Stockholders' equity

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

Stockholders' equity

11. Stockholders' equity

Preferred stock— Under its amended and restated certificate of incorporation, the Company is authorized to issue 50,000,000 shares of undesignated preferred stock with a par value of $0.00001 per share with rights and preferences, including voting rights, as designated from time to time by the Company’s board of directors. As of September 30, 2025 and December 31, 2024, there were zero shares of preferred stock issued and outstanding.

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

	September 30,	December 31,
	2025	2024
2010 Equity Incentive Plan:
Stock options outstanding	957,359	1,401,086
2021 Equity Incentive Plan:
RSUs outstanding and PSUs(1)	18,926,577	15,809,202
Shares available for future issuance under:
2021 Equity Incentive Plan	11,952,297	10,514,374
2021 Employee Stock Purchase Plan	4,033,734	2,986,132
Total shares of common stock reserved	35,869,967	30,710,794
(1) For those PSUs in their respective performance periods, the number of shares reserved for issuance is based on the maximum achievement of the corporate performance metrics.

Share repurchase programs— In September 2025, the Company’s board of directors approved a share repurchase program (the “Repurchase Program”) with authorization to purchase up to $50 million in shares of the Company’s 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 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.

Shares repurchased by the Company are accounted for on the settlement date. Upon settlement, repurchased shares are immediately retired and no longer considered issued or outstanding. The total cost to repurchase shares includes any direct costs incurred, including broker commissions and excise taxes, and is recorded as a reduction to additional paid in capital in the condensed consolidated balance sheets. During three months ended September 30, 2025, the Company repurchased 4,098,191 shares for an aggregate total of $28.3 million, inclusive of direct costs incurred.

During the fiscal year ended December 31, 2024, the Company’s board of directors approved a share repurchase program, which authorized the purchase of up to $150 million of Udemy 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 share repurchase program was completed in November 2024.

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”), stock appreciation rights (“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, 2025, the shares available for future grants under the 2021 Plan automatically increased by 7,374,214 pursuant to the above evergreen provision of the 2021 Plan.

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 is typically between two to four years.

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 based upon achievement of the corporate performance metrics at the end of the performance period. During the performance period, Management estimates the number of PSUs that are expected to vest based on the anticipated achievement. 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. Total stock-based compensation expense to be recognized may fluctuate during the performance period due to changes in forecasted achievement.

During the third quarter of 2025, the Company granted 553,125 PSUs at target to certain executives, with payout achievement ranging from 0% to 150% of target. One third of the eligible PSUs vest upon certification of the corporate performance metrics by the board of directors’ compensation committee in the third quarter of 2026, and the remaining two thirds will vest equally over the following 6 quarters, subject to continual service by the grantee. Achievement has been considered probable since the grant date, and, as of September 30, 2025, the Company estimated a payout rate of 100% of target based on forecasted achievement.

During the first quarter of 2025, the Company granted 372,044 PSUs at target to certain executives, with payout achievement ranging from 0% to 150% of target. One third of the eligible PSUs vest upon certification of the corporate performance metrics by the board of directors’ compensation committee in the first quarter of 2026, and the remaining two thirds will vest equally over the following 8 quarters, subject to continual service by the grantee. Achievement has been considered probable since the grant date, and, as of September 30, 2025, the Company estimated a payout rate of 60% of target based on forecasted achievement.

During the first quarter of 2024, the Company granted 553,568 PSUs at target to certain executives, with payout achievement ranging from 0% to 150% of target. In February 2025, the board of directors’ compensation committee certified actual achievement against target of 45%. As a result, 218,565 shares were awarded to the grantees, of which one quarter vested in the quarter of certification, while the remaining 75% will vest equally over the following 12 quarters, subject to continual service by the grantee. The difference in the number of shares granted at target and the shares certified by the Board based on actual achievement were canceled and returned to the pool of available for future issuance under the 2021 Plan.

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

	RSUs Outstanding	Weighted Average Grant Date Fair Value		PSUs Outstanding (1)	Weighted Average Grant Date Fair Value
Balance - December 31, 2024	14,892,768	$	10.74	673,578	$	10.40
Granted	9,750,922	7.03		925,169	7.37
Released	(4,866,827)	11.63		(138,812)	10.06
Canceled	(2,464,351)	10.47		(308,426)	10.89
Balance - September 30, 2025	17,312,512	$	8.44	1,151,509	$	7.87
Unvested - September 30, 2025	17,227,452	$	8.44	1,151,509	$	7.87
Awards vested, not yet released - September 30, 2025	85,060	$	8.54	—	$	—
(1) Canceled PSU shares consist of awards forfeited as well as the difference in the number of shares granted at target and the shares certified by the Board based on actual achievement.

As of September 30, 2025, total unrecognized stock-based compensation expense related to unvested RSUs was $128.2 million, which will be recognized over a weighted average period of 2.4 years.

As of September 30, 2025, total unrecognized stock-based compensation expense related to unvested PSUs was $4.8 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, 2024	1,351,086	$	5.28	4.05	$	4,666
Granted	—	—
Exercised	(353,118)	3.57
Canceled	(90,609)	6.50
Balance - September 30, 2025	907,359	$	5.82	3.91	$	1,855
Vested & exercisable as of September 30, 2025	907,359	$	5.82	3.91	$	1,855

As of September 30, 2025, there was no unrecognized stock-based compensation for stock options with service-based vesting conditions, as all such awards were fully vested.

Performance-based stock options— Other than those described below, there have been no other changes to the Company’s performance-based stock options compared to those described in Note 11— Stockholders’ equity, included in Part II, Item 8 of the Company’s Annual Report.

As of September 30, 2025, there were 50,000 performance-based stock options outstanding, of which 47,916 were exercisable. As of September 30, 2025, total unrecognized stock-based compensation expense related to unvested performance-based stock 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, 2025, the shares available for future grants under the ESPP automatically increased by 1,474,842 pursuant to the above evergreen provision of the 2021 ESPP.

During the nine months ended September 30, 2025, 430,926 shares of common stock were issued under the ESPP.

On May 20, 2025, the Company’s ESPP purchase price was reset for the November 2024 offering period. Under the reset provision, if the closing stock price on the purchase date falls below the closing stock price on the offering date of an ongoing offering period, the ongoing offering period terminates immediately following the purchase of ESPP shares on the purchase date. Participants in the terminated offering period are then automatically enrolled in the new offering period. The ESPP reset resulted in incremental compensation cost of $1.7 million for the reset participants. This amount, along with the unrecognized expense remaining from the original grant date fair value, will be recognized on a straight-line basis over the new offering period ending in May 2027.

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

	Nine Months Ended
	September 30, 2025		September 30, 2024
Risk-free interest rate	4.1	%	5.1	%
Expected volatility	57.9	%	51.9	%
Expected life (in years)	1.3		1.3
Expected dividend yield	—		—

As of September 30, 2025, total unrecognized compensation cost for the ESPP was $4.2 million, which will be recognized over a weighted average period of 1.6 years.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Cost of revenue	$	1,806	$	1,807	$	5,160	$	5,277
Sales and marketing	6,038		7,573		17,053		22,578
Research and development	5,025		7,183		14,653		21,187
General and administrative	5,425		6,839		16,815		21,382
Restructuring charges	—		(160)		—		(160)
Total stock-based compensation expense	$	18,294	$	23,242	$	53,681	$	70,264

The Company capitalized $1.6 million and $2.3 million of stock-based compensation expense as capitalized software during the three months ended September 30, 2025 and 2024, respectively, and $4.8 million and $6.8 million during the nine months ended September 30, 2025 and 2024, respectively.