Even though Coursera added ~7 million learners in Q1 2024, the company’s stock plummeted by 15%, hitting an all-time low and resulting in a market cap of $1.61 billion.

At the beginning of February, when Coursera announced their 2023 Full Year and Q4 results, they projected a strong 2024, with initial full-year guidance calling for 21–25% revenue expansion to $730–740 million.

However, this week, Coursera revised their 2024 projection while announcing Q1 results, lowering the expected revenue to $695–705 million.

Coursera’s B2B business, which was showing signs of slowing down, shrunk from $58.3 million to $57.5 million in 2023. Additionally, Coursera’s leadership “transitioned” their Chief Revenue Officer (CRO) and Chief Operating Officer (COO).

Coursera’s Generative AI Bet

Coursera is betting heavily on Generative AI to power its growth. In its earnings call, Generative AI was mentioned numerous times. According to Coursera CEO Jeff Maggioncalda, the company has already launched 75 new courses and projects focused on generative AI just this year.

The company attributed lower revenue in the first quarter of 2024 to the “delay of key content.” This likely refers to the Google AI Essentials Professional Certificate, which was launched a few days ago and is now prominently featured on Coursera’s homepage.

In my analysis of Coursera’s 2023 annual report, I highlighted the company’s heavy reliance on its top 5 content and credentialing partners, which generated a staggering 32% of the company’s total revenue, translating to over $200 million annually.

Google, being Coursera’s biggest partner, likely contributes around $100 million per year, which is a significant factor in Coursera’s shift toward industry-led content.

Another factor that was attributed to the slowing down of Consumer revenue is the lower conversion rate from free to paid courses in North America.

Coursera Coach (still in Beta), Coursera’s AI chatbot, also got a mention in the earnings call. Previously, it was limited to a portion of learners, but now Coursera has “broadened access”. 

Leadership Shakeup

The combination of these factors led to a reorganization of Coursera’s leadership. In CEO Jeff Maggioncalda’s own words,

“In 2022, we implemented a new organizational structure, including roles for a Chief Revenue Officer and Chief Operating Officer; that has not delivered the growth that we need in our large but early markets.

After careful consideration, I’ve decided to flatten our leadership team structure, elevating our three segment General Managers and creating Chief Technology Officer and Chief Product Officer roles that will all report directly to me. This change is designed to enable our next chapter of growth, innovation and leverage, all in support of our long-term strategy.”