Thank you for joining Udemy's third quarter fiscal 2021 earnings conference call. At this time, all participants are on listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question at that time, please press star then one on your touchtone telephone. As a reminder, today's conference call is being recorded. I will now return the conference over to your host, Mr. Taylor Giles, to cover the safe harbor. With me today are Gregg Coccari, Udemy's CEO, and Sarah Blanchard, Udemy's CFO. Before we begin, during this call, we may make forward-looking statements within the meaning of federal securities laws. These statements involve assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated. For a complete discussion of risks associated with these forward-looking statements, we encourage you to refer to our SEC filings, including our quarterly report on Form 10-Q for this quarter, which ended September 30, 2021, filed with the SEC on December 8, 2021. Our forward-looking statements are based upon information currently available to us. We caution you not to place undue reliance on forward-looking statements, and we do not undertake and expressly disclaim any duty or obligation to update or alter our forward-looking statements, except as required by applicable law. In addition, during this call, certain financial performance measures may be discussed that differ from comparable measures contained in our financial statements prepared in accordance with U.S. generally accepted accounting principles, referred to by the Securities and Exchange Commission as non-GAAP financial measures. These non-GAAP financial measures assist management and investors in evaluating our performance and comparing period-to-period results of operations in a more meaningful and consistent manner, as discussed in greater detail in the supplemental schedules to our earnings release. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release submitted to the SEC. These reconciliations, together with additional supplemental information, are available at the investor relations section of our website. A replay of today's call will also be posted on the website. During this call, we reference an ESG risk rating developed by Sustainalytics. The use of the ESG risk rating and the information included therein is subject to limitations. For more information, see our earnings press release. I will now turn the call over to Gregg. Thank you, Taylor, and thank you all for joining us on our first call as a public company. It's been an exciting journey so far. We're grateful to our employees and instructors for their incredible commitment to our mission of connecting people everywhere to the knowledge and skills they need to succeed in a rapidly changing world. We're also grateful to Udemy Business customers and learners for trusting us as they upskill and reskill to meet the needs of the modern workplace. Thanks to them all, we had a successful IPO and a strong third quarter. As of the quarter end, Udemy had over 46 million paid and free learners and over 9,500 customers subscribing to our Udemy Business offering. In the third quarter, we grew revenue to $129.6 million, up 9% year-over-year. Udemy Business grew 84% year-over-year, with an ending ARR of $207 million. As expected, the consumer business was down 13% year-over-year due to the extraordinary top-line growth last year during the early waves of the pandemic. Driving Udemy Business's strong year-over-year growth was increasing demand for our content, its quality, its depth, its breadth, its freshness, which is a direct result of our differentiated global knowledge marketplace. It provides both the content and significant leads that fuel our Udemy Business offering, which meet the specific needs of our business users. For Udemy Business customers specifically, we've recently expanded our Udemy Business offering with new language collections in Italian and Russian, as well as immersive learning and cohort-based learning offerings. For those of you who are new to Udemy, I'd love to start with our founder's story because it reflects Udemy's commitment to making education and knowledge accessible and attainable. Eren Bali grew up in a small village in rural Turkey, where he attended a one-room schoolhouse far from any city or university. He had an early interest in math and chess, but no one nearby to mentor him. Then his parents bought the family a used computer and internet access, and everything changed for Eren. Suddenly, he could tap into the world outside his village, and soon he was searching for math problems online and learning from experts in the field. Eventually, he would win a national mathematics competition, move to the U.S., and become a serial entrepreneur. Online learning changed Eren's life, and he founded Udemy so that people everywhere could access the world's knowledge and pursue their dreams. Eren did more than simply launch an online learning platform. By using a marketplace approach that allows experts anywhere to share what they know with learners anywhere, Udemy disrupts the way knowledge is shared and learned across the globe. Our marketplace serves as an ideal platform for the continuous upskilling and reskilling necessary in a changing world. Most training and education solutions, whether online or not, rely on an outdated publisher model. This legacy model hinders the speed of course development, limits the pool of potential instructors and their creativity, and it makes it difficult to localize globally at scale. The publisher model is simply too slow for the kind of rapid continuous content creation necessary today, and it's not built to leverage user feedback to improve content quality in any timely way. By contrast, Udemy's dynamic two-sided marketplace model allows instructors to quickly develop and update content to meet learner demand. Our consumer and business learners provide social proof and feedback at scale through enrollments, ratings, and reviews, which in turn give instructors the information they need to continuously improve their offerings. We also offer instructors comprehensive analytics and insights to help them improve the quality and increase engagement. There's the financial incentive, the potential to earn real income that motivates our instructors to produce the best, most relevant content they can. The efficiencies of the marketplace model have enabled us to build a vast catalog of high-quality courses that provide a comprehensive and immersive learning experience through video and interactive exercises. Learners can communicate directly with instructors through Q&A functionality. Machine learning and AI capabilities in our platform enhance course discoverability by personalizing recommendations for each learner. We offer local content and pricing to meet learners' needs across the globe. Again, we believe our marketplace approach allows us to be more affordable and accessible than other solutions while providing the highest quality, deepest, and broadest catalog of courses to our customers and learners. We estimate our market opportunity in online learning to be over $200 billion. According to the World Economic Forum, in the next six months, around 40% of the workers will require reskilling, and nearly all business leaders report that they expect employees to pick up new skills on the job as digital acceleration continues. To keep up with the pace of innovation, both individuals and companies must continuously upskill and reskill. Udemy offers the ability to learn these skills with 5,000 new courses created each month, a third of which are in languages other than English to serve an increasingly global workplace. In order to maintain our position in the market, we're continually innovating our platform and developing new immersive learning products. We launched Udemy Business Pro, which features labs and assessments in a number of technology verticals. We also acquired a company called CorpU, which specializes in cohort-based leadership training for Fortune 500 companies. In the quarter, we also incorporated new machine learning capabilities to enhance our search functionality and improve conversion and retention within the consumer business. Global distribution continues to be a strategic focus. Earlier in the year, we announced a strategic partnership with Woongjin ThinkBig, one of the largest Korean education companies, to expand Udemy in Korea. We're now also expanding our reach into two massive regions, China via a partnership with Sanjieke, a leading vocational education platform, and Sub-Saharan Africa through a partnership with the MultiChoice Group, the leading media company in the region. Our partnership in China will focus on building our Udemy business presence in the country, thanks to Sanjieke's local sales force and market knowledge. Udemy's expansion to Africa will be accelerated by MultiChoice Group, which will advertise Udemy's courses on television to more than 12 million households in 13 countries. These key strategic partnerships further position Udemy as the global learning destination. Over 30 million unique visitors come to Udemy every month to learn. This is the engine that fuels Udemy Business and enables us to disrupt corporate learning. Let me give you a few concrete examples to demonstrate how Udemy Business customers engage with us. Citi started with 5 licenses in 2018 and has now expanded to 100,000 licenses via a multi-year agreement. We're proud that Udemy is Citi's largest learning content provider and the one with the most digital content consumed by Citi employees. Citi chose Udemy Business to partner for two strategic priorities, personalized learning and building learning into the flow of work. Citi's top courses include everything from technical topics like Python and Agile to power skills like communication and leadership. This quarter, we added new enterprise customers across verticals, including Fortune 500 Alcoa, Fortune 500 Mitsubishi Chemical, Carvana, the leading e-commerce platform for buying and selling used cars, and freenow, Europe's leading multi-mobility platform, which is deploying Udemy Business wall to wall, noting that continuous training is essential. We've also expanded with customers like Citi, Michelin, and Mercado Libre. Let me also give you a quick overview of how learners are using our platform. A former taxi and limo driver in New York came to Udemy to learn SQL after dabbling with other online education offerings that never worked for him. Now, after completing courses in SQL certification and SQL for data science from top Udemy instructor Imtiaz Ahmad, he recently accepted a full-time technical position at a large multinational bank headquartered in New York City. Another learner signed up for Udemy courses through The Last Mile while serving a prison sentence at San Quentin. As part of our ESG program, Udemy supports this nonprofit, which was established to help currently or formerly incarcerated people train for jobs in technology. This individual now teaches others from his community how to code and use the skills he learned on Udemy to secure a role as a software engineer at a leading Silicon Valley communications platform. We're also extremely engaged with our instructors who drive the quality and breadth of our content and enable us to provide new content in real time. In 2020, we paid our instructors $161 million, and our top instructors are making over $1 million in annual revenue. We look at this investment in our instructors as crucial to our differentiation. Our instructors are amazing. Kyle Pew, a Microsoft Certified Trainer and instructor at Udemy, reached 1 million students on the platform in September. Kyle posted his first course on Udemy in 2015 and has turned teaching from a side hustle into a full-time job. He even hired a team to assist with maintaining his 20+ courses and keeping up with the learner Q&A. Lindsay Marsh, a graphic design instructor on Udemy, hit $1 million in revenue after 4 years on the platform. Lindsay recently shared that creating and filming courses is now her full-time job. She credits Udemy for providing the platform and marketing resources to help her reach thousands of learners around the world. These are just a few of the over 60,000 instructors that make Udemy Marketplace so special. As a global learning platform, we see a huge opportunity to serve learners in economies where access to continuous learning is problematic or too expensive. Through our free offering, we've provided learning to millions of people around the world. We're committed to inclusion and diversity, both in our own workplace and in the learners we serve, and take pride in having been ranked by Sustainalytics in the first percentile for ESG risk ratings in the internet software and services sub-industry as of July 2021 due to our exacting standards and our commitment to enabling access to education for everyone. Overall, we're extremely proud of our success carrying out our mission of connecting people everywhere with the knowledge and skills they need to succeed. With that, I'll turn the call over to Sarah. Thank you, Gregg. We're very pleased with the results in the quarter, particularly with the growth in Udemy Business, which we expect to continue to grow as a percentage of revenue over time with strong unit economics. Before I lay out the quarter, let me briefly explain our revenue model. Our revenue comes from paid consumer learners and Udemy Business customers. As online learning has become more mainstream and organizations have realized its benefits, we have experienced rapid adoption of our solutions, and our revenue mix has been shifting toward Udemy Business. Consumer revenue was 61% of our revenue versus 77% a year ago, while Udemy Business revenue has increased from 23% a year ago to representing 39% of our revenue. Today, consumer revenue mainly consists of individual course purchases made by individual learners. We are also starting to generate revenue from our consumer subscriptions, which were initially launched in Q2. Udemy Business revenue primarily relates to Udemy Business subscription contracts with annual or multiyear subscription terms. Udemy Business subscriptions are generally billed in advance on an annual basis. Before I jump into the numbers, it's important to mention that the majority of our consumer revenue is recognized ratably over four months following the course purchase, whereas the majority of our consumer content costs are recognized in the same month as the course is purchased in line with net billings. As a result of this disconnect in timing between consumer revenue and content costs, we typically see lower consumer gross margin in quarters with high consumer net billings. This is then followed by a quarter with higher consumer gross margin when that deferred revenue is being recognized with no associated content costs. With that said, third quarter revenue of $129.6 million was up 9% year-over-year, driven by extremely strong growth in our Udemy Business segment. At the same time, our consumer business faced an extraordinary comparison given accelerated top-line growth during the early waves of the pandemic last year. We continue to see growth outside North America outpacing North American growth, delivering over 60% of our revenue from international customers and learners. For the remainder of this discussion, all financial metrics are non-GAAP unless explicitly stated otherwise. Gross profit was $72.2 million, up 4% versus the third quarter of 2020, driven by the strong results in the Udemy Business. Gross margin was 55.7% of revenue, approximately 300 basis points lower versus the prior year due to the timing of revenue recognition in the third quarter of 2020 from the COVID peak buying that happened in the second quarter of that year. Again, the instructor costs associated with the COVID peak were incurred in Q2 2020, while a significant portion of that revenue was recorded in Q3 2020, creating an unusual spike in gross margin in the third quarter last year. Our cost of revenue consists primarily of content costs, which are payments to our instructors. Content costs depend upon how we acquire each learner. For consumer courses, instructors earn a specific percentage of the net billing amount when a learner purchases the instructor's course. For courses offered through Udemy Business or a consumer subscription offering, instructors earn a pro rata share based on consumption of instructor costs generated by those subscription offerings. We expect content costs as a percentage of revenue to decrease over time as Udemy Business and consumer subscriptions become a larger portion of overall revenue. Turning to OpEx, total operating expense was $74.2 million or 57.2% of revenue, compared to 54.2% in Q3 last year. Sales and marketing expense represented 38.6% of total revenue, compared to 38.4% in Q3 of 2020. Research and development expense was 11.9% of revenue versus 9.5% in the year ago period as we continue to increase investments in immersive learning, consumer subscriptions, and to further improve our personalization and machine learning capabilities. General and administrative expense was 6.8% of revenue versus 6.3% a year ago as we ramped for public company readiness. Net loss in the quarter was $1.7 million or 1.3% of revenue. Adjusted EBITDA was $1.6 million or 1.2% of revenue. With our huge market opportunity, we're focused on prudent investment in driving top-line growth and expect that we will continue to incur short-term losses while incrementally gaining leverage for longer-term profitability. Free cash flow was -$8.5 million versus -$26.6 million a year ago. Moving on to the balance sheet, we ended the quarter with $130.2 million of unrestricted cash equivalents, and marketable securities. Now let me discuss our Consumer and Udemy Business segments individually. Consumer revenue was $79.2 million, down 13% versus a year ago. The third quarter of 2020 was exceptionally strong, driven by COVID-related buying in Q2 2020, so we expected to see a tough comp this quarter. In the quarter, we had approximately 1.3 million monthly active buyers, which was down 6% year-over-year. Consumer gross profit was $42 million or 53% of consumer revenue. As Gregg mentioned, consumer is an important top of the funnel source for Udemy Business. During the quarter, we added 2.4 million new consumer and business learners, bringing our total base to 46.5 million. Udemy Business continued to deliver exceptional growth in Q3, with revenue of $50.4 million, up 84% year-over-year, driven by strength in new logos as well as expansion within existing customers. We exited the quarter with over 9,500 Udemy Business customers, up 42% year-over-year. Udemy Business net dollar retention rate was 118%, and ending ARR of $207.4 million was up 80% as compared to the prior year. Going forward, we expect to continue to see strong growth in new customers and revenue from Udemy Business. Udemy Business gross profit was $32.9 million or 65.4% of Udemy Business revenue. Gross margin was down slightly year-over-year as we increased our investment in customer success to help support our land and expand strategy. I'd like to share some thoughts on what is ahead of us and the business over the long term. There is a massive opportunity to support organizations and individuals as the world moves towards a skills-based economy. Our marketplace, with its dynamic ability to create new, high-quality content, is uniquely positioned to keep pace with accelerating change and the global need for upskilling and reskilling in a way others cannot. We intend to invest thoughtfully with a focus on driving growth while investing in areas that will improve unit economics, balancing securing our leadership position in global, affordable, and accessible learning with driving long-term improvement in the EBITDA margins. We will continue to invest in immersive and hands-on learning capabilities, as well as furthering our ability to support cohort-based learning and communities. We're just getting started in consumer subscriptions, which will support learners at different stages in their ongoing learning journey. Investing in deepening our competitive moats and continuing to expand our international presence will benefit all of our constituents while we work to create operating leverage and improve EBITDA margins over time. Looking to the fourth quarter, we expect revenue between $130 million and $134 million, with consumer delivering similar absolute revenue as last year as we work through the 2020 COVID dynamics while Udemy Business continues to show very strong double-digit growth. We expect an adjusted EBITDA loss between $28.5 million and $24.5 million or an adjusted EBITDA margin of -22% to -18.3%. With that, operator, please open the call for questions. Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star, then one on your touchtone telephone. Again, to ask a question, please press star, then one. Our first question comes from Sterling Auty of JPMorgan. Your line is open. Yeah, thanks. Hi, guys. On the consumer business, you had mentioned that you're starting to see a little bit of traction in the consumer subscription. Any more detail that you can give to that element in terms of, you know, where either geographically or what you're doing to kind of support the adoption on the subscription side? Hi, Sterling. Thank you for the question. It's very much early days in our consumer subscription journey. We're really focused still on testing and learning, and we're doing it in about five countries right now. It's a very small percentage of our traffic, you know, that we're just in the testing and learning phase. Then once we find the sweet spot of where we want to be, we will ramp it up. We're not there yet. Understood. One follow-up on the business side. You know, looking at the success that you are having in new customer adoption, if you could just kind of talk to us around the ramp of some of your sales resources and effectiveness in the major regions of the world. Yeah. We're continuing to build out our go-to-market team. Our go-to-market team today is about 400 people. We're continuing to ramp it up, but there's still a lot of new people because we're continuing to hire. We're building it out across the globe. We started in North America, then we went to EMEA, then we went to APAC, and we're building out all those areas, but then we just started building out Latin America. We still have a lot of people ramping up. While we're seeing with the established salespeople, we see very good trends, but there's also a lot of new ones coming in as we continue our global expansion. Understood. Thank you. Thank you. Our next question comes from Josh Baer, Morgan Stanley. Your line is open. Great. Thanks for the question, and congrats on the first quarter. Question for Gregg. With pressures on enrollment in higher ed that we've been hearing about this semester, the one thesis is that individuals are choosing higher wages in the workforce over school. With that in mind, I'm just wondering if you're picking up any increase in demand on the consumer side related to individuals looking for skills for the workplace. Yes, we're seeing those same trends in enrollments, in college enrollments in the U.S. specifically, that they're down. We actually think that for us is a headwind. You know, that's a headwind for schools, excuse me, but a tailwind for us. You know, we are in the skills-based economy. We're helping people upskill and reskill and get that first job. This is something that's actually a good trend for us. Great, that makes sense. For Sarah, with your excellent international presence, I was just hoping you could provide some context or an overview for foreign currency exposure, if there's a hedging program or if there's its impact in the quarter. Any context for what constant currency growth was in 2020 or this quarter would be great. Thank you very much. Yeah, great question. So you know, the biggest piece of cost for us is our content costs, and that is a natural hedge for us. We don't have a ton of other exposure from an ex-FX perspective. Obviously, currency, you know, gains and losses and constant currency, there's different countries going different ways from an FX perspective, but we have that natural hedge built into our business. Okay. Thank you. It's impacting the top line and as well as. That's right. It impacts the top line and the bottom line together. Okay. The top line and then the cost. Yep. Okay. Thank you. Our next question comes from Terry Tillman of Truist Securities. Your line is open. Yeah, thanks for taking my questions, and congrats as well from me, Gregg and Sarah, on the IPO, the successful IPO. I just had two questions. You know, one is, you know, given the timing of your IPO, and then we launched coverage and just kind of, you know, you've got well over a month of the fourth quarter under your belt. I'm curious on the consumer side. I do think, if I'm not mistaken, you do some promotions in that Cyber Week, which is pretty important. Anything you can share at all in terms of just consumer engagement, maybe over that Black Friday or Cyber Monday or just, you know, what you've seen so far quarter to date around kind of seasonal buying, and then I had a follow-up. Yeah, thank you. This the fourth quarter is one of our big quarters. In the consumer business, the fourth quarter and the first quarter of next year are our two big quarters. We came in and we saw Black Friday, and we do a lot of promotions and a lot of marketing, and we're very happy with what we saw. I mean, our traffic is holding up. I mean, the early indicators for us is our traffic, and our traffic has been consistently over 30 million unique visitors, and it's up over 50% year-over-year versus 2019. Our traffic is holding up and we're seeing good trends. Even though Black Friday overall for the consumers was off a little bit, we had a very solid performance. That's great to hear, Gregg. Then my follow-up for either you or Sarah is just on the Udemy Business side. What I'm curious about is some of the initiatives you have to just further strengthen engagement and just drive better outcomes for the business customers like immersive learning. UB Pro. You know, what are you seeing from some of those initiatives? Could they have potentially a positive development on the dollar-based net revenue retention? Thank you. Yeah, thanks for the question. You know, we're in the early stages of what we're building out for immersive learning, and the response from customers is very positive. I think it will help not just on net dollar retention because I think having more products to sell into our customer base will obviously help on net dollar retention, but also in just new logos. There's a lot of excitement about hands-on and community workspaces assessments. You know, we're very excited to continue the progress there. Thank you. Thank you. Our next question comes from Oliver Bayer. The line is open. Great. Good evening. Can you guys hear me okay? Yes. Yes. Okay, great. Thank you, thanks. My first question, Gregg, is for you on the Udemy Business side, obviously very strong, and it seems like a nice expansion with Citi, which was already a pretty large deployment. Just curious what you're seeing there in terms of the mix and type of lands that you're seeing with UB, whether it's mostly large enterprise, whether it's commercial. And then if you can just remind us, I know you guys just called out the seasonality on the consumer side of the business, which makes perfect sense with Q4 and Q1. Is there also that, you know, a similar seasonality with the enterprise buying that we can expect in Q4 on the UB side of the business? And then I had a quick follow-up for you, Sarah. Yes, there's a seasonality in Udemy Business side, and it's fourth quarter. December is always our biggest month for landing. As far as the type of accounts that we're seeing, it's very broad-based. We're seeing small, we're seeing medium, we're seeing enterprise. We're seeing everything. We have a land and expand strategy. As we've talked about before, we're only in about 10% of the seats in our current customers, so we have the ability to expand for many years. The market is very good. You know, the HR people are investing in retention skills and are investing in reskilling and upskilling. The market's particularly good. Thanks, Gregg. Appreciate it. Sarah, it. Maybe it's a little early to call this out, and maybe it's next fiscal year, but when you guys have been just painting the tape with partnerships and global partnerships and deals. Just wondering, you know, just for example, on MultiChoice, Gregg talked about, you know, the advertising element there. Are there any economics that we should bear in mind as these partnerships start to ramp, any economic implications, whether it be rev share or impact on margins, or is it just too early to discuss that? Thank you guys very much. Sure. Some of them too early. Some of the partnerships that are more similar to our existing partnership in Japan, they're structured very similarly, so you shouldn't see a difference from an economic perspective. Okay. Thanks again, guys. Thank you. Our next question comes from Stephen Sheldon of William Blair. Your line is open. Hey, good afternoon, and thanks for taking my questions. First question, I just wanna ask about the fourth quarter guidance. Looks like at least relative to my model, revenue's coming in a little better than expected, but spending is also a little elevated, at least relative to what we'd modeled. I guess, are you making any incremental growth investments relative to what you would have previously expected? Is there anything related to the continued success with fourth quarter promotional activity, you know, given that there's some revenue and expense timing mismatch where some of that expense or all that expense would hit Q4, but the revenue would be spread out over into early 2022? Yeah, great. Thanks for the question. So there's a few initiatives that we have increased expenses on. The first is top of the funnel and doing some TV advertising, really building out our brand internationally and in the U.S. We've experienced an increase in cost associated with being a public company. But mostly we really are investing in the global go-to-market team, and the immersive learning, so increasing investments on the sales and marketing side and on the R&D side to build out some of these capabilities. Okay, got it. You have really strong growth, I guess, on the business side with new customers and it seems like some sizable customers too. Curious if you're seeing any changes in the breadth of initial deployments across the employee bases with these new customers. I think you'd mentioned, Gregg, you're only covering about 10% of total employees, so clearly a lot of upselling opportunities. Are you at least starting to see bigger initial wins that cover a bigger percentage of the employee base than you've seen historically? Would love any color on that. Yeah. The initial sales are getting bigger and bigger over time. In fact, we had our first million-dollar plus land, so we've never done that before. We've built million-dollar customers, but we've never landed one, and we did in this quarter. We are seeing that over time, you know, get bigger and bigger. Great. Thank you. Thank you. Our next question comes from Nat Schindler of Bank of America. Your line is open. Great. Thank you. Just actually to follow up on that last question and actually see if you can go into more detail. Can you walk us through the basic sales cycle that you have had with large enterprises on your business side? How long it takes to land and then what the process is to expand within, and what's typical. Yeah. On the sales cycle, enterprise can be 3-9 months. We have some that have taken 2 years. It can be very large. But typically I think 9 months would be a good average. And as far as the expansion, again, it's all different. But we have a sales and customer success team that work together with executives in the company to understand what outcomes that they're trying to drive. And we work with them to drive those outcomes. We use playbooks and help them achieve whatever their goals are. And then the expansion, you know, works over time. Do they start with particular groups within the organization and expand out from there? Or do they just look for how do most organizations look at using your service on the business? Yeah. We come in from usually either one of two sides. You know, we come in from the technology side, and that's where we started when we were smaller. Now we're coming in more in probably 50/50 in the technology side and the HR side. You know, we'll go in any way that we can get in. It tends to be both that way. I think one of the trends that we're seeing that is a benefit to us is, you know, the HR and the learning budgets are increasing as employers are thinking about retaining their employees, upskilling, reskilling, all the needs of sort of being an employer today. We have seen that trend, as Gregg said, shift more and more towards HR. At the same time, those budgets are becoming larger and larger as teams are focused on how do we retain our employees. Are they keeping up with the digital transformation and the accelerated pace of change. You know, it's difficult to hire the skills they want right now, so it's really about upskilling and reskilling their teams to the extent possible. Finally, can you talk just a little bit on how you competitively are situated against other guys who are coming in in the online learning space? Are they, for example, Coursera? Are the businesses who are using you seeing you as a replacement or they're similar offerings, or are they using you for different things? That's a good question. I mean, it's almost everything you can think of. The bigger the enterprise, they tend to have more than one different content provider. So we'll sit alongside our competitors or we'll replace. We'll do all those things. So it just depends by customer. You know, the competitors in our enterprise business are Skillsoft, LinkedIn Learning, Pluralsight, and Coursera. You know, so those are the big ones. You know, we have advantages, though, that we believe in. We have a marketplace. Our marketplace is an advantage. We're much more global. We can develop content much faster than everybody else can. But again, people have different strengths and weaknesses, and we will sit alongside them. Great. Thank you. Thank you. Our next question comes from Jason Celino of KeyBanc Capital. Your line is open. Great. Thanks, Gregg. Thanks, Sarah, for taking my questions. Maybe my first one, I think at the beginning you mentioned the new AI engine to improve conversion on the consumer side. Maybe can we talk about some of these initiatives? Has this engine already been, you know, implemented? Thanks. Yes. Thank you. Thank you for the question. You know, we use AI and machine learning in a number of different places on our platform. We've built a pricing engine that allows us to price individual courses per country. We use it for matching. We use it for recommendations. We use it to acquire learners. We use it for skills tagging and assessments. Yes, we are using it in all those places. It's constantly being tested. You're constantly upgrading the algorithms and testing there. We're getting wins there all the time, especially in the search and recommendations area. Perfect. You mentioned some new language collections in Italian, Russian and, you know, expansion into Korea and Sub-Saharan Africa. You know, how do you decide which countries or languages that you wanna focus into next? What levers, you know, do you have in, you know, building content in these areas? Yes. It just really depends on what we're hearing from our enterprises, the languages that they're looking for. The beginning ones are obvious. We're getting into some that are less obvious, but it's the markets that we wanna build. For Korea, for example, we're building out our Korean collection right now. We did a deal with a partner, Woongjin ThinkBig, and the two of us are working together to build our Korean collection for Udemy Business and for our consumer side. We're building out our collections in a number of different places in the world, and we're just going from one country to the next. Perfect. Thank you. Thank you. Our next question comes from Ryan MacDonald, Needham. Your line is open. Hi, Gregg and Sarah. Thanks for taking my questions, and congrats on a nice quarter. I wanted to first start with the CorpU acquisition. Just to understand sort of how that's going to be integrated in the platform and what the go-to-market is gonna look like there. As we think about the fourth quarter guide, what should we be assuming in terms of contribution from CorpU? Thanks. We purchased CorpU a few months ago. The business is leadership training from top universities. We have faculty and top professors from Harvard, MIT, Wharton, and Stanford that are teaching leadership courses. It's our first foray into cohort-based learning, and our plan is to start with leadership but then work across Udemy Business into other verticals to cohort-based learning, and then eventually take cohort-based and bring it onto our consumer marketplace. From a Q4 perspective, you know, the CorpU acquisition was really about the technology, the capabilities, and the skill set that team had. We don't anticipate it having a huge impact on the fourth quarter. We are integrating that into our go-to-market team, and so it'll be sold alongside Udemy Business and Udemy Business Pro, but it'll take some time for that to get into the pipeline. Excellent. Thanks for the color on that. When we think about this partnership model as you continue the international expansion, are these partnerships exclusive, in each country or are there opportunities to, multi-source some of those partnerships? Thanks. They are exclusive. We just did a partnership in Korea, in China, and in Sub-Saharan Africa with MultiChoice Group, and those are all specific to those countries. They're unique. Thank you. Our next question comes from Brent Thill of Jefferies. Your line is open. Hi, guys. This is David on for Brent. Thanks for taking the questions, and congrats on the IPO. Two if I may. The first one, can you maybe talk a little bit about your strategy to go after instructors, I guess specifically some of the top instructors, and, you know, how are you acquiring instructors? Is there any sort of, you know, secret sauce that you guys are doing? At this point, because of our scale of our marketplace and that we spent $161 million last year in instructor payments, the instructors tend to come to us. We get the top instructors because we monetize better than any other place that they can. We don't have to spend a lot of time doing that. We did in the early phases of our business to build our marketplace in the beginning. We don't have to spend as much time. Now, when we go into a new country, we do. When we go into a new country and we wanna build take the local content, which we're doing in a place like Indonesia right now, we put somebody into the marketplace, and we have them work with local instructors to, you know, to bring the content online. It really is more starting the flywheel. Once we get the first 500-1,000 customer instructors using a local language, then the flywheel takes off, and then we don't have to get involved. You know, for example, we have 12,000 Portuguese courses today. We have not had to get involved in that in many, many years. Got it. Thanks for the color. A follow-up on the consumer business. Obviously, you know, tough comps against last year, but going forward, how should we be thinking about the growth rate for this business over the next few years? You know, is growth gonna be driven by, you know, new customers or, you know, increasing monetization of existing customers? Thanks. Yeah, you know, I think a few things on the consumer business. The first is, you know, COVID really accelerated trends that we were already seeing, and we really, we got two years of growth in 2020. Q3 2020 was our biggest quarter as we were recognizing revenue from the peak buy that happened in Q2 2020. You know, while we're working through some tough year-over-year comps, it really feels like things are stabilizing. The pandemic isn't over and, you know, no one can really see perfectly into the future here, but our business is significantly bigger than pre-pandemic. Our traffic, you know, is significantly higher. When we think about where the growth is as we're getting back to growth, there's a few levers. There's obviously an enormous TAM, and at the levels we're at, we are just scratching the surface of the consumer markets and the learning that is gonna happen. We've recently launched in Q2 our consumer subscription business, and that is not only going to increase the LTV of the consumers themselves, but it's actually gonna open up new consumers that we can bring onto our platform. You know, I think while we're, you know, still working through what is hopefully the tail end of pandemic behavior and, you know, getting back to some modest growth in the near term, the bigger levers are out in the future with the subscriptions and building that out, as well as immersive learning capabilities, which we're launching initially in Udemy Business with Udemy Business Pro, but then we'll be porting that over to our consumer side as well. Great. Thanks, guys. Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Gregg Coccari for any closing remarks. I wanna thank you for your questions and your interest in Udemy. Over the last 11 years, we've built a global platform to meet the needs of learners, instructors, and organizations everywhere. Our mission is to democratize learning, and the affordability, accessibility, and high quality of our content make that possible. The Udemy marketplace is disrupting corporate learning as we're able to keep pace with the ever-changing needs of companies in upskilling and reskilling their employees. Whether we're talking about teams of corporate learners or an instructor recording their first course on Udemy, we're creating new possibilities for people everywhere, every day. Thank you.