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