21.00	%
State taxes, net of federal benefit	0.50	%	1.24	%	1.07	%
Foreign rate differential	(1.40)	%	(0.33)	%	(0.12)	%
Withholding taxes	(1.77)	%	(0.60)	%	(0.78)	%
Nondeductible compensation	(10.20)	%	(2.52)	%	(5.29)	%
Stock-based compensation	(1.84)	%	(3.18)	%	0.27	%
Change in valuation allowance	(18.33)	%	(21.41)	%	(34.54)	%
Research and development credits	7.94	%	4.69	%	16.87	%
Nontaxable dividends	1.31	%	—	%	—	%
Other	(0.73)	%	(0.40)	%	0.02	%
Effective tax rate	(3.52)	%	(1.51)	%	(1.50)	%

Schedule of Deferred Tax Assets and Liabilities

Significant components of the net deferred tax assets (liabilities) for the fiscal years ended December 31, 2023 and 2022, consisted of the following (in thousands):


	December 31,
	2023		2022
Deferred tax assets:
Accruals and reserves	$	4,409	$	5,107
Deferred revenue	62,000		61,285
Net operating loss	36,508		30,047
Research and development tax credits	28,645		20,412
Stock-based compensation expense	6,242		7,995
Indirect tax reserves	240		1,496
Property and equipment, net	2,000		2,031
Capitalized research and development costs	35,505		23,475
Operating lease liabilities	1,460		2,767
Other	564		491
Gross deferred tax assets	177,573		155,106
Valuation allowance	(150,915)		(129,453)
Total deferred tax assets	26,658		25,653
Deferred tax liabilities:
Deferred contract costs	(16,791)		(14,814)
Operating lease right-of-use-assets	(1,129)		(2,245)
Other deferred tax liabilities	(8,573)		(8,594)
Total deferred tax liabilities	(26,493)		(25,653)
Net deferred tax assets	$	165	$	—

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending balance of unrecognized tax benefit is as follows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Gross unrecognized tax benefits at the beginning of the year	$	5,310	$	3,608	$	10,580
Increases (decreases) related to prior year tax positions	58		224		(7,892)
Increases related to current year tax positions	1,864		1,478		920
Statues of limitations expirations	—		—		—
Gross unrecognized tax benefits at the end of the year	$	7,232	$	5,310	$	3,608

Segment and geographic information - Narrative (Details) - segment	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Segment Reporting [Abstract]
Number of operating segments	2	2	2
Number of reportable segments	2	2	2

Employee retirement plan	12 Months Ended
Employee retirement plan	Dec. 31, 2023
Retirement Benefits [Abstract]
Employee retirement plan	10. Employee retirement plan The Company maintains a 401(k) retirement savings plan covering eligible employees. Employee contributions to the plan consist of a percentage based on eligible employee compensation. Beginning in 2023, the Company began matching 50% of an employee’s contribution up to 4% of the employee’s eligible compensation, with no vesting requirements. Prior to 2023, the Company matched 25% of an employee’s contribution up to 6% of the employee’s compensation, with a cap of $500 annually, subject to a two-year graded vesting schedule that vested 50% after an employee’s first year of employment and 100% after two years of employment. The Company contributed $3.0 million, $0.5 million and $0.4 million for the fiscal years ended December 31, 2023, 2022, and 2021, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//715/tableOfContent

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480266/715-60-50-3

+ Details

Summary of significant accounting policies (Policies)	12 Months Ended
Summary of significant accounting policies (Policies)	Dec. 31, 2023
Accounting Policies [Abstract]
Basis of consolidation and presentation	Basis of consolidation and presentation— The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation, and all other normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results of the periods presented have been made.
Segment information	Segment information— On March 1, 2023, Greg Brown succeeded Gregg Coccari as the Company’s Chief Executive Officer and chief operating decision maker (“CODM”). The Company defines its segments as those operations the CODM regularly reviews to allocate resources and assess performance. For the fiscal years ended December 31, 2023, 2022, and 2021, the Company operated under two operating and reportable segments: Enterprise and Consumer. The Company continually monitors and reviews its segment reporting structure in accordance with Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, to determine whether any changes have occurred that would impact its reportable segments. For further information on the Company’s segment reporting, see Note 14 – Segment and geographic information.
Use of estimates	Use of estimates— The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the results of operations during the reporting periods. Significant estimates and assumptions reflected in the consolidated financial statements include, but are not limited to, allowance for credit losses, capitalization of internally developed software and associated useful lives, stock-based compensation, determination of the income tax valuation allowance and the potential outcome of uncertain tax positions, estimated service period for consumer single course purchases, the period of benefit for deferred commissions, the fair value and associated useful lives of intangible assets and goodwill acquired via business combinations, the valuation of privately-held strategic investments, including impairments, and the carrying value of our operating lease right-of-use (“ROU”) assets. Management periodically evaluates such estimates and assumptions for continued reasonableness. Actual results may ultimately differ from management’s estimates and such differences could be material to the Company’s financial position and results of operations.
Concentration of credit risk	Concentration of credit risk— Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, restricted cash, and accounts receivable. For cash and restricted cash, the Company is exposed to credit risk in the event of default by the financial institutions to the extent the amounts recorded on the accompanying consolidated balance sheets are in excess of federal insurance limits. The Company’s investments that are classified as cash equivalents and marketable securities consist of high-credit-quality instruments and fixed-income securities. The Company generally does not require collateral or other security in support of accounts receivable. To reduce credit risk, management performs ongoing evaluations of its customers’ financial condition and maintains an allowance based upon expected credit losses of outstanding receivables.
Revenue recognition and Cost of revenues	Revenue recognition— The Company accounts for revenue under ASC Topic 606, Revenue from Contracts with Customers. The Company’s two sources of revenues are its Enterprise and Consumer business channels. Enterprise revenue— The Company primarily generates revenue by selling subscription licenses to a variety of enterprise and government customers. The Company’s subscription contracts with enterprise customers generally have annual or multi-year contractual terms and consist of a fixed quantity of seat licenses, which allows each seat to access an unlimited number of course enrollments during the contract term. Enterprise license subscriptions include Team Plan, Enterprise Plan, Udemy Business Pro, and Leadership Academy. Subscribers retain access to the courses in which they enroll for the duration of their subscriptions (including any renewal period), even if the instructor subsequently elects to remove the course from the Company’s subscription programs. Enterprise contracts are typically evidenced by a fully executed Master Services Agreement with an accompanying executed Order Form specifying the contractual subscription term and pricing. Revenue is recognized ratably over the respective contractual subscription term beginning on the date that the platform is made available to the customer. Enterprise revenue recognized from professional services was immaterial for the periods presented. Standard subscription agreements have auto-renewal clauses, which allow the agreement to continue after the expiration of the initial term. The Company’s standard billing terms are to invoice upfront annually for contracts with terms of one year or longer. For contracts that are less than one year, the Company generally bills in advance on a quarterly or semi-annual basis. The Company recognizes unbilled receivables that relate to consideration for services completed but not billed as of period end. Unbilled receivables are recorded in accounts receivable, net, and were not material for any period presented. Consumer revenue— The Company generates revenue by selling access to course content on the Udemy platform directly to individual learners. Consumer revenues consist of (i) single course purchases and (ii) consumer subscriptions. All contracts with consumer customers are billed in advance and require payment via credit card by the customer prior to accessing any course content, or in the case for new consumer subscription customers, upon expiration of a 7-day free trial available to new customers in certain jurisdictions. After checkout, consumer customers purchasing a single course receive a lifetime access license to the digital course content in addition to stand-ready access to the Udemy platform online services needed to access the content. Consumer subscription plans offer on-demand access to a library of courses over a subscription term, as well as additional features and functionalities. Consumer revenue transactions are governed by Udemy’s standard terms of use. The time between a customer’s payment and the receipt of funds is not significant. Payment terms are generally fixed and do not include variable consideration. Consumer revenues are recorded net of actual and estimated refunds and exclude any taxes that are collected from learners and remitted to governmental authorities. Consumer revenue arrangements do not include significant obligations associated with warranties. Consumer subscriptions are either one-month or one-year in duration and paid in advance, with new customers in certain jurisdictions able to sign up for a 7-day free trial period. Once the free trial period lapses and advance payment is made, there is no right to a refund (unless otherwise required by applicable law). Subscribers have continuous access to enroll in and consume an unlimited number of curated courses included in the subscription catalog on the platform during the subscription term. Subscribers retain access to the courses in which they enroll for the duration of their subscriptions (including any renewal period), even if the instructor subsequently elects to remove the course from the Company’s subscription programs. The continual access to the platform represents a series of distinct services, as the Company continually provides access to, and fulfills its obligation to, the customer over the contract term. Consumer subscriptions automatically renew at the end of the subscription term. Customers may cancel renewal of their subscription at any point but will retain their access to the platform until the end of the current subscription term. Revenue from contracts with customers is recognized when control of promised services is transferred. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these services. The Company accounts for revenue contracts with customers using the five-step model under ASC Topic 606: 1) Identify the contract with a customer Udemy determines a contract with a customer to exist when the contract is approved, each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, the customer has the ability and intent to pay, and the contract has commercial substance. At contract inception, the Company evaluates whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience if available. 2) Identify the performance obligations in the contract Performance obligations committed in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from Udemy, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract. Customers do not have the ability to take possession of the software supporting the platform and, as a result, contracts are accounted for as service arrangements. The non-exclusive lifetime access license associated with single course purchases and the licensed content associated with subscriptions are not considered distinct from the Udemy platform, because the course content is significantly integrated, and highly interdependent with the platform. Specifically, the learner does not obtain control of the course content’s intellectual property and functionality without the Udemy platform. Accordingly, management concluded there is a single, combined performance obligation, which is customer’s access to the online content on the Udemy platform, representing a series of distinct services as the Company continually provides access to and fulfills its obligation to allow access to licensed content and platform functionality to the learner. 3) Determine the transaction price The transaction price is determined based on the consideration to which Udemy expects to be entitled in exchange for transferring services to the customer. The prices for Consumer and Enterprise, or Udemy Business (“UB”), contracts are fixed at contract inception and do not contain significant estimates related to variable consideration. With respect to single course purchases, consumers may request a full refund within 30 days after the initial purchase transaction. The Company estimates and establishes a refund reserve based on historical refund rates, which has historically been immaterial. None of the Company’s contracts contain a significant financing component. Revenue excludes taxes collected from customers, which are subsequently remitted to governmental entities (e.g., sales and other indirect taxes). 4) Allocate the transaction price to performance obligations in the contract Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on each performance obligation’s relative standalone selling price. As access to content is not considered distinct from the Udemy platform hosting services, the transaction price is allocated to a single performance obligation. 5) Recognize revenue when or as performance obligations are satisfied Revenue is recognized at the time the related performance obligation is satisfied by transferring the control of the promised service to a customer. Revenue is recognized in an amount that reflects the consideration that Udemy expects to receive in exchange for those services. Udemy has a stand ready obligation to deliver its services continually throughout the requisite contract period, which is either lifetime access for consumer single course purchases or the contractual subscription term for UB and consumer subscription customers. As such, the Company recognizes revenue on a straight-line basis as it satisfies the performance obligation, using an estimated service period for consumer single course purchases and the contractual subscription term for UB and consumer subscription customers. The Company records contract liabilities to deferred revenue for amounts billed to customers in advance of the performance obligations being satisfied, and primarily consists of the unearned portion of enterprise and consumer services. The amount of revenue recognized in the periods presented from performance obligations satisfied (or partially satisfied) in prior periods was not material. Other than the circumstances noted below, no significant judgment has historically been required in determining the amount and timing of revenue from the Company’s contracts with customers. Principal vs. agent—In order to determine if revenue should be reported gross or net of either payments to third-party instructors or amounts retained by reseller partners who sell access to Enterprise subscription offerings, the Company evaluated whether Udemy acts as the principal in sales of its online course offerings. An entity is the principal if it controls a good or service before it is transferred to the end customer. Key indicators that management evaluated in determining gross versus net treatment included but are not limited to: •the nature of the Company’s promise to the customer, as well as the distinct performance obligation identified; •the underlying contract terms and conditions between the parties to the transaction; •which party is primarily responsible for fulfilling the promise to provide the specified good or service to the end customer; •which party has inventory risk before the specified good or service has been transferred to the end customer; and •which party has discretion in establishing the price for the specified good or service. Based on an evaluation of the above indicators, management determined that the Company is the principal to learners who purchase access to online course content via direct or reseller sales of its enterprise and consumer offerings. The Company controls the promised goods or services (i.e., access to course content via the Udemy platform) before it is transferred to the customer and is primarily responsible for fulfillment with respect to delivering access to course content. The Company is the entity which licenses content to learners as the agreements with instructors grant the Company the right to sub-license content to its learners at its discretion. The Company also has substantial discretion to determine the pricing of its offerings. Therefore, the Company reports the gross purchase price paid by the customer related to these arrangements in the revenue caption of the consolidated statements of operations. The Company records payments to instructors as content costs within cost of revenues, while amounts retained by reseller partners for Enterprise sales are recognized as customer support costs within cost of revenues and deferred sales commissions within sales and marketing, based on the nature of the partnership transaction. Estimated service period for consumer single course purchases—The Company considers a variety of data points when determining the estimated service period for a consumer single course purchase over which revenue is recognized. Quantitative data points considered include, but are not limited to, the average time period between a learner’s purchase date and the last date the learner accesses the purchased content, the average total hours consumed for a given purchase, and the time period over which learner activity stabilizes. Management also considers certain qualitative factors such as the nature of the Company’s consumer offerings, known online trends, and, to the extent publicly available, service periods of competitors’ online content that is similar in nature to those offered by the Company. The Company believes consideration of all of these factors enables the Company to determine the best representation of the time period during which consumer learners access the online course content on the Company’s platform and therefore the service period over which the Company provides services to learners. Determining the estimated service period is subjective and requires management’s judgment. Future usage patterns may differ from historical usage patterns, and the estimated service period may change in the future. The estimated service period for consumer single course purchase transactions is four months from the date of enrollment. Cost of revenues— Costs of revenues are related to content costs (which are payments to instructors), payment and mobile processing fees, costs associated with the hosting of digital content, employee-related expenses for the customer support organization, including salaries, benefits, stock-based compensation, facilities and other expenses, depreciation of network equipment, and amortization of capitalized software.
Advertising and sponsorship costs	Advertising and sponsorship costs— Advertising costs are expensed as incurred. In general, sponsorship costs are expensed on a straight-line basis over the contractual sponsorship term. Prepayments made under sponsorship contracts are included in the prepaid expenses and other current assets caption of the consolidated balance sheets.
Research and development	Research and development— Research and development costs are expensed as incurred. Research and development expenses include salaries, benefits, stock-based compensation, costs related to the ongoing management, maintenance, and expansion of features and services offered on the Company’s platform. Research and development costs also include contracted services, supplies, and other miscellaneous expenses.
Stock-based compensation	Stock-based compensation— The Company accounts for its stock-based compensation pursuant to ASC Topic 718, Compensation-Stock Compensation, which requires the measurement and recognition of stock-based awards using the estimated fair value of the awards on the date of grant. Stock-based awards include stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock appreciation rights (“SARs”), and restricted stock granted to employees, directors, and non-employees, and stock purchase rights granted to employees under the Employee Stock Purchase Plan (“ESPP Rights”). No stock options or SARs have been granted since the Company’s initial public offering (“IPO”) in 2021. The Company estimates the fair value of RSUs, PSUs, and restricted stock based on the fair value of the Company’s common stock on the date of grant. The Company estimates the fair value of stock options, SARs, and ESPP Rights using the Black-Scholes option-pricing model, which requires the use of the following subjective and complex assumptions: Expected term— For stock options and SARs, the Company has elected to use the midpoint of the vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. For ESPP Rights, the expected term is equal to the purchase periods in a given offering period. Risk-free interest rate— The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the award’s expected term. Expected volatility— The Company estimates future expected volatility by considering both the average volatility of a peer group of representative public companies with sufficient trading history and, to the extent available, its historical volatility over the expected term. Dividend yield— The expected dividend was assumed to be zero as the Company has never paid dividends and has no current plans to do so. Stock appreciation rights granted to employees are settled in cash upon exercise. The Company accounts for SARs in the other liabilities, non-current caption in the accompanying consolidated balance sheets. Vested and outstanding SARs are subject to remeasurement at each balance sheet date using the Black-Scholes option-pricing model and the assumptions described above, and any change in fair value is recognized as a component of expense. The Company adjusts the fair value of the liability for vested and outstanding SARs until the earlier of the exercise or expiration of the SARs. For awards with only service-based vesting conditions, the Company recognizes the resulting stock-based compensation on a straight-line basis over the requisite service period of the awards. For awards that are subject to both performance and service-based vesting conditions, the Company separately attributes stock-based compensation expense for each vesting tranche of the award over their requisite service periods. The Company accounts for forfeitures in the period they occur. Management estimates the number of PSUs that are expected to vest based on the anticipated achievement of the specified performance metrics. If the performance-based vesting condition is considered probable of being achieved, the Company recognizes expense over the requisite service period based on the probable outcome of achievement. If the performance goals are not met, or are considered improbable, no compensation cost is recognized, and any previously recognized compensation cost is reversed. During the fourth quarter of 2023, the Company's began funding withholding taxes due upon the vesting of employee RSUs and the exercise of stock options in certain jurisdictions by net share settlement, rather than its previous approach of selling shares of the Company’s common stock. The amount of withholding taxes related to net share settlement is reflected as (i) a reduction to additional paid-in-capital and (ii) cash outflows for financing activities when the payments are made. The shares withheld by the Company as a result of net share settlement are returned to the pool of shares available for future issuance. Therefore, they are not considered issued and outstanding and do not impact the calculation of net loss per share, basic and diluted, attributable to common stockholders.
Income taxes	Income taxes— The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires an asset and liability approach in accounting for income taxes. Under this method, the tax provision includes taxes currently due plus the net change in deferred tax assets and liabilities. Deferred tax assets and liabilities arise from the temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements, as well as from net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the tax rates expected to be in effect when the taxes will actually be paid or refund received, as provided for under currently enacted tax law. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, is not expected to be realized. ASC 740 prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under this guidance, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company recognizes interest accrued related to uncertain tax positions as a component of the provision for income taxes. There was no accrued interest or penalties associated with any uncertain tax positions, nor was any interest expense recognized during the fiscal years ended December 31, 2023, 2022, or 2021. The Company does not currently anticipate that any significant increase or decrease to uncertain tax positions will be recorded during the next twelve months.
Translation of foreign currency	Translation of foreign currency— The Company’s reporting currency is the U.S. dollar. The Company determines the functional currency for each of its foreign subsidiaries by reviewing their operations and currencies used in their primary economic environments. Assets and liabilities for foreign subsidiaries with functional currency other than U.S. dollar are translated into U.S. dollars at the rate of exchange existing at the balance sheet date. Statements of operations amounts are translated at average exchange rates for the period. Translation gains and losses are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity (deficit). Remeasurement gains and losses are included in other income (expense), net in the consolidated statements of operations. Monetary assets and liabilities are remeasured at the exchange rate on the balance sheet date and nonmonetary assets and liabilities are measured at historical exchange rates.
Net loss per share attributable to common stockholders	Net loss per share attributable to common stockholders— Prior to the completion of the Company’s IPO and the conversion of all outstanding preferred shares into common stock, basic and diluted net loss per share attributable to common stockholders was computed in conformity with the two-class method required for participating securities. The Company considered all series of its redeemable convertible preferred stock to be participating securities as the holders of such stock had the right to receive nonforfeitable dividends on a pari passu basis in the event that a dividend was paid on common stock. Under the two-class method, the net loss attributable to common stockholders was not allocated to the redeemable convertible preferred stock as the preferred stockholders did not have a contractual obligation to share in the Company’s losses. Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents to the extent they are dilutive. For purposes of this calculation, common stock options, RSUs, PSUs, restricted stock, and contingently issuable shares under the Company’s ESPP plan are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for the periods presented. For the fiscal year ended December 31, 2021, outstanding redeemable convertible preferred stock and redeemable convertible preferred stock warrants were also considered to be common stock equivalents, but were excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect was anti-dilutive.
Comprehensive loss	Comprehensive loss— Comprehensive loss consists of two components, net loss attributable to common stockholders and other comprehensive income (loss), net of tax. Other comprehensive income (loss), net of tax, refers to revenue, expenses, gains, and losses that under GAAP are recorded as an element of stockholders’ equity (deficit) but are excluded from net loss attributable to common stockholders.
Fair value of financial instruments	Fair value of financial instruments— The Company considers fair value as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value are either observable or unobservable. Observable inputs reflect assumptions that market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based on their own market assumptions. The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value: Level 1— Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2— Inputs are observable, unadjusted quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data; and Level 3— Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The carrying amounts of cash, cash equivalents, restricted cash, accounts receivable, and accounts payable approximate fair value due to the relatively short-term maturities and are classified as current assets and liabilities, as appropriate, in the accompanying consolidated balance sheets. The Company’s money market funds and sweep account are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets. The Company’s investments in U.S. government securities are classified within Level 2 of the fair value hierarchy because they have been valued using inputs other than quoted prices in active markets that are directly or indirectly observable. The Company’s strategic investment is classified within Level 3 of the fair value hierarchy because it has been valued using significant unobservable inputs for which the Company has been required to develop its own assumptions.
Cash and cash equivalents	Cash and cash equivalents— Cash and cash equivalents include on demand deposits, money market funds, and other highly liquid investments with original or remaining maturities of less than 90 days when purchased. Cash equivalents also include amounts in transit from certain payment processors for credit and debit card transactions, which typically settle within five business days.
Restricted cash	Restricted cash— Restricted cash primarily consists of cash restricted in connection with lease agreements for the Company’s facilities. Restricted cash is included in current assets for leases that expire within one year from the balance sheet date and in non-current assets for leases that expire in more than one year from the balance sheet date.
Marketable securities	Marketable securities— Marketable securities consist of obligations issued by the U.S. Treasury and other U.S. federal agencies, corporate debt, and commercial paper securities, with an original maturity greater than 90 days at the date of purchase and are classified as available-for-sale securities. As the Company views these securities as available to support current operations, it has classified all available-for-sale securities as current assets. Available-for-sale securities are initially recorded at cost and periodically adjusted to fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit), while realized gains and losses are reported within other income (expense), net as a component of net loss attributable to common stockholders.
Accounts receivable, net	Accounts receivable, net— Accounts receivable primarily represent amounts owed to the Company for Enterprise subscriptions. Also included in accounts receivable are amounts due from payment processors or mobile application store partners that settle over a period longer than five business days. Accounts receivable balances are recorded at the invoiced amount and are non-interest-bearing. Accounts receivable is presented net of allowance for credit losses in the accompanying consolidated balance sheets. The Company maintains an allowance based upon expected credit losses of outstanding receivables. Management derives its estimate using a variety of factors, including historical collection and loss patterns; the current aging of receivables; geographic and other customer-specific credit risk factors; and reasonable and supportable forecasts of future economic conditions which inform adjustments to historical loss patterns. The provision for expected credit losses is recorded in general and administrative expenses in the accompanying consolidated statements of operations. Accounts receivable deemed to be uncollectible are written off, net of expected or actual recoveries.
Deferred contract costs	Deferred contract costs— Sales commissions earned by the Company’s sales force on both new and renewal business are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized on a straight-line basis over an estimated period of benefit of four years, as commissions paid for initial and renewal contracts are generally not considered commensurate. The Company determined the period of benefit by taking into consideration the length of terms in its Enterprise customer contracts, changes and enhancements in course offerings, and other factors. In addition, a portion of the revenue share retained by enterprise reseller partners from sales to UB customers is considered an incremental and recoverable cost of obtaining a contract with a customer. This cost is deferred and amortized on a straight-line basis over the service term of the corresponding contractual subscription term, as commissions paid to resellers on initial and renewal contracts are generally commensurate. Amounts expected to be recognized within one year of the consolidated balance sheet dates are recorded as deferred contract costs, current, while the remaining portion is recorded as deferred contract costs, non-current in the consolidated balance sheets. Deferred contract costs are periodically analyzed for impairment. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of operations.
Property and equipment, net	Property and equipment, net— Property, equipment, and purchased software are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, which are generally three years for computers, purchased software, and equipment, and five years for furniture and fixtures. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives of the assets or the term of the related lease. Expenditures for repairs and maintenance are charged to expense as incurred. Upon disposition or retirement, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is reflected as operating expenses in the consolidated statements of operations.
Capitalized software, net	Capitalized software, net— The Company capitalizes costs to develop software for internal use incurred during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Once an application has reached the development stage, qualifying internal and external costs are capitalized until the software feature is substantially complete and ready for its intended use. Capitalized qualifying costs are amortized on a straight-line basis when the software is ready for its intended use over an estimated useful life, which is generally three years. The Company evaluates the useful lives of these assets and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
Operating leases	Operating leases— The Company leases real estate facilities under non-cancelable operating leases. The Company determines if an arrangement contains a lease at inception based on whether there is an identified tangible asset and whether the Company controls the use of the identified asset throughout the period of use. The Company adopted Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842) on January 1, 2022. Operating leases are included in operating lease ROU assets and in operating lease liabilities in the accompanying consolidated balance sheet. Operating lease ROU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company measures its operating lease liabilities at lease commencement date based on the present value of total lease payments over the lease term. Total lease payments are discounted to present value using the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company’s operating leases generally do not provide an implicit rate, the Company estimates its incremental borrowing rate using information available at the lease commencement date, including but not limited to credit rating, lease term, and the currency in which the arrangement is denominated. The Company’s operating lease ROU assets are equal to the corresponding operating lease liability, adjusted for payments made to the lessor at or before the commencement date, initial direct costs incurred, and tenant incentives under the lease. The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement. The Company does not allocate consideration between lease and non-lease components. Variable lease payments, such as those for common area maintenance or property taxes, are not included in the measurement of operating lease liabilities and are expensed as incurred. In addition, the Company does not recognize operating ROU assets or operating lease liabilities for leases with a term of 12 months or less for all asset classes. Operating lease expense is recognized on a straight-line basis over the lease term. Lease accounting prior to the adoption of Topic 842 The Company recorded total rent expense on a straight-line basis over the lease term consistent with Topic 840, Leases.
Strategic investments	Strategic investments— The Company holds an investment in equity securities of a privately held company without a readily determinable fair value and in which the Company does not have a controlling interest. Investments in equity securities without readily determinable fair values are initially recorded at cost and are subsequently adjusted to fair value only in the event of either price changes from observable transactions in the same or a similar security from the same issuer or impairment, as discussed below. This practice is referred to as the measurement alternative. Privately held equity securities are valued using significant unobservable inputs or data in inactive markets. This valuation requires judgment due to the absence of market prices and inherent lack of liquidity and are classified as Level 3 in the fair value hierarchy. In determining the estimated fair value of investments in privately held companies, the Company utilizes the most recent data available including observed transactions, such as equity financing transactions of the investees and sales of the existing shares of the investees’ securities. In addition, the determination of whether an observed transaction is similar to the equity securities held by the Company requires significant management judgment based on the rights and preferences of the securities. The Company evaluates its strategic investment for impairment at each reporting period. This evaluation consists of several potential qualitative and quantitative impairment indicators including, but not limited to, the investee's financial metrics, whether there were any significant adverse changes in the economic environment or general market conditions of the geographies and industries in which the investee operates, and any other publicly available information that may affect the value of the investment. Based on assessments performed during the fiscal years ended December 31, 2023 and 2022, the Company recognized impairment losses of $1.8 million and $2.9 million, respectively, which are recorded in other income (expense), net in the accompanying consolidated statements of operations. No impairment losses were recorded in the fiscal year ended December 31, 2021.
Goodwill and intangible assets	Goodwill and intangible assets— Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. No such triggering events were noted for the fiscal years ended December 31, 2023, 2022, or 2021. Goodwill represents the excess purchase price over net assets acquired in the Company’s business combinations. The Company evaluates and tests the recoverability of its goodwill for impairment at least annually, during the fourth quarter of each fiscal year, or more often if and when circumstances indicate that goodwill may not be recoverable. No impairments were recorded during the fiscal years ended December 31, 2023, 2022, or 2021 as the result of these assessments.
Impairment of long-lived assets	Impairment of long-lived assets— The Company evaluates the carrying value of long-lived assets, such as property and equipment, whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset, including disposition, are less than the carrying value of the asset. The impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. The Company did not identify any impairment losses on long-lived assets for the fiscal years ended December 31, 2023, 2022, or 2021.
Self-insurance	Self-insurance— The Company is self-insured for medical benefits offered to certain employees, up to certain stop-loss limits. Such costs are accrued based on known claims and estimates of incurred but not reported (“IBNR”) claims. IBNR claims are estimated using historical claim information and actuarial estimates. As of December 31, 2023, the accrued liability for self-insurance totaled $1.3 million and is included in accrued compensation and benefits on the consolidated balance sheets. The Company was not self-insured as of or prior to December 31, 2022.
Business combinations	Business combinations— In accordance with applicable accounting standards, the Company estimates the fair value of acquired assets and assumed liabilities as of the acquisition date of business combinations. The purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The purchase price is determined based on the fair value of the assets transferred, liabilities assumed, and equity interests issued, after considering any transactions that are separate from the business combination. The excess of fair value of purchase consideration over the fair values of the identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer relationships and developed technology, costs to recreate acquired vendor relationships, royalty rates, and discount rates. The estimates are inherently uncertain and subject to revision as additional information is obtained during the measurement period for an acquisition, which may last up to one year from the acquisition date. During the measurement period, management may record adjustments to the fair value of tangible and intangible assets acquired and liabilities assumed, with a corresponding offset to goodwill. After the conclusion of the measurement period or the final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to earnings.
Recently Adopted and Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements Adopted in 2023 There are no recently issued accounting pronouncements that were adopted by the Company during the fiscal year ended December 31, 2023. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which aims to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses and the chief operating decision maker. The standard will become effective for the Company’s fiscal year ended December 31, 2024, and interim periods during the fiscal year ended December 31, 2025, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the potential impact of the new standard on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. The standard will become effective for the Company’s fiscal year ended December 31, 2025, with early adoption permitted. The Company is currently assessing the potential impact of the new standard on the Company’s consolidated financial statements.

Subsequent events (Details) $ in Millions	Feb. 14, 2024 USD ($)
Subsequent Event
Subsequent Event [Line Items]
Share repurchase program shares authorized	$ 100

Income taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Gross unrecognized tax benefits at the beginning of the year	$ 5,310	$ 3,608	$ 10,580
Increases related to prior year tax positions	58	224
Decreases related to prior year tax positions			(7,892)
Increases related to current year tax positions	1,864	1,478	920
Statues of limitations expirations	0	0	0
Gross unrecognized tax benefits at the end of the year	$ 7,232	$ 5,310	$ 3,608

Restructuring charges

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

Restructuring charges

15. Restructuring charges

On February 13, 2023, the Company communicated to its employees that in response to current macroeconomic conditions and to further streamline its operations and cost structure, it would reduce its global workforce by approximately 10%. As a result, the Company recognized restructuring charges of $10.1 million in the first quarter of 2023, primarily consisting of $8.9 million of personnel expenses such as salaries and wages, one-time severance payments, and other benefits. The Company also recognized $1.2 million of stock-based compensation expense on the communication date, resulting from impacted employees having no future substantive service requirement but continuing to vest into their equity awards during legally required retention periods as well as certain modifications to enable additional vesting after impacted employees’ termination dates. The restructuring plan was completed in the third quarter of 2023.

Restructuring charges are presented as separate operating expenses within the Company’s consolidated statements of operations. The following table summarizes the activity related to the restructuring liability recorded in accrued compensation and benefits in the accompanying consolidated balance sheets (in thousands):


Beginning balance— January 1, 2023	$	—
Restructuring charges	9,055
Settlements	(9,055)
Ending balance— December 31, 2023	$	—

Stockholders' equity - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
2021 Stock incentive Plan
Options Outstanding
Outstanding, beginning balance (in shares)	10,283,771
Granted (in shares)	0	0
Exercised (in shares)	(5,477,153)
Canceled (in shares)	(235,597)
Outstanding, ending balance (in shares)	4,571,021	10,283,771
Vested & expected to vest, awards outstanding (in shares)	4,571,021
Exercisable, awards outstanding (in shares)	4,405,278
Weighted Average Exercise Price
Outstanding, beginning balance (in USD per share)	$ 4.18
Granted (in USD per share)	0
Exercised (in USD per share)	3.29
Canceled (in USD per share)	7.58
Outstanding, ending balance (in USD per share)	5.08	$ 4.18
Vested & expected to vest, weighted average exercise price (in USD per shares)	5.08
Exercisable, weighted average exercise price (in USD per share)	$ 4.96
Outstanding, weighted average remaining contractual term	3 years 2 months 23 days	6 years 4 months 17 days
Outstanding, aggregate intrinsic value	$ 44,309	$ 66,234
Vested & expected to vest, weighted average remaining contractual term	3 years 2 months 23 days
Vested & expected to vest, aggregate intrinsic value	$ 44,309
Exercisable, weighted average remaining contractual term	3 years 2 months 23 days
Exercisable, aggregate intrinsic value	$ 43,157
Amended and Restated 2010 Equity Incentive Plan \| Performance-Based Awards
Options Outstanding
Outstanding, beginning balance (in shares)	50,000
Granted (in shares)	0
Exercised (in shares)	0
Canceled (in shares)	0
Outstanding, ending balance (in shares)	50,000	50,000
Vested & expected to vest, awards outstanding (in shares)	50,000
Exercisable, awards outstanding (in shares)	26,041
Weighted Average Exercise Price
Outstanding, beginning balance (in USD per share)	$ 3.06
Granted (in USD per share)	0
Exercised (in USD per share)	0
Canceled (in USD per share)	0
Outstanding, ending balance (in USD per share)	3.06	$ 3.06
Vested & expected to vest, weighted average exercise price (in USD per shares)	3.06
Exercisable, weighted average exercise price (in USD per share)	$ 3.06
Outstanding, weighted average remaining contractual term	4 years 6 months 29 days	5 years 6 months 29 days
Outstanding, aggregate intrinsic value	$ 584	$ 375
Vested & expected to vest, weighted average remaining contractual term	4 years 6 months 29 days
Vested & expected to vest, aggregate intrinsic value	$ 584
Exercisable, weighted average remaining contractual term	4 years 6 months 29 days
Exercisable, aggregate intrinsic value	$ 304

Commitments and contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

8. Commitments and contingencies

Noncancellable purchase commitments— The Company has contractual commitments with its cloud infrastructure provider, network service providers and paid advertising and sponsorship vendors that are noncancellable. As of December 31, 2023, future noncancellable commitments under these arrangements were as follows:


2024	$	34,312
2025	25,572
2026	3,132
Total purchase commitments (1)	$	63,016
(1) Includes $28.7 million of non-cancelable contractual commitments as of December 31, 2023 related to the Company's third-party cloud infrastructure agreement, under which the Company committed to spend an aggregate of at least $45.0 million between January 2023 and December 2025, with a $12.0 million minimum purchase commitment each year. The Company is required to pay the residual difference if it fails to meet the aggregate minimum purchase commitment by December 2025.

Indemnification— The Company enters into indemnification provisions under agreements with other parties in the ordinary course of business, including certain business partners, investors, contractors, and the Company’s officers, directors, and certain employees. The Company has agreed to indemnify and defend the indemnified party’s claims and related losses suffered or incurred by the indemnified party resulting from actual or threatened third-party claims because of the Company’s activities or, in some cases, non-compliance with certain representations and warranties made by the Company. In general, the Company does not record any liability for these indemnities in the accompanying consolidated balance sheets as the amounts cannot be reasonably estimated and are not considered probable. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. To date, losses recorded in the Company’s consolidated statements of operations in connection with the indemnification provisions have not been material.

Litigation— From time to time, in the ordinary course of business, the Company is subject to legal proceedings, claims, investigations, and other proceedings, including claims of alleged infringement of third-party patents and other intellectual property rights, and commercial, employment, and other matters. In accordance with generally accepted accounting principles, the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least annually and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. The outcome of such litigation is not expected to have a material effect on the financial position, results of operation and cash flows of the Company. The Company has recorded an immaterial amount related to all outstanding litigation matters in the accrued expenses and other current liabilities caption of the accompanying consolidated balance sheets as of December 31, 2023, and December 31, 2022.

Summary of significant accounting policies - Summary of Allowance for Credit Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	$ 1,528	$ 678	$ 643
Charged to Expenses	1,662	960	326
Charges Utilized/Written-off, Net of Recoveries	(1,920)	(110)	(291)
Balance at End of Period	$ 1,270	$ 1,528	$ 678

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Statement of Comprehensive Income [Abstract]
Net loss attributable to common stockholders	$ (107,294)	$ (153,875)	$ (80,026)
Net loss attributable to common stockholders	(107,294)	(153,875)	(80,026)
Other comprehensive income (loss):
Foreign currency translation gain (loss), net of tax	25	(20)	(1)
Change in unrealized gain (loss) on marketable securities, net of tax	288	(212)	0
Total other comprehensive income (loss)	313	(232)	(1)
Comprehensive loss attributable to common stockholders	$ (106,981)	$ (154,107)	$ (80,027)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.

+ References + Details

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Statement [Abstract]
Revenue	$ 728,937	$ 629,097	$ 515,657
Cost of revenue	309,598	275,320	236,024
Gross profit	419,339	353,777	279,633
Operating expenses
Sales and marketing	316,738	301,347	227,023
Research and development	120,335	104,556	66,107
General and administrative	93,898	99,064	64,410
Restructuring charges	10,263	0	0
Total operating expenses	541,234	504,967	357,540
Loss from operations	(121,895)	(151,190)	(77,907)
Other income (expense)
Interest income	20,670	5,548	204
Interest expense	(518)	(1,251)	(220)
Other expense, net	(1,898)	(4,696)	(920)
Total other income (expense), net	18,254	(399)	(936)
Net loss before taxes	(103,641)	(151,589)	(78,843)
Income tax provision	(3,653)	(2,286)	(1,183)
Net loss attributable to common stockholders	(107,294)	(153,875)	(80,026)
Net loss attributable to common stockholders	$ (107,294)	$ (153,875)	$ (80,026)
Net loss per share attributable to common stockholders
Basic (in dollars per share)	$ (0.71)	$ (1.09)	$ (1.46)
Diluted (in dollars per share)	$ (0.71)	$ (1.09)	$ (1.46)
Weighted-average shares used in computing net loss per share attributable to common stockholders
Basic (in shares)	150,098,776	140,873,504	54,972,827
Diluted (in shares)	150,098,776	140,873,504	54,972,827

Consolidated balance sheet components - Summary of Intangible Assets Acquired through Business Combination (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible Assets, Gross	$ 15,100	$ 15,100
Accumulated Amortization	(9,877)	(5,769)
Intangible Assets, Net	$ 5,223	$ 9,331
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives	6 years	6 years
Intangible Assets, Gross	$ 5,500	$ 5,500
Accumulated Amortization	(2,156)	(1,239)
Intangible Assets, Net	$ 3,344	$ 4,261
Vendor relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives	3 years	3 years
Intangible Assets, Gross	$ 4,500	$ 4,500
Accumulated Amortization	(3,528)	(2,028)
Intangible Assets, Net	$ 972	$ 2,472
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives	3 years	3 years
Intangible Assets, Gross	$ 4,200	$ 4,200
Accumulated Amortization	(3,293)	(1,893)
Intangible Assets, Net	$ 907	$ 2,307
Tradename
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives	2 years	2 years
Intangible Assets, Gross	$ 900	$ 900
Accumulated Amortization	(900)	(609)
Intangible Assets, Net	$ 0	$ 291

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 305,564	$ 313,685
Restricted cash, current	3,329	0
Marketable securities	171,372	151,687
Accounts receivable, net	92,555	104,530
Prepaid expenses and other current assets	20,924	14,878
Deferred contract costs, current	38,584	30,234
Total current assets	632,328	615,014
Property and equipment, net	4,439	7,012
Capitalized software, net	31,388	27,412
Operating lease right-of-use assets	5,691	11,377
Restricted cash, non-current	659	3,629
Deferred contract costs, non-current	35,790	35,411
Strategic investments	10,311	12,104
Intangible assets, net	5,223	9,331
Goodwill	12,646	12,646
Other assets	2,721	3,632
Total assets	741,196	737,568
Current liabilities:
Accounts payable	2,506	14,529
Accrued expenses and other current liabilities	27,778	31,247
Content costs payable	40,277	37,310
Accrued compensation and benefits	24,332	22,882
Operating lease liabilities, current	5,825	7,002
Deferred revenue, current	279,414	273,937
Total current liabilities	380,132	386,907
Operating lease liabilities, non-current	1,124	6,545
Deferred revenue, non-current	3,000	4,342
Other liabilities, non-current	48	464
Total liabilities	384,304	398,258
Note 8 – Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.00001 par value - 50,000,000 shares authorized; zero shares issued and outstanding as of December 31, 2023, and December 31, 2022.	0	0
Common stock, $0.00001 par value - 950,000,000 shares authorized; 157,166,360 and 145,013,786 shares issued and outstanding as of December 31, 2023, and December 31, 2022, respectively.	2	1
Additional paid-in capital	1,076,508	951,946
Accumulated other comprehensive income (loss)	80	(233)
Accumulated deficit	(719,698)	(612,404)
Total stockholders’ equity	356,892	339,310
Total liabilities and stockholders' equity	$ 741,196	$ 737,568

Consolidated balance sheet components

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidated balance sheet components

5. Consolidated balance sheet components

Cash, cash equivalents, and marketable securities— The amortized cost, unrealized gains and losses, and estimated fair value of cash, cash equivalents, and marketable securities consisted of the following (in thousands):


As of December 31, 2023	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Cash and cash equivalents:
Cash	$	38,872	$	—	$	—	$	38,872
Money market funds	266,692		—		—		266,692
Total cash and cash equivalents	305,564		—		—		305,564
Marketable securities:
U.S. government securities	171,296		76		—		171,372
Total cash, cash equivalents, and marketable securities	$	476,860	$	76	$	—	$	476,936


As of December 31, 2022	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Cash and cash equivalents:
Cash	$	134,408	$	—	$	—	$	134,408
Money market funds	130,377		—		—		130,377
U.S. government securities	48,899		4		(3)		48,900
Total cash and cash equivalents	313,684		4		(3)		313,685
Marketable securities:
U.S. government securities	151,900		30		(243)		151,687
Total cash, cash equivalents, and marketable securities	$	465,584	$	34	$	(246)	$	465,372

Cash equivalents and marketable securities in an unrealized loss position consisted of the following (in thousands):


	December 31, 2023				December 31, 2022
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Cash equivalents:
U.S. government securities	$	—	$	—	$	24,960	$	(3)

Marketable securities:
U.S. government securities	—		—		59,057		(243)
Total securities in an unrealized loss position	$	—	$	—	$	84,017	$	(246)

Realized gains and losses reclassified from accumulated other comprehensive loss to other income (expense), net were zero for the fiscal years ended December 31, 2023 and 2022. The Company did not hold any marketable securities during the fiscal year ended December 31, 2021.

No securities had been in a continuous unrealized loss position for twelve months or longer as of December 31, 2023 or December 31, 2022. The Company does not intend to sell available-for-sale marketable debt securities in unrealized loss positions, and it is more likely than not that the Company will hold these securities until maturity or recovery of the cost basis. As of December 31, 2023 and December 31, 2022, the Company did not have an allowance for credit losses related to its available-for-sale debt securities due to a zero loss expectation for the portfolio which consists solely of U.S. government securities.

As of December 31, 2023, the entirety of the Company’s marketable securities portfolio had remaining contractual maturities of one year or less.

Property and equipment, net— Property and equipment, net consisted of the following (in thousands):


	December 31,		December 31,
	2023		2022
Leasehold improvements	$	19,064	$	19,109
Computers and equipment	7,770		7,820
Furniture and fixtures	4,705		4,870
Purchased software	383		383
Total property and equipment	31,922		32,182
Less accumulated depreciation and amortization	(27,483)		(25,170)
Property and equipment, net	$	4,439	$	7,012

Depreciation expense was $3.0 million, $4.3 million, and $4.5 million for the fiscal years ended December 31, 2023, 2022, and 2021 respectively.

Capitalized software, net— Capitalized software, net consisted of the following (in thousands):


	December 31,		December 31,
	2023		2022
Capitalized software	$	85,160	$	63,748
Less accumulated amortization	(53,772)		(36,336)
Capitalized software, net	$	31,388	$	27,412

Amortization expense of capitalized software was $17.5 million, $12.6 million, and $9.3 million for the fiscal years ended December 31, 2023, 2022, and 2021 respectively.

As of December 31, 2023, expected amortization expense for capitalized software over the remaining asset lives was as follows (in thousands):


2024	$	16,637
2025	10,905
2026	3,846
Total expected amortization	$	31,388

Intangible assets, net and goodwill— As of December 31, 2023, intangible assets, net acquired as part of the CorpU business combination were as follows (in thousands):


	Estimated Useful Lives	Intangible Assets, Gross		Accumulated Amortization		Intangible Assets, Net
Customer relationships	6 years	$	5,500	$	(2,156)	$	3,344
Vendor relationships	3 years	4,500		(3,528)		972
Developed technology	3 years	4,200		(3,293)		907
Tradename	2 years	900		(900)		—
Total		$	15,100	$	(9,877)	$	5,223

As of December 31, 2022, intangible assets, net acquired as part of the CorpU business combination were as follows (in thousands):


	Estimated Useful Lives	Intangible Assets, Gross		Accumulated Amortization		Intangible Assets, Net
Customer relationships	6 years	$	5,500	$	(1,239)	$	4,261
Vendor relationships	3 years	4,500		(2,028)		2,472
Developed technology	3 years	4,200		(1,893)		2,307
Tradename	2 years	900		(609)		291
Total		$	15,100	$	(5,769)	$	9,331

Amortization expense of intangible assets was $4.1 million, $4.3 million, and $1.5 million the fiscal years ended December 31, 2023, 2022, and 2021 respectively.

The expected future amortization expense for intangible assets as of December 31, 2023 was as follows (in thousands):


2024	$	2,795
2025	917
2026	917
2027	594
Total expected amortization	$	5,223

Goodwill in the amount of $12.6 million was established as part of the CorpU acquisition on August 24, 2021, and allocated to the Enterprise segment. This amount represents the excess of the purchase price over the fair value of net assets acquired. There have been no adjustments to the carrying amount of goodwill as of December 31, 2023.

Net loss per share

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Net loss per share

13. Net loss per share

The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts):


	Fiscal Year Ended December 31,
	2023		2022		2021
Numerator:
Net loss attributable to common stockholders	$	(107,294)	$	(153,875)	$	(80,026)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders
Basic and diluted	150,098,776		140,873,504		54,972,827
Net loss per share attributable to common stockholders
Basic and diluted	$	(0.71)	$	(1.09)	$	(1.46)

The following potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders calculations, because the impact of including them would have been anti-dilutive:


	Fiscal Year Ended December 31,
	2023	2022	2021
RSUs, PSUs, and restricted stock	16,240,802	16,218,968	2,606,351
Stock options	4,621,021	10,333,771	20,342,259
Contingently issuable shares under ESPP	105,280	116,601	60,880
Total potentially dilutive securities	20,967,103	26,669,340	23,009,490

Income taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Accruals and reserves	$ 4,409	$ 5,107
Deferred revenue	62,000	61,285
Net operating loss	36,508	30,047
Research and development tax credits	28,645	20,412
Stock-based compensation expense	6,242	7,995
Indirect tax reserves	240	1,496
Property and equipment, net	2,000	2,031
Capitalized research and development costs	35,505	23,475
Operating lease liabilities	1,460	2,767
Other	564	491
Gross deferred tax assets	177,573	155,106
Valuation allowance	(150,915)	(129,453)
Total deferred tax assets	26,658	25,653
Deferred tax liabilities:
Deferred contract costs	(16,791)	(14,814)
Operating lease right-of-use-assets	(1,129)	(2,245)
Other deferred tax liabilities	(8,573)	(8,594)
Total deferred tax liabilities	(26,493)	(25,653)
Net deferred tax assets	$ 165	$ 0

Cover - USD ($) $ in Millions	12 Months Ended
Cover - USD ($) $ in Millions	Dec. 31, 2023	Feb. 20, 2024	Jun. 30, 2023
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-40956
Entity Registrant Name	Udemy, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-1779864
Entity Address, Address Line One	600 Harrison Street
Entity Address, Address Line Two	3rd Floor
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94107
City Area Code	415
Local Phone Number	813-1710
Title of 12(b) Security	Common Stock, $0.00001 par value
Trading Symbol	UDMY
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction	false
Entity Shell Company	false
Entity Public Float			$ 938.6
Entity Common Stock, Shares Outstanding		158,088,671
Documents Incorporated by Reference	Portions of the registrant’s Definitive Proxy Statement relating to the registrant’s 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2023.
Amendment Flag	false
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2023
Entity Central Index Key	0001607939

Income taxes - Domestic and Foreign Components of Income (Loss) before Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Domestic	$ (110,640)	$ (155,528)	$ (80,243)
Foreign	6,999	3,939	1,400
Net loss before taxes	$ (103,641)	$ (151,589)	$ (78,843)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 235
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479557/942-235-S99-1

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section 25
-Paragraph 1
-SubTopic 20
-Topic 940
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481913/940-20-25-1

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

Employee retirement plan (Details) - USD ($)	12 Months Ended
Employee retirement plan (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Defined Contribution Plan Disclosure [Line Items]
Employer matching contribution, percent of match	50.00%	25.00%
Employer matching contribution, percent of employees' gross pay	4.00%	6.00%
Maximum annual contributions per employee		$ 500
Defined contribution plan, vesting period		2 years
Contributions made	$ 3,000,000	$ 500,000	$ 400,000
After first year of employment
Defined Contribution Plan Disclosure [Line Items]
Annual vesting percentage		50.00%
Annual vesting percentage		50.00%
After two years of employment
Defined Contribution Plan Disclosure [Line Items]
Annual vesting percentage		50.00%
Annual vesting percentage		50.00%

Revenue recognition - Summary of Deferred Revenue Balances by Reportable Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Disaggregation of Revenue [Line Items]
Total deferred revenue	$ 282,414	$ 278,279	$ 210,554	$ 142,376
Enterprise
Disaggregation of Revenue [Line Items]
Total deferred revenue	220,127	219,030	148,966	84,241
Consumer
Disaggregation of Revenue [Line Items]
Total deferred revenue	$ 62,287	$ 59,249	$ 61,588	$ 58,135

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Net loss per share - Summary of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss per Share (Details) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities (in shares)	20,967,103	26,669,340	23,009,490
RSUs, PSUs, and restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities (in shares)	16,240,802	16,218,968	20,342,259
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities (in shares)	4,621,021	10,333,771	2,606,351
Contingently issuable shares under ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities (in shares)	105,280	116,601	60,880

Investments and fair value measurements (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Summary of Investments on Condensed Consolidated Balance Sheets

The Company’s assets and liabilities that are measured at fair value on a recurring or nonrecurring basis within the fair value hierarchy are as follows (in thousands):


As of December 31, 2023	Level 1		Level 2		Level 3
Current assets:
Cash equivalents:
Money market funds	$	266,692	$	—	$	—

Marketable securities:
U.S. government securities	$	—	$	171,372	$	—

Non-current assets:
Strategic investments	$	—	$	—	$	10,311

Non-current liabilities:
Cash settled stock appreciation rights	$	—	$	—	$	48


As of December 31, 2022	Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	130,377	$	—	$	—
U.S. government securities	—		48,900		—
Total cash equivalents	$	130,377	$	48,900	$	—

Marketable securities:
U.S. government securities	$	—	$	151,687	$	—

Non-current assets:
Strategic investments	$	—	$	—	$	12,104

Non-current liabilities:
Cash settled stock appreciation rights	$	—	$	—	$	462

Summary of Investments on Condensed Consolidated Balance Sheets

The Company’s assets and liabilities that are measured at fair value on a recurring or nonrecurring basis within the fair value hierarchy are as follows (in thousands):


As of December 31, 2023	Level 1		Level 2		Level 3
Current assets:
Cash equivalents:
Money market funds	$	266,692	$	—	$	—

Marketable securities:
U.S. government securities	$	—	$	171,372	$	—

Non-current assets:
Strategic investments	$	—	$	—	$	10,311

Non-current liabilities:
Cash settled stock appreciation rights	$	—	$	—	$	48


As of December 31, 2022	Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	130,377	$	—	$	—
U.S. government securities	—		48,900		—
Total cash equivalents	$	130,377	$	48,900	$	—

Marketable securities:
U.S. government securities	$	—	$	151,687	$	—

Non-current assets:
Strategic investments	$	—	$	—	$	12,104

Non-current liabilities:
Cash settled stock appreciation rights	$	—	$	—	$	462

Summary of the Changes in the Fair Value of Level 3 Financial Instruments

A summary of the changes in the fair value of Level 3 financial instruments, of which remeasurement of SARs and impairment of strategic investments are recognized in the consolidated statements of operations, is as follows (in thousands):


	Warrants		Stock Appreciation Rights		Strategic Investments
Balance— December 31, 2020	$	160	$	268	$	—
Exercise of redeemable convertible preferred stock warrants	(160)		—		—
Vesting and remeasurement of SARs, net of exercises	—		550		—
Purchases of strategic investments	—		—		10,000
Balance— December 31, 2021	—		818		10,000
Vesting and remeasurement of SARs, net of exercises	—		(294)		—
Purchases of strategic investments	—		—		5,000
Amount reclassified from liability to equity upon exchange	—		(62)		—
Unrealized loss on strategic investments	—		—		(2,896)
Balance— December 31, 2022	—		462		12,104
Vesting and remeasurement of SARs	—		(161)		—
Exercises of SARs	—		(253)		—
Unrealized loss on strategic investments	—		—		(1,793)
Balance— December 31, 2023	$	—	$	48	$	10,311

Summary of the Changes in the Fair Value of Level 3 Financial Instruments


	Warrants		Stock Appreciation Rights		Strategic Investments
Balance— December 31, 2020	$	160	$	268	$	—
Exercise of redeemable convertible preferred stock warrants	(160)		—		—
Vesting and remeasurement of SARs, net of exercises	—		550		—
Purchases of strategic investments	—		—		10,000
Balance— December 31, 2021	—		818		10,000
Vesting and remeasurement of SARs, net of exercises	—		(294)		—
Purchases of strategic investments	—		—		5,000
Amount reclassified from liability to equity upon exchange	—		(62)		—
Unrealized loss on strategic investments	—		—		(2,896)
Balance— December 31, 2022	—		462		12,104
Vesting and remeasurement of SARs	—		(161)		—
Exercises of SARs	—		(253)		—
Unrealized loss on strategic investments	—		—		(1,793)
Balance— December 31, 2023	$	—	$	48	$	10,311

Restructuring charges (Tables)

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

Summary of Restructuring Charges

The following table summarizes the activity related to the restructuring liability recorded in accrued compensation and benefits in the accompanying consolidated balance sheets (in thousands):


Beginning balance— January 1, 2023	$	—
Restructuring charges	9,055
Settlements	(9,055)
Ending balance— December 31, 2023	$	—

Investments and fair value measurements - Summary of Investments on Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Marketable securities:	$ 476,936		$ 465,372
Strategic investments	10,311	$ 10,300	12,104
Level 1
Current assets:
Cash equivalents:			130,377
Strategic investments	0		0
Non-current liabilities:
Cash settled stock appreciation rights	0		0
Level 1 \| U.S. government securities
Current assets:
Cash equivalents:			0
Marketable securities:	0		0
Level 1 \| Money market funds
Current assets:
Cash equivalents:	266,692		130,377
Level 2
Current assets:
Cash equivalents:			48,900
Strategic investments	0		0
Non-current liabilities:
Cash settled stock appreciation rights	0		0
Level 2 \| U.S. government securities
Current assets:
Cash equivalents:			48,900
Marketable securities:	171,372		151,687
Level 2 \| Money market funds
Current assets:
Cash equivalents:	0		0
Level 3
Current assets:
Cash equivalents:			0
Strategic investments	10,311		12,104
Non-current liabilities:
Cash settled stock appreciation rights	48		462
Level 3 \| U.S. government securities
Current assets:
Cash equivalents:			0
Marketable securities:	0		0
Level 3 \| Money market funds
Current assets:
Cash equivalents:	$ 0		$ 0

Commitment and contingencies (Tables)

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Noncancellable Commitments

As of December 31, 2023, future noncancellable commitments under these arrangements were as follows:


2024	$	34,312
2025	25,572
2026	3,132
Total purchase commitments (1)	$	63,016
(1) Includes $28.7 million of non-cancelable contractual commitments as of December 31, 2023 related to the Company's third-party cloud infrastructure agreement, under which the Company committed to spend an aggregate of at least $45.0 million between January 2023 and December 2025, with a $12.0 million minimum purchase commitment each year. The Company is required to pay the residual difference if it fails to meet the aggregate minimum purchase commitment by December 2025.

Investments and fair value measurements - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Jun. 30, 2023	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Exercise price of warrants (in USD per share)			$ 0.196
Fair value of warrants			$ 200
Strategic investment’s cost basis	$ 15,000
Strategic investments	10,300			$ 10,311	$ 12,104
Cumulative impairment charges	4,700
Impairment of strategic investment	$ 1,800	$ 2,900
Series A-1 Preferred Stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Issuance of convertible preferred stock, net of issuance costs (in shares)			12,595

Accrued expenses and other current liabilities - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued expenses	$ 13,773	$ 8,494
Indirect tax reserves	1,432	6,627
Indirect tax payables	8,758	9,137
Other current liabilities	3,815	6,989
Accrued expenses and other current liabilities	$ 27,778	$ 31,247

Income taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income taxes

9. Income taxes

The domestic and foreign components of income (loss) before provision for income taxes consisted of the following (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Domestic	$	(110,640)	$	(155,528)	$	(80,243)
Foreign	6,999		3,939		1,400
Total net loss before taxes	$	(103,641)	$	(151,589)	$	(78,843)

The provision for income taxes consisted of the following (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Current
Federal	$	—	$	—	$	—
State	324		45		183
Foreign	3,494		2,241		1,149
Total current income tax expense	3,818		2,286		1,332
Deferred:
Federal	—		—		—
State	—		—		—
Foreign	(165)		—		(149)
Total deferred income tax benefit	(165)		—		(149)
Total provision for income taxes	$	3,653	$	2,286	$	1,183

The Company had an effective tax rate of (3.52)%, (1.51)%, and (1.50)% for the fiscal years ended December 31, 2023, 2022, and 2021, respectively. The difference between the 21% statutory federal tax rate and the effective tax rate was primarily a result of increases in total valuation allowance and non-deductible compensation, which were partially offset by an increase in tax credit creation.

The reconciliation between the statutory federal income tax rate and the Company’s effective tax rate as a percentage of loss before income taxes is as follows:


	Fiscal Year Ended December 31,
	2023		2022		2021
Federal tax expense	21.00	%	21.00	%	21.00	%
State taxes, net of federal benefit	0.50	%	1.24	%	1.07	%
Foreign rate differential	(1.40)	%	(0.33)	%	(0.12)	%
Withholding taxes	(1.77)	%	(0.60)	%	(0.78)	%
Nondeductible compensation	(10.20)	%	(2.52)	%	(5.29)	%
Stock-based compensation	(1.84)	%	(3.18)	%	0.27	%
Change in valuation allowance	(18.33)	%	(21.41)	%	(34.54)	%
Research and development credits	7.94	%	4.69	%	16.87	%
Nontaxable dividends	1.31	%	—	%	—	%
Other	(0.73)	%	(0.40)	%	0.02	%
Effective tax rate	(3.52)	%	(1.51)	%	(1.50)	%

Significant components of the net deferred tax assets (liabilities) for the fiscal years ended December 31, 2023 and 2022, consisted of the following (in thousands):


	December 31,
	2023		2022
Deferred tax assets:
Accruals and reserves	$	4,409	$	5,107
Deferred revenue	62,000		61,285
Net operating loss	36,508		30,047
Research and development tax credits	28,645		20,412
Stock-based compensation expense	6,242		7,995
Indirect tax reserves	240		1,496
Property and equipment, net	2,000		2,031
Capitalized research and development costs	35,505		23,475
Operating lease liabilities	1,460		2,767
Other	564		491
Gross deferred tax assets	177,573		155,106
Valuation allowance	(150,915)		(129,453)
Total deferred tax assets	26,658		25,653
Deferred tax liabilities:
Deferred contract costs	(16,791)		(14,814)
Operating lease right-of-use-assets	(1,129)		(2,245)
Other deferred tax liabilities	(8,573)		(8,594)
Total deferred tax liabilities	(26,493)		(25,653)
Net deferred tax assets	$	165	$	—

A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax assets.

As of December 31, 2023 and December 31, 2022, the Company has established a valuation allowance of $150.9 million and $129.5 million, respectively, against its gross deferred tax assets due to the uncertainty surrounding the realization of such assets. The change in total valuation allowance from 2022 to 2023 was an increase of $21.5 million.

As of December 31, 2023, the Company had $160.6 million of federal net operating loss (“NOL”) carryforwards. $72.4 million of federal NOL carryforwards generated in taxable years beginning prior to January 1, 2018 begin expiring in 2036, if not utilized. $88.2 million of federal NOL carryforwards generated in taxable years beginning after December 31, 2017 have an indefinite carryforward period, but are subject to the 80% deduction limitation based upon pre-NOL deduction taxable income.

As of December 31, 2023, the Company had $41.4 million of state NOL carryforwards. The state NOL carryforwards begin expiring in 2030, if not utilized.

As of December 31, 2023 the Company had U.S. federal and state research and development tax credit carryforwards of $23.2 million and $15.3 million, respectively. The federal research and development tax credit carryforwards will expire in various amounts beginning in 2035 while the state research and development tax credit carryforwards can be carried forward indefinitely.

The United States enacted the Tax Cuts and Jobs Act in December 2017, which requires companies to capitalize all their research and development costs for U.S. tax purposes, including software development costs, incurred in tax years beginning after December 31, 2021. Beginning in 2022, the Company began capitalizing and amortizing research and development costs over a five-year period for domestic research and a fifteen-year period for international research rather than expensing these costs.

The utilization of the Company’s net operating losses may be subject to a limitation due to the “ownership change” provisions under Section 382 of the Internal Revenue Code and similar state and foreign provisions. Such limitation may result in the expiration of the net operating loss carryforwards generated before 2018 prior to their utilization. The Company has performed a Section 382 study through December 31, 2022 to determine any potential Section 382 limitations on the utilization of its net operating loss carryforwards and tax credit carryforwards and has determined that the Company experienced two ownership changes with the Company’s Series A and A-1 preferred stock offering in September 2011 and with the Company’s Series B preferred stock offering in November 2012. The Company has estimated that the gross U.S. federal NOL carryforwards from 2010 to 2012 that would be subject to limitation are approximately $3.4 million.

Uncertain tax positions— As of December 31, 2023 and 2022, the Company had gross unrecognized tax benefits of $7.2 million and $5.3 million, respectively, related to federal and state research and development tax credits. The Company has performed a R&D tax credit study and has reserved against a portion of its federal and state R&D tax credit carryforwards. The Company’s tax position of such credits is not more likely than not to be sustained upon examination. The Company has recorded an uncertain tax position related to the deferred tax asset recognized for these credits.

A reconciliation of the beginning and ending balance of unrecognized tax benefit is as follows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Gross unrecognized tax benefits at the beginning of the year	$	5,310	$	3,608	$	10,580
Increases (decreases) related to prior year tax positions	58		224		(7,892)
Increases related to current year tax positions	1,864		1,478		920
Statues of limitations expirations	—		—		—
Gross unrecognized tax benefits at the end of the year	$	7,232	$	5,310	$	3,608

The Company is currently unaware of uncertain tax positions that could result in significant additional payments, accruals, or other material deviations in the next 12 months. The Company currently does not record interest and penalties, if any, related to unrecognized tax benefits. None of the unrecognized tax benefits as of December 31, 2023, if recognized in a future period, would affect the Company’s effective tax rate.

The Company intends to indefinitely reinvest any future undistributed foreign earnings outside the United States and therefore such earnings will not be subject to U.S. federal or state, or foreign withholding tax. The Company has prepared an analysis of the repatriation of earnings outside of the U.S. and has determined that the potential tax in connection with such repatriation is approximately $0.5 million.

The Company files income tax returns in U.S. federal, and certain state and foreign jurisdictions with varying statutes of limitations. Due to NOL carryforwards and tax credit carryforwards, the statutes of limitations remain open for tax years from inception of the Company through the fiscal year ended December 31, 2023. There are currently no income tax audits underway by U.S. federal or state tax authorities.

In October 2023, one of the Company’s subsidiaries, Udemy India LLP, received a tax assessment from the India Income Tax Department. The assessment challenged the transfer pricing methodology used by Udemy India LLP for the fiscal year ended March 31, 2021. The Company believes the proposed adjustment is without merit and will vigorously defend its position; however, it could take a number of years to reach resolution of this matter.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Consolidated balance sheet components (Tables)

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Cash, Cash Equivalents, and Marketable Securities

The amortized cost, unrealized gains and losses, and estimated fair value of cash, cash equivalents, and marketable securities consisted of the following (in thousands):


As of December 31, 2023	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Cash and cash equivalents:
Cash	$	38,872	$	—	$	—	$	38,872
Money market funds	266,692		—		—		266,692
Total cash and cash equivalents	305,564		—		—		305,564
Marketable securities:
U.S. government securities	171,296		76		—		171,372
Total cash, cash equivalents, and marketable securities	$	476,860	$	76	$	—	$	476,936


As of December 31, 2022	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Cash and cash equivalents:
Cash	$	134,408	$	—	$	—	$	134,408
Money market funds	130,377		—		—		130,377
U.S. government securities	48,899		4		(3)		48,900
Total cash and cash equivalents	313,684		4		(3)		313,685
Marketable securities:
U.S. government securities	151,900		30		(243)		151,687
Total cash, cash equivalents, and marketable securities	$	465,584	$	34	$	(246)	$	465,372

Cash equivalents and marketable securities in an unrealized loss position consisted of the following (in thousands):


	December 31, 2023				December 31, 2022
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Cash equivalents:
U.S. government securities	$	—	$	—	$	24,960	$	(3)

Marketable securities:
U.S. government securities	—		—		59,057		(243)
Total securities in an unrealized loss position	$	—	$	—	$	84,017	$	(246)

Summary of Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	December 31,		December 31,
	2023		2022
Leasehold improvements	$	19,064	$	19,109
Computers and equipment	7,770		7,820
Furniture and fixtures	4,705		4,870
Purchased software	383		383
Total property and equipment	31,922		32,182
Less accumulated depreciation and amortization	(27,483)		(25,170)
Property and equipment, net	$	4,439	$	7,012

Summary of Capitalized Software, Net

Capitalized software, net consisted of the following (in thousands):


	December 31,		December 31,
	2023		2022
Capitalized software	$	85,160	$	63,748
Less accumulated amortization	(53,772)		(36,336)
Capitalized software, net	$	31,388	$	27,412

Summary of Expected Amortization Expense

As of December 31, 2023, expected amortization expense for capitalized software over the remaining asset lives was as follows (in thousands):


2024	$	16,637
2025	10,905
2026	3,846
Total expected amortization	$	31,388

The expected future amortization expense for intangible assets as of December 31, 2023 was as follows (in thousands):


2024	$	2,795
2025	917
2026	917
2027	594
Total expected amortization	$	5,223

Summary of Intangible Assets Acquired through Business Combination

Intangible assets, net and goodwill— As of December 31, 2023, intangible assets, net acquired as part of the CorpU business combination were as follows (in thousands):


	Estimated Useful Lives	Intangible Assets, Gross		Accumulated Amortization		Intangible Assets, Net
Customer relationships	6 years	$	5,500	$	(2,156)	$	3,344
Vendor relationships	3 years	4,500		(3,528)		972
Developed technology	3 years	4,200		(3,293)		907
Tradename	2 years	900		(900)		—
Total		$	15,100	$	(9,877)	$	5,223

As of December 31, 2022, intangible assets, net acquired as part of the CorpU business combination were as follows (in thousands):


	Estimated Useful Lives	Intangible Assets, Gross		Accumulated Amortization		Intangible Assets, Net
Customer relationships	6 years	$	5,500	$	(1,239)	$	4,261
Vendor relationships	3 years	4,500		(2,028)		2,472
Developed technology	3 years	4,200		(1,893)		2,307
Tradename	2 years	900		(609)		291
Total		$	15,100	$	(5,769)	$	9,331

Leases - Summary of Information Pertaining to Operating Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Operating lease costs	$ 6,335	$ 6,794
Variable lease costs	1,068	810
Cash paid for amounts included in the measurement of operating lease liabilities, net of lease incentives	7,303	6,740
Lease cost	0	0
Sublease income	$ 0	$ 0
Weighted average remaining term (years)	1 year 3 months 18 days	2 years
Weighted average discount rate	3.90%	3.80%

Segment and geographic information - Summary of Financial Information by Each Reportable Segment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Revenue	$ 728,937	$ 629,097	$ 515,657
Segment cost of revenue	309,598	275,320	236,024
Gross profit	419,339	353,777	279,633
Reconciliation of segment gross profit to gross profit
Amortization of capitalized software	17,500	12,600	9,300
Amortization of intangible assets	4,100	4,300	1,500
Depreciation	3,000	4,300	4,500
Stock-based compensation	96,046	81,293	34,680
Gross profit	419,339	353,777	279,633
Operating Segments
Segment Reporting Information [Line Items]
Revenue	728,937	629,097	515,657
Segment cost of revenue	281,752	253,831	223,326
Gross profit	447,185	375,266	292,331
Reconciliation of segment gross profit to gross profit
Gross profit	447,185	375,266	292,331
Segment Reconciling Items
Segment Reporting Information [Line Items]
Gross profit	27,846	21,489	12,698
Reconciliation of segment gross profit to gross profit
Amortization of capitalized software	17,497	12,586	9,293
Amortization of intangible assets	2,900	2,900	1,022
Depreciation	443	643	760
Stock-based compensation	7,006	5,360	1,623
Gross profit	27,846	21,489	12,698
Enterprise \| Operating Segments
Segment Reporting Information [Line Items]
Revenue	420,646	314,038	186,954
Segment cost of revenue	137,227	104,577	63,984
Gross profit	283,419	209,461	122,970
Reconciliation of segment gross profit to gross profit
Gross profit	283,419	209,461	122,970
Consumer \| Operating Segments
Segment Reporting Information [Line Items]
Revenue	308,291	315,059	328,703
Segment cost of revenue	144,525	149,254	159,342
Gross profit	163,766	165,805	169,361
Reconciliation of segment gross profit to gross profit
Gross profit	$ 163,766	$ 165,805	$ 169,361

Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

6. Leases

The Company applies the guidance under Topic 842 for leases of real estate facilities under non-cancelable operating leases with various expiration dates through fiscal year 2026. The Company recognized the following amounts related to its operating leases in its consolidated statements of operations and cash flows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022
Operating lease costs	$	6,335	$	6,794
Variable lease costs	$	1,068	$	810
Cash paid for amounts included in the measurement of operating lease liabilities, net of lease incentives	$	7,303	$	6,740

During the fiscal years ended December 31, 2023 and 2022, the Company recognized an immaterial amount for short term lease expense and no sublease income.


	December 31,
	2023		2022
Weighted average remaining term (years)	1.3		2.0
Weighted average discount rate	3.9	%	3.8	%

Future minimum lease payments under noncancellable operating leases with initial lease terms in excess of one year as of December 31, 2023, were as follows (in thousands):


2024	$	5,922
2025	809
2026	410
Gross lease payments	7,141
Less imputed interest	(192)
Present value of operating lease liabilities	$	6,949

Rent expense for operating leases under Topic 840 was $5.8 million for the fiscal year ended December 31, 2021.

Stockholders' equity - Summary of Weighted Average Assumptions, Options (Details)		12 Months Ended
	Aug. 06, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	3.00%			1.00%
Expected volatility	68.60%			60.50%
Expected life (in years)	4 years 10 months 24 days			6 years
Expected dividend yield	0.00%			0.00%
Stock Appreciation Rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate				1.50%
Expected volatility				60.90%
Expected life (in years)				6 years 2 months 12 days
Expected dividend yield				0.00%
Contingently issuable shares under ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate		4.60%	3.50%	0.30%
Expected volatility		68.60%	68.50%	61.20%
Expected life (in years)		1 year 7 months 6 days	1 year 2 months 12 days	1 year 2 months 12 days
Expected dividend yield		0.00%	0.00%	0.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(ii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
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+ Details

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Pay vs Performance Disclosure
Net Income (Loss)	$ (107,294)	$ (153,875)	$ (80,026)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Leases - Narrative (Details) $ in Millions	12 Months Ended
Leases - Narrative (Details) $ in Millions	Dec. 31, 2022 USD ($)
Leases [Abstract]
Operating lease, rent expense	$ 5.8

Net loss per share (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Summary of Net Earnings (Loss) per Share

The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts):


	Fiscal Year Ended December 31,
	2023		2022		2021
Numerator:
Net loss attributable to common stockholders	$	(107,294)	$	(153,875)	$	(80,026)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders
Basic and diluted	150,098,776		140,873,504		54,972,827
Net loss per share attributable to common stockholders
Basic and diluted	$	(0.71)	$	(1.09)	$	(1.46)

Summary of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss per Share


	Fiscal Year Ended December 31,
	2023	2022	2021
RSUs, PSUs, and restricted stock	16,240,802	16,218,968	2,606,351
Stock options	4,621,021	10,333,771	20,342,259
Contingently issuable shares under ESPP	105,280	116,601	60,880
Total potentially dilutive securities	20,967,103	26,669,340	23,009,490

Revenue recognition - Summary of Deferred Contract Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Deferred contract costs [Roll Forward]
Balance at Beginning of Period	$ 65,645	$ 44,545	$ 25,837
Additions	56,890	53,379	36,509
Amortization Expense	(48,161)	(32,279)	(17,801)
Balance at End of Period	$ 74,374	$ 65,645	$ 44,545

Segment and geographic information (Tables)

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Summary of Financial Information by Each Reportable Segment

Financial information for each reportable segment was as follows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Revenue
Enterprise	$	420,646	$	314,038	$	186,954
Consumer	308,291		315,059		328,703
Total revenue	728,937		629,097		515,657

Segment cost of revenue
Enterprise	137,227		104,577		63,984
Consumer	144,525		149,254		159,342
Total segment cost of revenue	281,752		253,831		223,326

Segment gross profit
Enterprise	283,419		209,461		122,970
Consumer	163,766		165,805		169,361
Total segment gross profit	447,185		375,266		292,331

Reconciliation of segment gross profit to gross profit
Amortization of capitalized software	17,497		12,586		9,293
Amortization of intangible assets	2,900		2,900		1,022
Depreciation	443		643		760
Stock-based compensation	7,006		5,360		1,623
Total reconciling items	27,846		21,489		12,698
Total gross profit	$	419,339	$	353,777	$	279,633

Summary of Revenue by Region

The following table summarizes the revenue by region based on the billing address of the Company’s customers (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
North America	$	291,655	$	256,547	$	199,268
Europe, Middle East, Africa	221,699		189,618		168,612
Asia Pacific	163,747		137,829		107,924
Latin America	51,836		45,103		39,853
Total revenue	$	728,937	$	629,097	$	515,657

Summary of Long-lived Assets by Region

The following table presents the Company’s long-lived assets, which consist of tangible property and equipment, net of depreciation, and operating lease ROU assets, by geographic region (in thousands):


	December 31,		December 31,
	2023		2022
North America	$	7,007	$	12,782
Rest of world	3,109		5,556
Total long-lived assets	$	10,116	$	18,338

Stockholders' equity - Summary of SARs Activity (Details) - Stock Appreciation Rights - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
SARs Outstanding
Outstanding, beginning balance (in shares)	81,770
Granted (in shares)	0	0
Exercised (in shares)	(67,781)
Canceled (in shares)	(9,289)
Outstanding, ending balance (in shares)	4,700	81,770
Vested and expected to vest, SARs outstanding (in shares)	4,700
Exercisable, SARs outstanding (in shares)	4,558
Weighted Average Exercise Price
Outstanding, beginning balance (in USD per share)	$ 5.44
Granted (in USD per share)	0
Exercised (in USD per share)	5.30
Canceled (in USD per share)	6.58
Outstanding, ending balance (in USD per share)	5.11	$ 5.44
Vested and expected to vest, weighted average exercise price (in USD per shares)	5.11
Exercisable, weighted average exercise price (in USD per share)	$ 5.06
Outstanding, weighted average remaining contractual term	5 years 11 months 23 days	6 years 10 months 24 days
Outstanding, aggregate intrinsic value	$ 45	$ 418
Vested and expected to vest, weighted average remaining contractual term	5 years 11 months 23 days
Vested and expected to vest, aggregate intrinsic value	$ 45
Exercisable, weighted average remaining contractual term	5 years 11 months 19 days
Exercisable, aggregate intrinsic value	$ 44

Restructuring charges (Details) - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
Restructuring charges (Details) - USD ($) $ in Thousands	Feb. 13, 2023	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]
Reduction in global workforce, percent	10.00%
Restructuring charges		$ 10,100	$ 10,263	$ 0	$ 0
Employee Severance
Restructuring Cost and Reserve [Line Items]
Restructuring charges		8,900	$ 9,055
Share-Based Payment Arrangement
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 1,200

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Income taxes - Effective Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Federal tax expense	21.00%	21.00%	21.00%
State taxes, net of federal benefit	0.50%	1.24%	1.07%
Foreign rate differential	(1.40%)	(0.33%)	(0.12%)
Withholding taxes	(0.0177)	(0.0060)	(0.0078)
Nondeductible compensation	(10.20%)	(2.52%)	(5.29%)
Stock-based compensation	(1.84%)	(3.18%)	0.27%
Change in valuation allowance	(18.33%)	(21.41%)	(34.54%)
Research and development credits	7.94%	4.69%	16.87%
Nontaxable dividends	1.31%	0.00%	0.00%
Other	(0.73%)	(0.40%)	0.02%
Effective tax rate	(3.52%)	(1.51%)	(1.50%)

Investments and fair value measurements

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Investments and fair value measurements

4. Investments and fair value measurements

The Company’s assets and liabilities that are measured at fair value on a recurring or nonrecurring basis within the fair value hierarchy are as follows (in thousands):


As of December 31, 2023	Level 1		Level 2		Level 3
Current assets:
Cash equivalents:
Money market funds	$	266,692	$	—	$	—

Marketable securities:
U.S. government securities	$	—	$	171,372	$	—

Non-current assets:
Strategic investments	$	—	$	—	$	10,311

Non-current liabilities:
Cash settled stock appreciation rights	$	—	$	—	$	48


As of December 31, 2022	Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	130,377	$	—	$	—
U.S. government securities	—		48,900		—
Total cash equivalents	$	130,377	$	48,900	$	—

Marketable securities:
U.S. government securities	$	—	$	151,687	$	—

Non-current assets:
Strategic investments	$	—	$	—	$	12,104

Non-current liabilities:
Cash settled stock appreciation rights	$	—	$	—	$	462


	Warrants		Stock Appreciation Rights		Strategic Investments
Balance— December 31, 2020	$	160	$	268	$	—
Exercise of redeemable convertible preferred stock warrants	(160)		—		—
Vesting and remeasurement of SARs, net of exercises	—		550		—
Purchases of strategic investments	—		—		10,000
Balance— December 31, 2021	—		818		10,000
Vesting and remeasurement of SARs, net of exercises	—		(294)		—
Purchases of strategic investments	—		—		5,000
Amount reclassified from liability to equity upon exchange	—		(62)		—
Unrealized loss on strategic investments	—		—		(2,896)
Balance— December 31, 2022	—		462		12,104
Vesting and remeasurement of SARs	—		(161)		—
Exercises of SARs	—		(253)		—
Unrealized loss on strategic investments	—		—		(1,793)
Balance— December 31, 2023	$	—	$	48	$	10,311

During the fiscal year ended December 31, 2021, the remaining outstanding 12,595 warrants to purchase Series A-1 redeemable convertible preferred stock were exercised for an immaterial amount of cash proceeds at an exercise price of $0.196 per share. The Company reclassified the $0.2 million fair value of the warrants into Series A-1 redeemable convertible preferred stock on the consolidated balance sheet. The change in fair value of the warrants during fiscal year ended December 31, 2021 was immaterial.

The Company evaluates its strategic investments for impairment at each reporting period. This evaluation consists of several potential qualitative and quantitative impairment indicators including, but not limited to, the investee's financial metrics, whether there were any significant adverse changes in the economic environment or general market conditions of the geographies and industries in which the investee operates, and any other publicly available information that may affect the value of the investment. The Company determined impairment indicators existed as of June 30, 2023, and the fair value of its strategic investments was less than their carrying value. There were no other remeasurement events for the Company's strategic investments for the remainder of 2023.

The difference between the strategic investment’s cost basis of $15.0 million and the carrying value of $10.3 million is due to cumulative impairment charges of $4.7 million, of which $1.8 million was recorded during the second quarter of 2023, and $2.9 million was recorded during the third quarter of 2022.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Stockholders' equity

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stockholders' equity

12. Stockholders' equity

Preferred stock— In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 50,000,000 shares of undesignated preferred stock with a par value of $0.00001 per share with rights and preferences, including voting rights, designated from time to time by the board of directors.

Common stock— Common stockholders are entitled to one vote per share. Shares of common stock reserved for future issuance consisted of the following:


	December 31,	December 31,
	2023	2022
2010 Equity Incentive Plan:
Stock options outstanding	4,621,021	10,333,771
2021 Equity Incentive Plan:
RSUs outstanding and PSUs(1)	16,738,309	16,178,101
Shares available for future issuance under:
2021 Equity Incentive Plan	4,093,695	2,814,126
2021 Employee Stock Purchase Plan	2,350,803	1,929,578
Total shares of common stock reserved	27,803,828	31,255,576
(1) The number of PSUs reserved for issuance is based on the maximum achievement of the corporate performance metric.

Equity incentive plans— In 2010, the Company adopted the 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan provided for incentive stock options (“ISOs”), non-statutory stock options (“NSOs”, collectively with ISOs, “stock options”), SARs, restricted stock, and restricted stock units (“RSUs”) to be granted to eligible employees, directors, and consultants. The 2010 Plan was terminated in October 2021 in connection with the IPO but continues to govern the terms and conditions of the outstanding awards granted pursuant to the 2010 Plan. No further equity awards will be granted under the 2010 Plan.

The Company adopted the 2021 Equity Incentive Plan (the "2021 Plan") in September 2021, which became effective on October 28, 2021 (collectively with the 2010 Plan, the “Equity Incentive Plans”) and was approved by the Company’s stockholders. The 2021 Plan provides for the granting of ISOs, NSOs, SARs, restricted stock, RSUs, and performance awards to eligible employees, directors, and consultants.

The Company initially reserved 13,800,000 shares for issuance under the 2021 Plan. The amount available for issuance is subject to an annual increase on the first day of each calendar year, beginning on January 1, 2023, in an amount equal to 5% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding calendar year or a lesser amount determined by the Company’s Board of Directors or compensation committee. The amount available for issuance shall also include Returning Shares, which are any shares subject to awards granted under the 2010 Plan that, on or after October 29, 2021, expire or otherwise terminate without having been exercised in full, are tendered to or withheld by the Company for payment of an exercise price or for tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest. Additionally, any difference in (i) the number of PSUs reserved for future issuance based on maximum achievement of the corporate performance metric and (ii) the number of PSUs issued based on actual attainment are returned to the 2021 Plan.

On January 1, 2023, the shares available for future grants under the 2021 Plan automatically increased by 7,250,689 pursuant to the above evergreen provision of the 2021 Plan.

Equity Exchange— On July 11, 2022, the Company launched an equity exchange program (the “Equity Exchange”) in which eligible employees and executives were able to exchange certain outstanding stock options and SARs, whether vested or unvested, with a per share exercise price equal to or greater than $11.13, for RSUs on a one-for-one basis. Upon expiration of the offer to exchange on August 6, 2022, 6,958,544 stock options and SARs (collectively, the “Exchanged Awards”) were canceled and immediately exchanged for an equivalent number of new RSUs, representing a participation rate by eligible awards of approximately 97%.

The incremental stock-based compensation expense associated with the Equity Exchange was calculated as the excess of the fair value of each new RSU awarded, as measured on the date exchanged, over the fair value of the corresponding Exchanged Awards, as measured immediately prior to the exchange closing on August 6, 2022. The fair value of the new RSUs was estimated using the fair value of the Company’s common stock on the exchange date. The following table summarizes the weighted-average assumptions used in the Black-Scholes option-pricing model to estimate the fair value of the Exchanged Awards as of August 6, 2022:


Risk-free interest rate			3.0%
Expected volatility			68.6%
Expected life (in years)			4.9
Expected dividend yield			—%

As a result of the Equity Exchange, there was $45.7 million in incremental stock-based compensation expense from the modification accounting. That amount, as well as the remaining unrecognized expense associated with the Exchanged Awards at the time of the exchange, began to be recognized on a straight-line basis over the requisite service period for the new RSUs, adjusted as needed for those new RSUs issued for certain Exchanged Awards whose per share exercise prices were lower than the Company’s stock price at the exchange date. The requisite service periods for the new RSUs was determined by the per share exercise price of the corresponding Exchanged Awards, ranging from two to three years.

Restricted stock units and performance-based restricted stock units— The fair value of RSUs and PSUs are determined using the fair value of the Company’s common stock on the date of grant. The Company recognizes stock-based compensation expense for RSUs with service-based vesting conditions on a straight-line basis over the requisite service period for each award, which typically vest over a three or four-year period. Management estimates the number of PSUs that are expected to vest based on the anticipated achievement of the specified performance metrics. If the performance-based vesting condition is considered probable of being achieved, the Company recognizes expense over the requisite service period based on the probable outcome of achievement. If the performance goals are not met, or are considered improbable, no compensation cost is recognized, and any previously recognized compensation cost is reversed.

During the first quarter of 2023, the Company granted 645,833 PSUs to certain executives at target. Each PSU conveys a right to receive one share of the Company’s common stock on the date it vests, provided that the number of PSUs that will ultimately vest may vary from 0% to 150% of target based upon the achievement of the corporate performance metric at the end of the performance period. One quarter of the eligible PSUs vest upon certification of the corporate performance metric by the Board of Directors’ compensation committee in the first quarter of 2024, and the remaining 75% will vest equally over the following 12 quarters thereafter, subject to continual service by the grantee. Total stock-based compensation expense to be recognized may fluctuate during the performance period due to changes in forecasted achievement. The corporate performance metric associated with these awards was considered probable of being achieved since the grant date, and, as of December 31, 2023, management calculated a payout rate equal to 70% of the number of target shares granted based on actual attainment of the metric.

A summary of RSU and PSU activity under the 2021 Plan is as follows:


	RSUs Outstanding	Weighted Average Grant Date Fair Value		PSUs Outstanding	Weighted Average Grant Date Fair Value
Unvested - December 31, 2022	16,178,101	$	17.37	—	$	—
Granted	8,159,808	$	9.86	645,833	$	8.89
Released	(6,134,641)	$	16.42	—	$	—
Canceled	(2,433,691)	$	15.93	—	$	—
Unvested - December 31, 2023	15,769,577	$	14.07	645,833	$	8.89

The weighted-average grant date fair value of RSUs that were granted during the fiscal years ended December 31, 2022 and 2021, was $13.79 and $27.64, respectively. No PSUs were granted prior to the fiscal year ended December 31, 2023.

The aggregate fair value of RSUs that vested during the fiscal years ended December 31, 2023 and 2022 was $68.4 million and $50.7 million, respectively. No RSUs vested during the fiscal year ended December 31, 2021.

As of December 31, 2023, total unrecognized stock-based compensation expense related to unvested RSUs was $192.4 million, which will be recognized over a weighted average period of 2.7 years.

As of December 31, 2023, total unrecognized stock-based compensation expense related to unvested PSUs was $2.0 million, which will be recognized over a weighted average period of 1.4 years.

Stock options— The Company may grant stock options at exercise prices not less than the fair market value at the date of grant. These options generally expire 10 years from the date of grant. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period for each award, which is generally even over four years.

The following is a summary of activity for stock options having only service-based vesting conditions under the Equity Incentive Plans:


	Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (In Thousands)
Balance - December 31, 2022	10,283,771	$	4.18	6.38	$	66,234
Granted	—	—
Exercised	(5,477,153)	3.29
Canceled	(235,597)	7.58
Balance - December 31, 2023	4,571,021	$	5.08	3.23	$	44,309
Vested & expected to vest as of December 31, 2023	4,571,021	$	5.08	3.23	$	44,309
Exercisable as of December 31, 2023	4,405,278	$	4.96	3.23	$	43,157

There were no stock options granted during the fiscal years ended December 31, 2023 or 2022. The weighted average grant date fair value of stock options granted during the fiscal year ended December 31, 2021, was $16.01 per share.

Total aggregate intrinsic value of options exercised during the fiscal years ended December 31, 2023, 2022, and 2021 was $45.6 million, $13.7 million, and $59.7 million, respectively.

The decrease in weighted average remaining contractual term during the fiscal year ended December 31, 2023, is due to stock options held by the Company’s former CEO, Mr. Coccari, which will expire if not exercised by the end of the 90-day post-termination exercise window that begins upon completion of his transition agreement in February 2024.

As of December 31, 2023, total unrecognized stock-based compensation expense related to unvested stock options was immaterial.

The Company estimates the fair value of stock-based compensation for stock options by utilizing the Black-Scholes option-pricing model, which is dependent upon several variables, such as the expected option term, expected volatility of the Company’s stock price over the expected term, expected risk-free interest rate over the expected option term, and expected dividend yield rate over the expected option term. These amounts are estimates and, thus, may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The calculation of grant date fair value of stock options was based on the following weighted average assumptions:


	Fiscal Year Ended December 31,
	2021
Risk-free interest rate	1.0	%
Expected volatility	60.5	%
Expected life (in years)	6.0
Expected dividend yield	—	%

Stock appreciation rights— The Company may grant SARs at exercise prices not less than the fair market value at the date of grant. The SARs are liability-classified awards that generally expire 10 years from the date of grant. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period for each award, which is generally even over four years. Refer to Note 2 “Summary of Significant Accounting Policies—Stock-Based Compensation” for more information.

The following is a summary of activity for SARs under the Equity Incentive Plans:


	SARs Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (In Thousands)
Balance - December 31, 2022	81,770	$	5.44	6.90	$	418
Granted	—	—
Exercised	(67,781)	5.30
Canceled	(9,289)	6.58
Balance - December 31, 2023	4,700	$	5.11	5.98	$	45
Vested & expected to vest as of December 31, 2023	4,700	$	5.11	5.98	$	45
Exercisable as of December 31, 2023	4,558	$	5.06	5.97	$	44

There were no SARs granted during the fiscal years ended December 31, 2023 or 2022. The weighted average grant date fair value of SARs granted during the fiscal year ended December 31, 2021, was $22.47 per share.

Total aggregate intrinsic value of SARs exercised during the fiscal year ended December 31, 2023 was $0.3 million and immaterial during the fiscal years ended December 31, 2022 and 2021.

As of December 31, 2023, total unrecognized stock-based compensation expense related to unvested SARs was immaterial.


	Fiscal Year Ended December 31,
	2021
Risk-free interest rate	1.5	%
Expected volatility	60.9	%
Expected life (in years)	6.2
Expected dividend yield	—	%

Performance-based stock options— Under the Equity Incentive Plans, the Company may grant share-based awards whose vesting is contingent on meeting various departmental or company-wide performance goals, such as the achievement of certain sales targets or an IPO event, in lieu of or in addition to a service-based vesting condition (“Performance-Based Options”). Such awards are generally granted with an exercise price equal to the fair market value of the underlying common stock share on the date of grant and have a contractual term of 10 years. If vesting is dependent on satisfying a performance condition that is probable of being achieved, the Company estimates the expected term as the midpoint between the time at which the performance conditions are probable of being satisfied and the contractual term of the award. If vesting is dependent on satisfying a performance condition that is not probable of being achieved and the service period is not explicitly stated, the Company estimates the expected term as the contractual term. The remaining inputs to the Black-Scholes option pricing model used to determine grant date fair value, including risk-free interest, expected volatility, and expected dividend yield, are calculated using the same method as that used for stock options with service-based vesting conditions. Grants for Performance-Based Options are made out of the same pool of stock options available for future issuance under the Equity Incentive Plans.

Compensation expense for Performance-Based Options is based on the grant date fair market value. The Company recognizes expense for Performance-Based Options having either (a) multiple performance-based vesting conditions, or (b) performance and graded service-based vesting conditions, by separately attributing each vesting tranche of the award over the requisite service period applicable to each vesting condition. Management’s estimate of the number of shares expected to vest is based on the anticipated achievement of the specified performance goals. If the performance-based vesting condition is considered probable of being achieved, the Company recognizes expense over the remaining service period based on the probable outcome of achievement. If the performance goals are not met, no compensation cost is recognized, and any previously recognized compensation cost is reversed. For awards with both performance and service-based vesting conditions where the performance condition is considered improbable of being achieved, the Company does not recognize expense until the performance condition is satisfied, after which time expense is recognized over the requisite service period.

The Company had one Performance-Based Option outstanding as of December 31, 2023.The following table summarizes the activities of Performance-Based Options under the Equity Incentive Plans:


	Performance-Based Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (In Thousands)
Balance - December 31, 2022	50,000	$	3.06	5.58	$	375
Granted	—	—
Exercised	—	—
Canceled	—	—
Balance - December 31, 2023	50,000	$	3.06	4.58	$	584
Vested & expected to vest as of December 31, 2023	50,000	$	3.06	4.58	$	584
Exercisable as of December 31, 2023	26,041	$	3.06	4.58	$	304

As of December 31, 2023, total unrecognized stock-based compensation expense related to unvested Performance-Based Options was immaterial.

Employee stock purchase plan— The 2021 Employee Stock Purchase Plan (the “ESPP”) became effective on October 29, 2021. The Company initially reserved 2,800,000 shares of the Company's common stock under the ESPP. Shares reserved for issuance shall increase on the first day of the fiscal year, beginning in fiscal 2023, in an amount equal to the least of 1% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, three times the initial number of shares reserved under the ESPP, or a lesser amount determined by the Company’s Board of Directors or compensation committee. On January 1, 2023, the shares available for future grants under the ESPP automatically increased by 1,450,137 pursuant to the above evergreen provision of the 2021 ESPP.

The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount of 15% during an offering period. Offering periods are 24-month periods beginning on the first trading day on or after May 20 or November 20 (defined as the enrollment date). Each offering period has four purchase periods which last approximately 6 months, or the length of time between exercise dates (defined as the first trading day on or after May 20 and November 20 of each purchase period), except that the first purchase period of any offering period is the time between the enrollment date and first exercise date. At the start of an offering period, eligible employees may elect to contribute up to 15% of their eligible compensation each payroll period during that offering period to purchase shares of common stock in accordance with the ESPP.

On each exercise date, eligible employees will purchase the Company’s common stock at a price per share equal to 85% of the lesser of the fair market value of the Company’s common stock on (i) the enrollment date or (ii) the exercise date. During the fiscal year ended December 31, 2023, 1,029,344 shares of common stock were issued under the ESPP.

In the event that the fair market value per share of the Company’s common stock at the end of a six-month purchase period is lower than the fair market value per share at the first day of the related offering period, the plan’s reset provision cancels the current offering period immediately after the purchase date and automatically re-enrolls participants in a new offering period. During the fiscal years ended December 31, 2023 and 2022, ESPP resets resulted in total modification charges of $5.9 million and $3.4 million, respectively, to be recognized on a straight-line basis over the new, respective offering periods.


	Fiscal Year Ended December 31,
	2023	2022	2021
Risk-free interest rate	4.6%	3.5%	0.3%
Expected volatility	68.6%	68.5%	61.2%
Expected life (in years)	1.6	1.2	1.2
Expected dividend yield	—%	—%	—%

As of December 31, 2023, total unrecognized compensation cost for the ESPP was $8.1 million, which will be recognized over a weighted average period of 1.5 years.

Other equity transactions— During the fiscal year ended December 31, 2021, the Company issued 61,300 shares of Udemy restricted common stock to a former executive of CorpU at a grant date fair value per share of $34.14. As a result, the Company will recognize $2.1 million in total stock-based compensation expense on a straight line basis from August 2021 through August 2024.

During the fiscal year ended December 31, 2021, the Company facilitated a tender offer for certain eligible employees to sell 236,086 vested stock options and outstanding shares of common stock to an existing investor at a per share price of $23.75 per share. The Company recorded stock-based compensation of $1.6 million during the fiscal year ended December 31, 2021, in its consolidated statements of operations for the difference between the price paid and the fair value of the Company’s common stock on the date of the transaction.

Additionally, during the fiscal year ended December 31, 2021, the Company waived its right of first refusal and transfer restrictions with respect to certain transfers of outstanding common stock. Where the Company has concluded that such transfers included a deemed compensatory element as a result of both the Company’s role in facilitating the transfers and the buyers of the shares transferred having a pre-existing economic interest in the Company’s equity, the Company recorded stock-based compensation expense for the difference between the price paid and the fair market value on the date of the transaction. The Company recorded $4.0 million of stock-based compensation expense for such transactions during the fiscal year ended December 31, 2021.

Total stock-based compensation expense included in the consolidated statements of operations was as follows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Cost of revenue	$	7,006	$	5,360	$	1,623
Sales and marketing	30,859		29,054		8,637
Research and development	26,301		20,850		6,816
General and administrative	30,672		26,029		17,604
Restructuring charges	1,208		—		—
Total stock-based compensation expense	$	96,046	$	81,293	$	34,680

The Company capitalized $9.0 million and $5.8 million of $2.5 million of stock-based compensation expense as capitalized software during the fiscal years ended December 31, 2023, 2022, and 2021, respectively.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481004/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480237/815-40-50-6

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
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+ Details

Segment and geographic information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment and geographic information

14. Segment and geographic information

The Company’s Chief Executive Officer is its CODM. The CODM reviews separate financial information presented for the Company’s two segments, Enterprise and Consumer, in order to allocate resources and evaluate the Company’s financial performance.

The Enterprise segment is focused on helping business and government customers upskill and reskill their employees and public servants. The Consumer segment targets individual learners seeking to obtain hands-on learning, gain valuable job skills to advance their professional careers, or learn a new personal skill. The CODM measures the performance of each segment primarily based on segment revenue and segment gross profit.

Segment gross profit, as presented below, is defined as segment revenue less segment cost of revenue. Segment cost of revenue includes content costs, hosting and platform costs, customer support services, and payment processing fees that are allocable to each segment. Segment gross profit excludes amortization of capitalized software, depreciation, stock-based compensation, and amortization of intangible assets allocated to cost of revenue as the CODM does not include the information in his measurement of the performance of the operating segments. Additionally, the Company does not allocate sales and marketing expenses, research and development expenses, and general and administrative expenses because the CODM does not include the information in his measurement of the performance of the operating segments. The Udemy platform supports the operations of each segment.

The CODM does not use asset information by segments to assess performance and make decisions regarding allocation of resources, and the Company does not track its long-lived assets by segment. The geographic identification of these assets is set forth below.

Financial information for each reportable segment was as follows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Revenue
Enterprise	$	420,646	$	314,038	$	186,954
Consumer	308,291		315,059		328,703
Total revenue	728,937		629,097		515,657

Segment cost of revenue
Enterprise	137,227		104,577		63,984
Consumer	144,525		149,254		159,342
Total segment cost of revenue	281,752		253,831		223,326

Segment gross profit
Enterprise	283,419		209,461		122,970
Consumer	163,766		165,805		169,361
Total segment gross profit	447,185		375,266		292,331

Reconciliation of segment gross profit to gross profit
Amortization of capitalized software	17,497		12,586		9,293
Amortization of intangible assets	2,900		2,900		1,022
Depreciation	443		643		760
Stock-based compensation	7,006		5,360		1,623
Total reconciling items	27,846		21,489		12,698
Total gross profit	$	419,339	$	353,777	$	279,633

Geographic information

Revenue: The following table summarizes the revenue by region based on the billing address of the Company’s customers (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
North America	$	291,655	$	256,547	$	199,268
Europe, Middle East, Africa	221,699		189,618		168,612
Asia Pacific	163,747		137,829		107,924
Latin America	51,836		45,103		39,853
Total revenue	$	728,937	$	629,097	$	515,657

During the fiscal years ended December 31, 2023, 2022, and 2021, the United States was the only country to exceed 10% of the Company’s total revenue.

Long-lived assets: The following table presents the Company’s long-lived assets, which consist of tangible property and equipment, net of depreciation, and operating lease ROU assets, by geographic region (in thousands):


	December 31,		December 31,
	2023		2022
North America	$	7,007	$	12,782
Rest of world	3,109		5,556
Total long-lived assets	$	10,116	$	18,338

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Stockholders' equity - Summary of Common Stock Reserved for Future Issuance (Details) - shares	Dec. 31, 2023	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total shares of common stock reserved (in shares)	27,803,828	31,255,576
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options outstanding (in shares)	4,621,021	10,333,771
Restricted Stock Units RSU and Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs outstanding and PSUs (in shares)	16,738,309	16,178,101
2021 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options available for future issuance (in shares)	4,093,695	2,814,126
2021 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options available for future issuance (in shares)	2,350,803	1,929,578

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Net loss per share - Summary of Net Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Numerator:
Net loss attributable to common stockholders	$ (107,294)	$ (153,875)	$ (80,026)
Net loss attributable to common stockholders	$ (107,294)	$ (153,875)	$ (80,026)
Weighted-average shares used in computing net loss per share attributable to common stockholders
Basic (in shares)	150,098,776	140,873,504	54,972,827
Diluted (in shares)	150,098,776	140,873,504	54,972,827
Net loss per share attributable to common stockholders
Basic (in dollars per share)	$ (0.71)	$ (1.09)	$ (1.46)
Diluted (in dollars per share)	$ (0.71)	$ (1.09)	$ (1.46)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

+ Details

- Definition

+ References + Details

Revenue recognition - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2020
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with customer, liability, revenue recognized	$ 268.3	$ 204.4	$ 139.5
Remaining performance obligation, amount	$ 552.3
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, percentage	70.00%
Revenue, remaining performance obligation, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, percentage	30.00%
Revenue, remaining performance obligation, period

Summary of significant accounting policies

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Summary of significant accounting policies

2. Summary of significant accounting policies

Basis of consolidation and presentation— The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation, and all other normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results of the periods presented have been made.

Segment information— On March 1, 2023, Greg Brown succeeded Gregg Coccari as the Company’s Chief Executive Officer and chief operating decision maker (“CODM”). The Company defines its segments as those operations the CODM regularly reviews to allocate resources and assess performance. For the fiscal years ended December 31, 2023, 2022, and 2021, the Company operated under two operating and reportable segments: Enterprise and Consumer. The Company continually monitors and reviews its segment reporting structure in accordance with Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, to determine whether any changes have occurred that would impact its reportable segments. For further information on the Company’s segment reporting, see Note 14 – Segment and geographic information.

Use of estimates— The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the results of operations during the reporting periods.

Significant estimates and assumptions reflected in the consolidated financial statements include, but are not limited to, allowance for credit losses, capitalization of internally developed software and associated useful lives, stock-based compensation, determination of the income tax valuation allowance and the potential outcome of uncertain tax positions, estimated service period for consumer single course purchases, the period of benefit for deferred commissions, the fair value and associated useful lives of intangible assets and goodwill acquired via business combinations, the valuation of privately-held strategic investments, including impairments, and the carrying value of our operating lease right-of-use (“ROU”) assets. Management periodically evaluates such estimates and assumptions for continued reasonableness.

Actual results may ultimately differ from management’s estimates and such differences could be material to the Company’s financial position and results of operations.

Concentration of credit risk— Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, restricted cash, and accounts receivable. For cash and restricted cash, the Company is exposed to credit risk in the event of default by the financial institutions to the extent the amounts recorded on the accompanying consolidated balance sheets are in excess of federal insurance limits. The Company’s investments that are classified as cash equivalents and marketable securities consist of high-credit-quality instruments and fixed-income securities.

The Company generally does not require collateral or other security in support of accounts receivable. To reduce credit risk, management performs ongoing evaluations of its customers’ financial condition and maintains an allowance based upon expected credit losses of outstanding receivables. The Company had no customers who accounted for more than 10% of accounts receivable as of December 31, 2023, or December 31, 2022. No customer accounted for more than 10% of total revenue during the fiscal years ended December 31, 2023, 2022, or 2021.

Summary of significant accounting policies

Revenue recognition— The Company accounts for revenue under ASC Topic 606, Revenue from Contracts with Customers. The Company’s two sources of revenues are its Enterprise and Consumer business channels.

Enterprise revenue— The Company primarily generates revenue by selling subscription licenses to a variety of enterprise and government customers.

The Company’s subscription contracts with enterprise customers generally have annual or multi-year contractual terms and consist of a fixed quantity of seat licenses, which allows each seat to access an unlimited number of course enrollments during the contract term. Enterprise license subscriptions include Team Plan, Enterprise Plan, Udemy Business Pro, and Leadership Academy. Subscribers retain access to the courses in which they enroll for the duration of their subscriptions (including any renewal period), even if the instructor subsequently elects to remove the course from the Company’s subscription programs. Enterprise contracts are typically evidenced by a fully executed Master Services Agreement with an accompanying executed Order Form specifying the contractual subscription term and pricing. Revenue is recognized ratably over the respective contractual subscription term beginning on the date that the platform is made available to the customer. Enterprise revenue recognized from professional services was immaterial for the periods presented.

Standard subscription agreements have auto-renewal clauses, which allow the agreement to continue after the expiration of the initial term. The Company’s standard billing terms are to invoice upfront annually for contracts with terms of one year or longer. For contracts that are less than one year, the Company generally bills in advance on a quarterly or semi-annual basis. The Company recognizes unbilled receivables that relate to consideration for services completed but not billed as of period end. Unbilled receivables are recorded in accounts receivable, net, and were not material for any period presented.

Consumer revenue— The Company generates revenue by selling access to course content on the Udemy platform directly to individual learners. Consumer revenues consist of (i) single course purchases and (ii) consumer subscriptions. All contracts with consumer customers are billed in advance and require payment via credit card by the customer prior to accessing any course content, or in the case for new consumer subscription customers, upon expiration of a 7-day free trial available to new customers in certain jurisdictions.

After checkout, consumer customers purchasing a single course receive a lifetime access license to the digital course content in addition to stand-ready access to the Udemy platform online services needed to access the content. Consumer subscription plans offer on-demand access to a library of courses over a subscription term, as well as additional features and functionalities.

Consumer revenue transactions are governed by Udemy’s standard terms of use. The time between a customer’s payment and the receipt of funds is not significant. Payment terms are generally fixed and do not include variable consideration. Consumer revenues are recorded net of actual and estimated refunds and exclude any taxes that are collected from learners and remitted to governmental authorities. Consumer revenue arrangements do not include significant obligations associated with warranties.

Consumer subscriptions are either one-month or one-year in duration and paid in advance, with new customers in certain jurisdictions able to sign up for a 7-day free trial period. Once the free trial period lapses and advance payment is made, there is no right to a refund (unless otherwise required by applicable law). Subscribers have continuous access to enroll in and consume an unlimited number of curated courses included in the subscription catalog on the platform during the subscription term. Subscribers retain access to the courses in which they enroll for the duration of their subscriptions (including any renewal period), even if the instructor subsequently elects to remove the course from the Company’s subscription programs. The continual access to the platform represents a series of distinct services, as the Company continually provides access to, and fulfills its obligation to, the customer over the contract term. Consumer subscriptions automatically renew at the end of the subscription term. Customers may cancel renewal of their subscription at any point but will retain their access to the platform until the end of the current subscription term.

Revenue from contracts with customers is recognized when control of promised services is transferred. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these services. The Company accounts for revenue contracts with customers using the five-step model under ASC Topic 606:

1) Identify the contract with a customer

Udemy determines a contract with a customer to exist when the contract is approved, each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, the customer has the ability and intent to pay, and the contract has commercial substance. At contract inception, the Company evaluates whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience if available.

2) Identify the performance obligations in the contract

Performance obligations committed in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from Udemy, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract. Customers do not have the ability to take possession of the software supporting the platform and, as a result, contracts are accounted for as service arrangements.

The non-exclusive lifetime access license associated with single course purchases and the licensed content associated with subscriptions are not considered distinct from the Udemy platform, because the course content is significantly integrated, and highly interdependent with the platform. Specifically, the learner does not obtain control of the course content’s intellectual property and functionality without the Udemy platform. Accordingly, management concluded there is a single, combined performance obligation, which is customer’s access to the online content on the Udemy platform, representing a series of distinct services as the Company continually provides access to and fulfills its obligation to allow access to licensed content and platform functionality to the learner.

3) Determine the transaction price

The transaction price is determined based on the consideration to which Udemy expects to be entitled in exchange for transferring services to the customer. The prices for Consumer and Enterprise, or Udemy Business (“UB”), contracts are fixed at contract inception and do not contain significant estimates related to variable consideration. With respect to single course purchases, consumers may request a full refund within 30 days after the initial purchase transaction. The Company estimates and establishes a refund reserve based on historical refund rates, which has historically been immaterial. None of the Company’s contracts contain a significant financing component. Revenue excludes taxes collected from customers, which are subsequently remitted to governmental entities (e.g., sales and other indirect taxes).

4) Allocate the transaction price to performance obligations in the contract

Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on each performance obligation’s relative standalone selling price.

As access to content is not considered distinct from the Udemy platform hosting services, the transaction price is allocated to a single performance obligation.

5) Recognize revenue when or as performance obligations are satisfied

Revenue is recognized at the time the related performance obligation is satisfied by transferring the control of the promised service to a customer. Revenue is recognized in an amount that reflects the consideration that Udemy expects to receive in exchange for those services. Udemy has a stand ready obligation to deliver its services continually throughout the requisite contract period, which is either lifetime access for consumer single course purchases or the contractual subscription term for UB and consumer subscription customers. As such, the Company recognizes revenue on a straight-line basis as it satisfies the performance obligation, using an estimated service period for consumer single course purchases and the contractual subscription term for UB and consumer subscription customers.

The Company records contract liabilities to deferred revenue for amounts billed to customers in advance of the performance obligations being satisfied, and primarily consists of the unearned portion of enterprise and consumer services. The amount of revenue recognized in the periods presented from performance obligations satisfied (or partially satisfied) in prior periods was not material.

Other than the circumstances noted below, no significant judgment has historically been required in determining the amount and timing of revenue from the Company’s contracts with customers.

Principal vs. agent—In order to determine if revenue should be reported gross or net of either payments to third-party instructors or amounts retained by reseller partners who sell access to Enterprise subscription offerings, the Company evaluated whether Udemy acts as the principal in sales of its online course offerings. An entity is the principal if it controls a good or service before it is transferred to the end customer. Key indicators that management evaluated in determining gross versus net treatment included but are not limited to:

•the nature of the Company’s promise to the customer, as well as the distinct performance obligation identified;

•the underlying contract terms and conditions between the parties to the transaction;

•which party is primarily responsible for fulfilling the promise to provide the specified good or service to the end customer;

•which party has inventory risk before the specified good or service has been transferred to the end customer; and

•which party has discretion in establishing the price for the specified good or service.

Based on an evaluation of the above indicators, management determined that the Company is the principal to learners who purchase access to online course content via direct or reseller sales of its enterprise and consumer offerings. The Company controls the promised goods or services (i.e., access to course content via the Udemy platform) before it is transferred to the customer and is primarily responsible for fulfillment with respect to delivering access to course content. The Company is the entity which licenses content to learners as the agreements with instructors grant the Company the right to sub-license content to its learners at its discretion. The Company also has substantial discretion to determine the pricing of its offerings. Therefore, the Company reports the gross purchase price paid by the customer related to these arrangements in the revenue caption of the consolidated statements of operations. The Company records payments to instructors as content costs within cost of revenues, while amounts retained by reseller partners for Enterprise sales are recognized as customer support costs within cost of revenues and deferred sales commissions within sales and marketing, based on the nature of the partnership transaction.

Estimated service period for consumer single course purchases—The Company considers a variety of data points when determining the estimated service period for a consumer single course purchase over which revenue is recognized. Quantitative data points considered include, but are not limited to, the average time period between a learner’s purchase date and the last date the learner accesses the purchased content, the average total hours consumed for a given purchase, and the time period over which learner activity stabilizes. Management also considers certain qualitative factors such as the nature of the Company’s consumer offerings, known online trends, and, to the extent publicly available, service periods of competitors’ online content that is similar in nature to those offered by the Company. The Company believes consideration of all of these factors enables the Company to determine the best representation of the time period during which consumer learners access the online course content on the Company’s platform and therefore the service period over which the Company provides services to learners. Determining the estimated service period is subjective and requires management’s judgment. Future usage patterns may differ from historical usage patterns, and the estimated

service period may change in the future. The estimated service period for consumer single course purchase transactions is four months from the date of enrollment.

Cost of revenues— Costs of revenues are related to content costs (which are payments to instructors), payment and mobile processing fees, costs associated with the hosting of digital content, employee-related expenses for the customer support organization, including salaries, benefits, stock-based compensation, facilities and other expenses, depreciation of network equipment, and amortization of capitalized software.

Advertising and sponsorship costs— Advertising costs are expensed as incurred. In general, sponsorship costs are expensed on a straight-line basis over the contractual sponsorship term. Prepayments made under sponsorship contracts are included in the prepaid expenses and other current assets caption of the consolidated balance sheets. Advertising and sponsorship costs are recorded in sales and marketing expenses in the consolidated statements of operations and was $82.5 million, $97.0 million and $105.2 million for the fiscal years ended December 31, 2023, 2022 and 2021, respectively.

Research and development— Research and development costs are expensed as incurred. Research and development expenses include salaries, benefits, stock-based compensation, costs related to the ongoing management, maintenance, and expansion of features and services offered on the Company’s platform. Research and development costs also include contracted services, supplies, and other miscellaneous expenses.

Stock-based compensation— The Company accounts for its stock-based compensation pursuant to ASC Topic 718, Compensation-Stock Compensation, which requires the measurement and recognition of stock-based awards using the estimated fair value of the awards on the date of grant. Stock-based awards include stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock appreciation rights (“SARs”), and restricted stock granted to employees, directors, and non-employees, and stock purchase rights granted to employees under the Employee Stock Purchase Plan (“ESPP Rights”). No stock options or SARs have been granted since the Company’s initial public offering (“IPO”) in 2021.

The Company estimates the fair value of RSUs, PSUs, and restricted stock based on the fair value of the Company’s common stock on the date of grant. The Company estimates the fair value of stock options, SARs, and ESPP Rights using the Black-Scholes option-pricing model, which requires the use of the following subjective and complex assumptions:

Expected term— For stock options and SARs, the Company has elected to use the midpoint of the vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. For ESPP Rights, the expected term is equal to the purchase periods in a given offering period.

Risk-free interest rate— The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the award’s expected term.

Expected volatility— The Company estimates future expected volatility by considering both the average volatility of a peer group of representative public companies with sufficient trading history and, to the extent available, its historical volatility over the expected term.

Dividend yield— The expected dividend was assumed to be zero as the Company has never paid dividends and has no current plans to do so.

Stock appreciation rights granted to employees are settled in cash upon exercise. The Company accounts for SARs in the other liabilities, non-current caption in the accompanying consolidated balance sheets. Vested and outstanding SARs are subject to remeasurement at each balance sheet date using the Black-Scholes option-pricing model and the assumptions described above, and any change in fair value is recognized as a component of expense. The Company adjusts the fair value of the liability for vested and outstanding SARs until the earlier of the exercise or expiration of the SARs.

For awards with only service-based vesting conditions, the Company recognizes the resulting stock-based compensation on a straight-line basis over the requisite service period of the awards. For awards that are subject to both performance and service-based vesting conditions, the Company separately attributes stock-based compensation expense for each vesting tranche of the award over their requisite service periods. The Company accounts for forfeitures in the period they occur.

Management estimates the number of PSUs that are expected to vest based on the anticipated achievement of the specified performance metrics. If the performance-based vesting condition is considered probable of being achieved, the Company recognizes expense over the requisite service period based on the probable outcome of achievement. If the performance goals are not met, or are considered improbable, no compensation cost is recognized, and any previously recognized compensation cost is reversed.

During the fourth quarter of 2023, the Company's began funding withholding taxes due upon the vesting of employee RSUs and the exercise of stock options in certain jurisdictions by net share settlement, rather than its previous approach of selling shares of the Company’s common stock. The amount of withholding taxes related to net share settlement is reflected as (i) a reduction to additional paid-in-capital and (ii) cash outflows for financing activities when the payments are made. The shares withheld by the Company as a result of net share settlement are returned to the pool of shares available for future issuance. Therefore, they are not considered issued and outstanding and do not impact the calculation of net loss per share, basic and diluted, attributable to common stockholders.

Income taxes— The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires an asset and liability approach in accounting for income taxes. Under this method, the tax provision includes taxes currently due plus the net change in deferred tax assets and liabilities. Deferred tax assets and liabilities arise from the temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements, as well as from net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the tax rates expected to be in effect when the taxes will actually be paid or refund received, as provided for under currently enacted tax law. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, is not expected to be realized.

ASC 740 prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under this guidance, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company recognizes interest accrued related to uncertain tax positions as a component of the provision for income taxes. There was no accrued interest or penalties associated with any uncertain tax positions, nor was any interest expense recognized during the fiscal years ended December 31, 2023, 2022, or 2021. The Company does not currently anticipate that any significant increase or decrease to uncertain tax positions will be recorded during the next twelve months.

Translation of foreign currency— The Company’s reporting currency is the U.S. dollar. The Company determines the functional currency for each of its foreign subsidiaries by reviewing their operations and currencies used in their primary economic environments. Assets and liabilities for foreign subsidiaries with functional currency other than U.S. dollar are translated into U.S. dollars at the rate of exchange existing at the balance sheet date. Statements of operations amounts are translated at average exchange rates for the period. Translation gains and losses are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity (deficit). Remeasurement gains and losses are included in other income (expense), net in the consolidated statements of operations. Monetary assets and liabilities are remeasured at the exchange rate on the balance sheet date and nonmonetary assets and liabilities are measured at historical exchange rates.

Net loss per share attributable to common stockholders— Prior to the completion of the Company’s IPO and the conversion of all outstanding preferred shares into common stock, basic and diluted net loss per share attributable to common stockholders was computed in conformity with the two-class method required for participating securities. The Company considered all series of its redeemable convertible preferred stock to be participating securities as the holders of such stock had the right to receive nonforfeitable dividends on a pari passu basis in the event that a dividend was paid on common stock. Under the two-class method, the net loss attributable to common stockholders was not allocated to the redeemable convertible preferred stock as the preferred stockholders did not have a contractual obligation to share in the Company’s losses.

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents to the extent they are dilutive. For purposes of this calculation, common stock options, RSUs, PSUs, restricted stock, and contingently issuable shares under the Company’s ESPP plan are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for the periods presented. For the fiscal year ended December 31, 2021, outstanding redeemable convertible preferred stock and redeemable convertible preferred stock warrants were also considered to be common stock equivalents, but were excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect was anti-dilutive.

Comprehensive loss— Comprehensive loss consists of two components, net loss attributable to common stockholders and other comprehensive income (loss), net of tax. Other comprehensive income (loss), net of tax, refers to revenue, expenses, gains, and losses that under GAAP are recorded as an element of stockholders’ equity (deficit) but are excluded from net loss attributable to common stockholders. The Company’s other comprehensive income (loss) for the fiscal years ended December 31, 2023 and 2022 consisted of changes in unrealized holding gains and losses on available-for-sale securities and foreign currency translation gains and losses. The Company’s other comprehensive loss for the fiscal year ended December 31, 2021 consisted of foreign currency translation losses.

Fair value of financial instruments— The Company considers fair value as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value are either observable or unobservable. Observable inputs reflect assumptions that market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based on their own market assumptions.

The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value:

Level 1— Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2— Inputs are observable, unadjusted quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data; and

Level 3— Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

The carrying amounts of cash, cash equivalents, restricted cash, accounts receivable, and accounts payable approximate fair value due to the relatively short-term maturities and are classified as current assets and liabilities, as appropriate, in the accompanying consolidated balance sheets.

The Company’s money market funds and sweep account are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets. The Company’s investments in U.S. government securities are classified within Level 2 of the fair value hierarchy because they have been valued using inputs other than quoted prices in active markets that are directly or indirectly observable. The Company’s strategic investment is classified within Level 3 of the fair value hierarchy because it has been valued using significant unobservable inputs for which the Company has been required to develop its own assumptions.

Cash and cash equivalents— Cash and cash equivalents include on demand deposits, money market funds, and other highly liquid investments with original or remaining maturities of less than 90 days when purchased. Cash equivalents also include amounts in transit from certain payment processors for credit and debit card transactions, which typically settle within five business days.

Restricted cash— Restricted cash primarily consists of cash restricted in connection with lease agreements for the Company’s facilities. Restricted cash is included in current assets for leases that expire within one year from the balance sheet date and in non-current assets for leases that expire in more than one year from the balance sheet date.

Marketable securities— Marketable securities consist of obligations issued by the U.S. Treasury and other U.S. federal agencies, corporate debt, and commercial paper securities, with an original maturity greater than 90 days at the date of purchase and are classified as available-for-sale securities. As the Company views these securities as available to support current operations, it has classified all available-for-sale securities as current assets. Available-for-sale securities are initially recorded at cost and periodically adjusted to fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit), while realized gains and losses are reported within other income (expense), net as a component of net loss attributable to common stockholders.

Accounts receivable, net— Accounts receivable primarily represent amounts owed to the Company for Enterprise subscriptions. Also included in accounts receivable are amounts due from payment processors or mobile application store partners that settle over a period longer than five business days. Accounts receivable balances are recorded at the invoiced amount and are non-interest-bearing. Accounts receivable is presented net of allowance for credit losses in the accompanying consolidated balance sheets.

The Company maintains an allowance based upon expected credit losses of outstanding receivables. Management derives its estimate using a variety of factors, including historical collection and loss patterns; the current aging of receivables; geographic and other customer-specific credit risk factors; and reasonable and supportable forecasts of future economic conditions which inform adjustments to historical loss patterns. The provision for expected credit losses is recorded in general and administrative expenses in the accompanying consolidated statements of operations. Accounts receivable deemed to be uncollectible are written off, net of expected or actual recoveries.


	Balance at Beginning of Period		Charged to Expenses		Charges Utilized/Written-off, Net of Recoveries		Balance at End of Period
Allowance for credit losses (in thousands)
Fiscal Year Ended December 31, 2023	$	1,528	$	1,662	$	(1,920)	$	1,270
Fiscal Year Ended December 31, 2022	$	678	$	960	$	(110)	$	1,528
Fiscal Year Ended December 31, 2021	$	643	$	326	$	(291)	$	678

Deferred contract costs— Sales commissions earned by the Company’s sales force on both new and renewal business are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized on a straight-line basis over an estimated period of benefit of four years, as commissions paid for initial and renewal contracts are generally not considered commensurate. The Company determined the period of benefit by taking into consideration the length of terms in its Enterprise customer contracts, changes and enhancements in course offerings, and other factors.

In addition, a portion of the revenue share retained by enterprise reseller partners from sales to UB customers is considered an incremental and recoverable cost of obtaining a contract with a customer. This cost is deferred and amortized on a straight-line basis over the service term of the corresponding contractual subscription term, as commissions paid to resellers on initial and renewal contracts are generally commensurate.

Amounts expected to be recognized within one year of the consolidated balance sheet dates are recorded as deferred contract costs, current, while the remaining portion is recorded as deferred contract costs, non-current in the consolidated balance sheets. Deferred contract costs are periodically analyzed for impairment. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of operations.

Property and equipment, net— Property, equipment, and purchased software are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, which are generally three years for computers, purchased software, and equipment, and five years for furniture and fixtures. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives of the assets or the term of the related lease. Expenditures for repairs and maintenance are charged to expense as incurred. Upon disposition or retirement, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is reflected as operating expenses in the consolidated statements of operations.

Capitalized software, net— The Company capitalizes costs to develop software for internal use incurred during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Once an application has reached the development stage, qualifying internal and external costs are capitalized until the software feature is substantially complete and ready for its intended use. Capitalized qualifying costs are amortized on a straight-line basis when the software is ready for its intended use over an estimated useful life, which is generally three years. The Company evaluates the useful lives of these assets and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

Operating leases— The Company leases real estate facilities under non-cancelable operating leases. The Company determines if an arrangement contains a lease at inception based on whether there is an identified tangible asset and whether the Company controls the use of the identified asset throughout the period of use.

The Company adopted Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842) on January 1, 2022.

Operating leases are included in operating lease ROU assets and in operating lease liabilities in the accompanying consolidated balance sheet. Operating lease ROU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

The Company measures its operating lease liabilities at lease commencement date based on the present value of total lease payments over the lease term. Total lease payments are discounted to present value using the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company’s operating leases generally do not provide an implicit rate, the Company estimates its incremental borrowing rate using information available at the lease commencement date, including but not limited to credit rating, lease term, and the currency in which the arrangement is denominated. The Company’s operating lease ROU assets are equal to the corresponding operating lease liability, adjusted for payments made to the lessor at or before the commencement date, initial direct costs incurred, and tenant incentives under the lease.

The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement. The Company does not allocate consideration between lease and non-lease components. Variable lease payments, such as those for common area maintenance or property taxes, are not included in the measurement of operating lease liabilities and are expensed as incurred. In addition, the Company does not recognize operating ROU assets or operating lease liabilities for leases with a term of 12 months or less for all asset classes. Operating lease expense is recognized on a straight-line basis over the lease term.

Lease accounting prior to the adoption of Topic 842

The Company recorded total rent expense on a straight-line basis over the lease term consistent with Topic 840, Leases.

Strategic investments— The Company holds an investment in equity securities of a privately held company without a readily determinable fair value and in which the Company does not have a controlling interest. Investments in equity securities without readily determinable fair values are initially recorded at cost and are subsequently adjusted to fair value only in the event of either price changes from observable transactions in the same or a similar security from the same issuer or impairment, as discussed below. This practice is referred to as the measurement alternative.

Privately held equity securities are valued using significant unobservable inputs or data in inactive markets. This valuation requires judgment due to the absence of market prices and inherent lack of liquidity and are classified as Level 3 in the fair value hierarchy. In determining the estimated fair value of investments in privately held companies, the Company utilizes the most recent data available including observed transactions, such as equity financing transactions of the investees and sales of the existing shares of the investees’ securities. In addition, the determination of whether an observed transaction is similar to the equity securities held by the Company requires significant management judgment based on the rights and preferences of the securities.

The Company evaluates its strategic investment for impairment at each reporting period. This evaluation consists of several potential qualitative and quantitative impairment indicators including, but not limited to, the investee's financial metrics, whether there were any significant adverse changes in the economic environment or general market conditions of the geographies and industries in which the investee operates, and any other publicly available information that may affect the value of the investment. Based on assessments performed during the fiscal years ended December 31, 2023 and 2022, the Company recognized impairment losses of $1.8 million and $2.9 million, respectively, which are recorded in other income (expense), net in the accompanying consolidated statements of operations. No impairment losses were recorded in the fiscal year ended December 31, 2021.

Goodwill and intangible assets— Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. No such triggering events were noted for the fiscal years ended December 31, 2023, 2022, or 2021.

Goodwill represents the excess purchase price over net assets acquired in the Company’s business combinations. The Company evaluates and tests the recoverability of its goodwill for impairment at least annually, during the fourth quarter of each fiscal year, or more often if and when circumstances indicate that goodwill may not be recoverable. No impairments were recorded during the fiscal years ended December 31, 2023, 2022, or 2021 as the result of these assessments.

Impairment of long-lived assets— The Company evaluates the carrying value of long-lived assets, such as property and equipment, whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset, including disposition, are less than the carrying value of the asset. The impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. The Company did not identify any impairment losses on long-lived assets for the fiscal years ended December 31, 2023, 2022, or 2021.

Self-insurance— The Company is self-insured for medical benefits offered to certain employees, up to certain stop-loss limits. Such costs are accrued based on known claims and estimates of incurred but not reported (“IBNR”) claims. IBNR claims are estimated using historical claim information and actuarial estimates. As of December 31, 2023, the accrued liability for self-insurance totaled $1.3 million and is included in accrued compensation and benefits on the consolidated balance sheets. The Company was not self-insured as of or prior to December 31, 2022.

Business combinations— In accordance with applicable accounting standards, the Company estimates the fair value of acquired assets and assumed liabilities as of the acquisition date of business combinations. The purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The purchase price is determined based on the fair value of the assets transferred, liabilities assumed, and equity interests issued, after considering any transactions that are separate from the business combination. The excess of fair value of purchase consideration over the fair values of the identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer relationships and developed technology, costs to recreate acquired vendor relationships, royalty rates, and discount rates.

The estimates are inherently uncertain and subject to revision as additional information is obtained during the measurement period for an acquisition, which may last up to one year from the acquisition date. During the measurement period, management may record adjustments to the fair value of tangible and intangible assets acquired and liabilities assumed, with a corresponding offset to goodwill. After the conclusion of the measurement period or the final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to earnings.

Recently Adopted Accounting Pronouncements Adopted in 2023

There are no recently issued accounting pronouncements that were adopted by the Company during the fiscal year ended December 31, 2023.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which aims to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses and the chief operating decision maker. The standard will become effective for the Company’s fiscal year ended December 31, 2024, and interim periods during the fiscal year ended December 31, 2025, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the potential impact of the new standard on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. The standard will become effective for the Company’s fiscal year ended December 31, 2025, with early adoption permitted. The Company is currently assessing the potential impact of the new standard on the Company’s consolidated financial statements.

Consolidated balance sheet components - Summary of Capitalized Software, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Capitalized software	$ 85,160	$ 63,748
Less accumulated amortization	(53,772)	(36,336)
Total expected amortization	$ 31,388	$ 27,412

Accrued expenses and other current liabilities (Tables)

12 Months Ended

Dec. 31, 2023

Payables and Accruals [Abstract]

Summary of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):


	December 31,		December 31,
	2023		2022
Accrued expenses	$	13,773	$	8,494
Indirect tax reserves	1,432		6,627
Indirect tax payables	8,758		9,137
Other current liabilities	3,815		6,989
Accrued expenses and other current liabilities	$	27,778	$	31,247

Summary of Changes to the Withholding Tax Reserve

Changes to the instructor withholding tax reserve are as follows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022		2021
Balance, beginning of period	$	2,528	$	17,036	$	22,166
Amounts charged to (released from) expense	89		(781)		(5,130)
Net payments and settlements	(2,617)		(13,727)		—
Balance, end of period	$	—	$	2,528	$	17,036

Accrued expenses and other current liabilities - Schedule of Changes to Withholding Tax Reserve (Details) - Historical Tax Withholding Possible Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Loss Contingency Accrual [Roll Forward]
Balance, beginning of period	$ 2,528	$ 17,036	$ 22,166
Amounts charged to (released from) expense	89	(781)	(5,130)
Net payments and settlements	(2,617)	(13,727)	0
Balance, end of period	$ 0	$ 2,528	$ 17,036

Related party transactions	12 Months Ended
Related party transactions	Dec. 31, 2023
Related Party Transactions [Abstract]
Related party transactions	11. Related party transactions Naspers Ltd. (“Naspers”), through an investment entity controlled by Prosus N.V. (“Prosus”), beneficially owns more than 5% of the Company’s outstanding capital stock. A current member of the Company’s Board of Directors is the Chief Executive Officer of a Prosus operating subsidiary, OLX Global B.V. A former member of the Company’s Board of Directors, who resigned in September 2022, was an executive officer of Prosus. Naspers and certain entities directly and indirectly controlled by Naspers are customers of the Company’s Enterprise subscription offering. The Company recorded $1.9 million, $1.5 million, and $1.5 million of revenue during the fiscal years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023 and December 31, 2022, the Company had immaterial accounts receivable balances with these customers. Insight Partners, where a member of the Company’s Board of Directors is a Managing Director, has certain affiliates who are customers of the Company’s Enterprise subscription offering. The Company recorded $0.7 million of revenue from services provided to these customers during the fiscal year ended December 31, 2023. As of December 31, 2023, the Company had an accounts receivable balance of $0.2 million with these customers. Insight Partners is also affiliated with certain vendors that the Company has contracted to provide technology and software solutions. The Company recorded $0.8 million, $0.9 million, and $0.9 million of expense during the fiscal years ended December 31, 2023, 2022, and 2021, respectively. The Company did not have an accounts payable balance with these vendors as of December 31, 2023, and December 31, 2022. Certain members of the Company’s Board of Directors also serve as executive officers for customers of the Company’s Enterprise subscription offering. The Company recorded $0.4 million and $0.5 million of revenue during the fiscal years ended December 31, 2023 and 2022, respectively. As of both December 31, 2023 and December 31, 2022, the Company had an accounts receivable balance with these customers of $0.4 million.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Summary of Information Pertaining to Operating Leases

The Company recognized the following amounts related to its operating leases in its consolidated statements of operations and cash flows (in thousands):


	Fiscal Year Ended December 31,
	2023		2022
Operating lease costs	$	6,335	$	6,794
Variable lease costs	$	1,068	$	810
Cash paid for amounts included in the measurement of operating lease liabilities, net of lease incentives	$	7,303	$	6,740

During the fiscal years ended December 31, 2023 and 2022, the Company recognized an immaterial amount for short term lease expense and no sublease income.


	December 31,
	2023		2022
Weighted average remaining term (years)	1.3		2.0
Weighted average discount rate	3.9	%	3.8	%

Summary of Future Minimum Lease Payments

Future minimum lease payments under noncancellable operating leases with initial lease terms in excess of one year as of December 31, 2023, were as follows (in thousands):


2024	$	5,922
2025	809
2026	410
Gross lease payments	7,141
Less imputed interest	(192)
Present value of operating lease liabilities	$	6,949