The following section discusses financial condition and results of operations of Coursera, Inc. and its subsidiaries (“Coursera,” the “Company,” “we,” “us,” or “our”) and should be read in conjunction with our Condensed Consolidated Financial Statements (Unaudited) and the related notes included in Item 1 of Part I of this report and together with our Consolidated Financial Statements and the related notes and the discussions under the heading “Management’s Discussions and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2025 included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 23, 2026 (“Form 10-K”). This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this report other than statements of historical fact, including statements identified by words such as “accelerate,” “anticipate,” “believe,” “can,” “continue,” “could,” “demand,” “design,” “estimate,” “expand,” “expect,” “forecast,” “intend,” “may,” “might,” “mission,” “need,” “objective,” “ongoing,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these terms, or similar expressions, are forward-looking statements. Forward-looking statements include, but are not limited to, statements about: •trends and expectations for growth in the global learning ecosystem; •our ability to integrate with and realize, if at all, the expected benefits of our Merger with Udemy; •the acceptance, adoption, and growth of online learning and credentialing; •market acceptance and demand for our platforms and offerings; •the potential benefits of our solutions to learners and content creators; •anticipated launch dates of new content creator programs; •our business model; •our expectations of our future financial performance, including revenue, expenses, and profitability; •our ability to develop industry micro-credentials and accredited degree programs; •our ability to successfully develop, launch, maintain, expand, integrate, and scale new programs, offerings, and features, including artificial intelligence (“AI”) technologies; •our ability to manage ethical, transparency, and trust considerations associated with our AI technologies; •our ability to continue providing learners with the necessary skills for career development; •our ability to deliver tools that content creators can use to align with evolving workforce needs; •our ability to expand our platform’s content and credentialing programs; •our ability to source new content creators and expand program offerings with existing content creators; •our ability to establish, maintain, and expand our content creator relationships, strategic partnerships, and collaborations; •our ability to navigate changes in content creator financial terms, including potential disruptions to partnerships and offerings; •our ability to manage or sustain our growth and to effectively expand our global customer base and operations; •our ability to drive adoption of our platforms among Enterprise customers; •our ability to acquire prospective learners and to affect or increase learner enrollment, revenue, and retention; •our growth strategies, plans, objectives, and goals; •our ability to successfully expand our international operations; •our ability to adapt to changing geopolitical dynamics and economic environments; •our ability to react to changes in government procurement, funding, spending or staffing policies, budget priorities or agency organization and resulting effects on customers, content development, platform use and revenue; 27 Table of Contents •our ability to compete and expectations about the future competitive landscape; •our ability to attract and retain key employees; •the scalability of our platforms and operations; •our ability to develop and protect our brands; •the size of our addressable markets, market share, and market trends; •the affordability and convenience of our platforms; •our ability to maintain an effective pricing structure; •our ability to obtain, maintain, protect, and enforce our intellectual property (“IP”) and proprietary rights and successfully defend against claims of infringement, misappropriation, or other violations of third-party IP; •our ability to address cybersecurity attacks, security breaches and other security incidents, unauthorized access to or disclosure of personal, confidential or sensitive information; and resulting platform disruption, regulatory, litigation, remediation-cost and reputational effects; •our anticipated future capital requirements, including the availability of capital to grow our business; •our ability to fulfill repurchases under our share repurchase program and the effects of repurchases on our stock price, cash reserves, and long-term stockholder value; •our ability to successfully defend, settle, or otherwise resolve any current or future legal proceedings; •our ability to implement and maintain effective policies, procedures, and internal controls; •our ability to comply with potential changes in laws and regulations applicable to us or our content creators; •our expense reduction initiatives and their anticipated timing and impact; •our expectations regarding the sufficiency of our cash and financial resources to fund our operations over time; •our contractual obligations and commitments; •the anticipated utility of our non-GAAP financial measures and key business metrics; and •our expectations as to interest rate and foreign currency risks. In addition, any statements contained herein that are not statements of historical facts are deemed to be forward-looking statements. These forward-looking statements reflect our management’s beliefs and views with respect to future events, are based on estimates and assumptions as of the date of this report, and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those expressed or implied by our forward-looking statements. These risks and uncertainties include, but are not limited to, those risks discussed in Part II, Item 1A “Risk Factors” of this report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We qualify all of the forward-looking statements in this report with these cautionary statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, events, or circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law. Overview Coursera operates global online learning platforms that connect an ecosystem of learners, content creators, organizations, and institutions. The platforms offer high-quality educational content, credentials, and learning tools to support skills development, career advancement, and workforce transformation. We partner with over 100,000 instructors, encompassing expert practitioners and more than 400 university and industry partners, to develop and distribute educational content that is modular, flexible, and affordable. 28 Table of Contents Coursera offers a range of learning products to meet diverse educational and professional development needs, from hands-on labs to build practical skills to industry micro-credentials and accredited degree programs that can advance a career. We continue to invest in platform capabilities to enhance and personalize learning experiences and deliver skills development solutions on a global scale. We are also investing in a unified, next-generation platform designed to connect trusted content, skills intelligence, and AI-powered learning experiences across our global ecosystem. Recent innovations include generative AI-powered capabilities for tutoring, translation, interactive role play, and course authoring, as well as role-based learning solutions such as Skills Tracks. These capabilities enable content creators and institutions to deliver targeted learning aligned with evolving workforce needs. Organizations across the public and private sectors use Coursera to upskill and reskill employees, students, and citizens in fields such as generative AI, data science, technology, and business. Coursera serves individual learners and institutional customers through two operating segments: Enterprise and Consumer. The Enterprise segment engages employers, academic institutions, and government organizations through a direct sales team and reseller partnerships, as well as data-driven insights derived from activity on the Consumer platform. The Consumer segment focuses on attracting learners through branded content, institutional partnerships, and digital marketing, supported by personalized discovery and localized recommendations. Together, our Enterprise and Consumer segments create a connected ecosystem that enables us to serve individuals and organizations throughout their skills development journeys while continuously improving our products through shared data, skills intelligence, and learning insights. Recent Developments Transaction with Udemy On May 11, 2026 (“Closing Date”), we completed an Agreement and Plan of Merger (the “Merger Agreement”) to combine with Udemy, Inc. (“Udemy”), an online learning platform (the “Merger”). Under the terms of the Merger Agreement, each issued and outstanding share of Udemy common stock was converted into the right to receive 0.800 shares of our common stock. We accounted for the Merger as a business combination, and the financial results of Udemy are included in our Condensed Consolidated Financial Statements (Unaudited) prospectively from the Closing Date. Prior period financial statements have not been recast and do not include the financials results of Udemy. Refer to Note 4, Business Combination, included in Part I, Item 1 of this Form 10-Q for further information. During the second quarter of 2026, we incurred significant cash and non-cash charges related to the Merger and the integration of Udemy, primarily consisting of transaction and integration costs, as well as personnel and severance costs incurred as a direct result of the Merger. These costs are associated with our efforts to complete the Merger, integrate the businesses, and realize the operational synergies expected from the Merger. Refer to Note 15, Merger, integration, and restructuring related costs, included in Part I, Item 1 of this Form 10-Q for further information. CFO Appointment The Board appointed Michael Foley as Senior Vice President, Chief Financial Officer and Treasurer, and principal financial officer on an interim basis, effective November 17, 2025, and as principal accounting officer, effective January 3, 2026. Mr. Foley was appointed to these roles on a permanent basis effective March 16, 2026. Restructuring and Expense Reduction Initiatives On July 6, 2026, in connection with the Merger and our integration and synergy plans, we announced a commitment to a workforce reduction plan intended to align our cost structure, operating model, and personnel needs with our business objectives and operational priorities. As a result of this initiative, we expect to recognize expenses of approximately $9 million to $11 million, primarily consisting of termination benefits to the impacted employees, including severance payments and healthcare benefits. We expect substantially all of these charges to be cash expenditures incurred during the third and fourth quarters of 2026. Stock-based compensation expenses associated with the workforce reduction plan are not expected to be material. 29 Table of Contents Strategic Investment On July 28, 2026, we announced a strategic equity investment in LearnVector Inc. (“LearnVector”) pursuant to which we entered into a Series A Preferred Stock Purchase Agreement and related ancillary agreements (collectively, the “Transaction Agreements”) with LearnVector. Pursuant to the Transaction Agreements, we purchased shares of LearnVector’s Series A Preferred Stock for an aggregate purchase price of $100 million (the “Investment”), representing 33.33% of the ownership interest in LearnVector on a fully diluted basis as of the date of the Investment. LearnVector is an AI-native learning company founded by Andrew Ng, who also serves as Chairman of Coursera’s Board of Directors (the “Board”). In light of the relationship between Mr. Ng and Coursera, in considering the Investment, the Board established a Special Committee comprised solely of directors that the Board determined to be independent and disinterested in the Investment (the “Special Committee”). The Board delegated to the Special Committee the power and authority to evaluate, negotiate, approve, or disapprove, the Investment and the Transaction Agreements. The Special Committee unanimously approved the Investment and authorized and directed Coursera to execute the Transaction Agreements. Key Financial Results for Second Quarter 2026 •Total revenue was $298.6 million, including $103.8 million relating to the Merger with Udemy, up 60% from $187.1 million a year ago. •Gross profit was $173.4 million, compared to $102.7 million a year ago. Non-GAAP gross profit was $185.8 million, compared to $104.7 million a year ago. •Net loss was $(80.4) million, compared to $(7.8) million a year ago. Non-GAAP net income was $40.4 million, compared to $19.3 million a year ago. •Net loss per share was $(0.34), compared to $(0.05) a year ago. Non-GAAP net income per share was $0.17, compared to $0.12 a year ago. •Adjusted EBITDA was $42.7 million, compared to $18.0 million a year ago. •Net cash (used in) provided by operating activities was $(19.8) million, compared to $35.5 million a year ago. Free Cash Flow was $(32.6) million, compared to $28.6 million a year ago. The foregoing highlights mention both GAAP and non-GAAP financial measures. For definitions of our non-GAAP financial measures and why we believe they are useful, please see “Non-GAAP Financial Measures” below. Factors Affecting Our Performance Our business growth and future success depend on many factors. While these factors present opportunities for us, they also pose challenges that we must address to sustain growth and improve our results of operations. Ability to innovate our products. Central to our strategy is the continued innovation of our products. We aim to expand access to in-demand skills and high-quality education that supports career advancement by focusing on enhancing our platform’s capabilities. This includes accelerating product development cycles, leveraging data-driven insights, and applying AI capabilities and tools to improve the experience for learners, customers, and content creators across our platforms. Ability to source in-demand content. We believe learners and customers are attracted to Coursera due to the quality, trust, and job-relevance of our wide selection of educational content provided by our content creators. We intend to accelerate our content development efforts, continuing to source and produce in-demand content and credentials to attract, convert, and retain learners and grow our revenue over time. We are also introducing new product experiences designed to make skills development more personalized, interactive, and measurable. As emerging technology evolves and shapes the demand for certain career functions and roles, these efforts are designed to address evolving skill requirements and support workforce development at scale in collaboration with our content creators. 30 Table of Contents Ability to attract and retain trusted content creators. We believe our reach, scale, and reputation position us as a valuable partner for leading organizations and institutions seeking to develop and distribute content and credentials to a global audience. To remain a preferred platform for trusted content creators, we continue to invest in growing and engaging our learner base, enhancing the learning and authoring experience through AI-powered product innovations (e.g., Coach, AI powered role play and translations, and Course Builder), and providing a suite of academic integrity features to verify skills mastery (e.g., identity verification and anti-plagiarism detection). Additionally, we are focused on providing personalized discovery, career guidance, and recommendations, increasing conversion into paid offerings through efficient marketing, and enhancing data-driven insights and tools for learners, content creators, organizations, and institutions. Ability to enhance our go-to-market capabilities. To grow our business, we must efficiently attract learners and customers, offer a compelling value proposition, and increase engagement and retention on our platforms over time. Learners are central to our ecosystem, as their participation helps attract content creators who value our global reach. To increase engagement and retention, we are investing in platform capabilities that serve a broad audience. We aim to create a more unified and integrated experience through personalized recommendations, localized discovery, and clear value propositions that support learners’ educational and career goals and help customers develop their workforces at scale. Impact of mix shift over time. The mix of our business between our Enterprise and Consumer segments shifts periodically, which can affect our financial performance. We typically incur content costs in the form of fees paid to our content creators, calculated as a percentage of net revenue generated from their content. For subscription based offerings, we compensate our content creators based on learner engagement rather than enrollment rates, which incentivizes the development of more engaging content, supports innovation in learning formats, and better aligns incentives across the diverse content types offered on our platforms. Ability to convert free learners to paid learners. New learners often begin with free courses on our platforms, which serve as a funnel to grow our learner base and generate referrals to paid offerings. We engage these learners through targeted marketing, personalized recommendations, product integrations, and performance campaigns to highlight premium features and encourage conversion. Ability to grow in international markets. We see significant opportunity to grow our learner base, particularly in regions with large, underserved adult learning populations. As part of our growth strategy, we have invested and plan to continue investing in marketing, localized discovery, and translation efforts to support international growth and grow our global customer and learner base. We have adapted the front-end experience for Consumer learners, tailoring our pricing and checkout options, including offering local currency transactions in select markets. Our results will depend on our ability to effectively price and package our Consumer products to meet local demand and manage foreign currency risks. Ability to retain and expand our Enterprise customer relationships. Retaining and expanding usage within our existing Enterprise customer base, as well as attracting new customers, are critical drivers of our performance. The Enterprise market is highly competitive and subject to rapid changes in workforce skilling requirements driven by evolving business needs, technological advancements, and shifting labor market dynamics. Emerging and evolving technologies, such as AI, may create opportunities for workforce training and upskilling, though the extent of their impact on demand for our platforms, learning solutions, and product experiences remains uncertain. Our competitive position will be influenced by the strength of our product offerings, our pace of innovation, and our ability to more effectively address the talent transformation needs of our customers to deliver measurable workforce outcomes. Ability to effectively leverage our strategic partnerships. We rely on strategic partners, including resellers and other channel partners, as part of our growth strategy. Identifying partners and negotiating terms with them requires significant time and resources, and we are dependent on our ability to negotiate terms that are favorable to us and provide sufficient incentives for our partners to promote our products. In addition, we have granted certain resellers exclusivity to sell certain revenue offerings in select geographic areas, and are therefore dependent on their sales efforts. Our results will depend on the effectiveness of our strategic partners, and any negative changes in our relationship with our reseller partners, including the loss of a reseller or a significant reduction in business with a reseller, could adversely impact our sales in particular geographies, which could, in turn, negatively impact our results of operations. 31 Table of Contents Results of Operations The following table summarizes our results of operations, which are not necessarily indicative of results to be expected for future periods. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions) Revenue $ 298.6 $ 187.1 $ 494.3 $ 366.4 Cost of revenue(1) 125.2 84.4 212.3 165.8 Gross profit 173.4 102.7 282.0 200.6 Operating expenses: Research and development(1) 43.7 29.3 75.0 58.8 Sales and marketing(1) 104.0 63.6 173.3 120.4 General and administrative(1) 30.6 24.9 53.9 51.8 Merger, integration, and restructuring related costs(1) 79.8 — 89.8 (0.9) Total operating expenses 258.1 117.8 392.0 230.1 Loss from operations (84.7) (15.1) (110.0) (29.5) Interest income, net 7.7 8.0 14.8 15.8 Other (expense) income, net (1.3) 0.1 (2.2) 0.4 Loss before income taxes (78.3) (7.0) (97.4) (13.3) Income tax expense 2.1 0.8 3.5 2.3 Net loss $ (80.4) $ (7.8) $ (100.9) $ (15.6) (1)Includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions) Cost of revenue $ 1.0 $ 0.6 $ 1.6 $ 1.3 Research and development 9.2 8.9 16.8 17.5 Sales and marketing 6.7 5.5 11.6 10.4 General and administrative 6.9 8.8 14.1 20.4 Merger, integration, and restructuring related costs 15.8 — 15.8 (1.6) Total stock-based compensation expense $ 39.6 $ 23.8 $ 59.9 $ 48.0 32 Table of Contents The following table summarizes our results of operations as a percentage of revenue: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue 100.0 % 100.0 % 100.0 % 100.0 % Cost of revenue 41.9 45.1 42.9 45.3 Gross profit 58.1 54.9 57.1 54.7 Operating expenses: Research and development 14.6 15.7 15.2 16.0 Sales and marketing 34.8 34.0 35.1 32.9 General and administrative 10.3 13.3 10.9 14.1 Merger, integration, and restructuring related costs 26.7 — 18.2 (0.2) Total operating expenses 86.4 63.0 79.4 62.8 Loss from operations (28.3) (8.1) (22.3) (8.1) Interest income, net 2.6 4.3 3.0 4.3 Other (expense) income, net (0.4) 0.1 (0.4) 0.1 Loss before income taxes (26.1) (3.7) (19.7) (3.7) Income tax expense 0.8 0.5 0.7 0.6 Net loss (26.9) % (4.2) % (20.4) % (4.3) % Comparison of the Three and Six Months Ended June 30, 2026 and 2025 Impact of the Merger The comparability of our operating results is impacted by the Merger with Udemy, which closed on May 11, 2026, given the timing of the acquisition and the relative size of the acquired business. We expect the trends and results of operations of the combined company to be materially different than our financial results prior to the Closing Date. When comparing the results of operations for the three and six months ended June 30, 2026 to the same periods in the prior year, we may provide qualitative or quantitative disclosure about revenue, cost of revenue, and operating expenses contributed by Udemy after the Closing Date, where such disclosure would be meaningful and the impact is separately identifiable. Revenue Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 $ % 2026 2025 $ % (in millions, except percentages) Revenue: Enterprise $ 140.0 $ 64.3 $ 75.7 118 % $ 206.2 $ 126.0 $ 80.2 64 % Consumer 158.6 122.8 35.8 29 % 288.1 240.4 47.7 20 % Total revenue $ 298.6 $ 187.1 $ 111.5 60 % $ 494.3 $ 366.4 $ 127.9 35 % Revenue for the three months ended June 30, 2026 was $298.6 million, an increase of $111.5 million, or 60%, compared to $187.1 million for the prior-year quarter. Of this increase, $103.8 million was attributable to the inclusion of Udemy revenue following the completion of the Merger. Excluding the impact of the Merger, revenue increased $7.7 million, or 4%, supported by increased Coursera Plus subscription adoption, ongoing platform improvements, and localized pricing, payment, and promotional capabilities. Enterprise revenue for the three months ended June 30, 2026 increased by $75.7 million, or 118%, compared to the prior-year quarter. This increase was primarily driven by growth in subscription revenue of $75.3 million, largely due to the inclusion of Udemy revenue. 33 Table of Contents Consumer revenue for the three months ended June 30, 2026 increased by $35.8 million, or 29%, compared to the prior-year quarter. This growth was primarily driven by a $19.4 million increase in subscription revenue, which was attributable to the inclusion of $9.8 million of Udemy revenue and higher Coursera Plus adoption of $9.6 million. Additionally, transactional and other revenue increased by $18.7 million, largely due to the inclusion of Udemy revenue. These increases were partially offset by a $2.3 million decline in degrees revenue. Revenue for the six months ended June 30, 2026 was $494.3 million, an increase of $127.9 million, or 35%, compared to $366.4 million for the six months ended June 30, 2025. Of this increase, $103.8 million was attributable to the inclusion of Udemy revenue following the completion of the Merger. Excluding the impact of the Merger, revenue increased $24.1 million, or 7%, supported by increased Coursera Plus subscription adoption, ongoing platform improvements, and localized pricing, payment, and promotional capabilities. Enterprise revenue for the six months ended June 30, 2026 increased by $80.2 million, or 64%, compared to the six months ended June 30, 2025. This increase was primarily driven by growth in subscription revenue of $79.8 million, largely due to the inclusion of Udemy revenue. Consumer revenue for the six months ended June 30, 2026 increased by $47.7 million, or 20%, compared to the six months ended June 30, 2025. This growth was primarily driven by a $32.1 million increase in subscription revenue, which was attributable to higher Coursera Plus subscription adoption of $22.3 million and the inclusion of $9.8 million of Udemy revenue. Additionally, transactional and other revenue increased by $18.4 million, largely due to the inclusion of Udemy revenue. These increases were partially offset by a $2.8 million decline in degrees revenue. Cost of Revenue, Gross Profit, and Gross Margin Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 $ % 2026 2025 $ % (in millions, except percentages) Cost of revenue $ 125.2 $ 84.4 $ 40.8 48 % $ 212.3 $ 165.8 $ 46.5 28 % Gross profit $ 173.4 $ 102.7 $ 70.7 69 % $ 282.0 $ 200.6 $ 81.4 41 % Gross margin 58.1 % 54.9 % 57.1 % 54.7 % Cost of revenue for the three months ended June 30, 2026 was $125.2 million compared to $84.4 million for the prior-year quarter. The primary drivers of the increase in cost of revenue were a $17.4 million increase in content-related costs, a $13.0 million increase in platform operation, customer support, and maintenance costs, and a $9.0 million increase in amortization expense of intangible assets, all of which were primarily attributable to the Merger. Content costs for the Enterprise segment were $29.0 million and $19.5 million for the three months ended June 30, 2026 and 2025, with content costs as a percentage of revenue of 20.7% and 30.3% for the same periods. Content costs for the Consumer segment were $55.4 million and $47.5 million for the three months ended June 30, 2026 and 2025, with content costs as a percentage of revenue of 34.9% and 38.7% for the same periods. Content costs as a percentage of revenue for both segments decreased due to higher learner engagement in content created under production arrangements with lower revenue share and the introduction of the platform maintenance fee in January 2026, plus the impact of the Merger contributing more favorable content economics and a continued shift toward subscription revenue. Gross margin was 58.1% for the three months ended June 30, 2026, an increase from 54.9% for the prior year quarter. The increase in gross margin was driven by lower content cost rates in both our Enterprise and Consumer segments, partially offset by increases in platform operation, customer support, and maintenance costs and amortization expense of intangible assets. Cost of revenue for the six months ended June 30, 2026 was $212.3 million compared to $165.8 million for the six months ended June 30, 2025. The primary drivers of the increase in cost of revenue were a $20.7 million increase in content-related costs, a $15.1 million increase in platform operation, customer support, and maintenance costs, and a $8.8 million increase in amortization expense of intangible assets, all of which were primarily attributable to the Merger. 34 Table of Contents Content costs for the Enterprise segment were $48.3 million and $38.0 million for the six months ended June 30, 2026 and 2025, with content costs as a percentage of revenue of 23.4% and 30.2% for the same periods. Content costs for the Consumer segment were $103.1 million and $92.7 million for the six months ended June 30, 2026 and 2025, with content costs as a percentage of revenue of 35.8% and 38.6% for the same periods. Content costs as a percentage of revenue for both segments decreased due to higher learner engagement in content created under production arrangements with lower revenue share and the introduction of the platform maintenance fee in January 2026, plus the impact of the Merger contributing more favorable content economics and a continued shift toward subscription revenue. Gross margin was 57.1% for the six months ended June 30, 2026, an increase from 54.7% for the six months ended June 30, 2025. The increase in gross margin was driven by lower content cost rates in both our Enterprise and Consumer segments, partially offset by increases in platform operation, customer support, and maintenance costs and amortization expense of intangible assets. Operating Expenses Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 $ % 2026 2025 $ % (in millions, except percentages) Operating expenses: Research and development $ 43.7 $ 29.3 $ 14.4 49 % $ 75.0 $ 58.8 $ 16.2 28 % Sales and marketing 104.0 63.6 40.4 64 % 173.3 120.4 52.9 44 % General and administrative 30.6 24.9 5.7 23 % 53.9 51.8 2.1 4 % Merger, integration, and restructuring related costs 79.8 — 79.8 nm 89.8 (0.9) 90.7 nm Total operating expenses $ 258.1 $ 117.8 $ 140.3 119 % $ 392.0 $ 230.1 $ 161.9 70 % nm - not meaningful Total operating expenses for the three and six months ended June 30, 2026 were $258.1 million and $392.0 million compared to $117.8 million and $230.1 million for the three and six months ended June 30, 2025. Research and development expenses for the three months ended June 30, 2026 were $43.7 million compared to $29.3 million for the prior-year quarter. The increase was primarily due to a $9.4 million increase in personnel-related expenses, which was primarily attributable to the Merger, and a $4.6 million increase in software subscription and allocated expenses. Research and development expenses for the six months ended June 30, 2026 were $75.0 million compared to $58.8 million for the six months ended June 30, 2025. The increase was primarily due to a $9.9 million increase in personnel-related expenses, which was primarily attributable to the Merger, and a $6.3 million increase in software subscription and allocated expenses. Sales and marketing expenses for the three months ended June 30, 2026 were $104.0 million compared to $63.6 million for the prior-year quarter. The increase was primarily due to a $15.3 million increase in personnel-related expenses, a $15.2 million increase in marketing and advertising expenses, a $4.6 million increase in amortization of acquired intangible assets, and a $4.2 million increase in software subscription and allocated expenses, all of which were primarily attributable to the Merger. Sales and marketing expenses for the six months ended June 30, 2026 were $173.3 million compared to $120.4 million for the six months ended June 30, 2025. The increase was primarily due to a $24.7 million increase in marketing and advertising expenses, a $17.0 million increase in personnel-related expenses, a $4.6 million increase in amortization of acquired intangible assets, and a $4.9 million increase in software subscription and allocated expenses, all of which were primarily attributable to the Merger. 35 Table of Contents General and administrative expenses for the three months ended June 30, 2026 were $30.6 million compared to $24.9 million for the prior-year quarter. The increase was primarily driven by a $5.9 million increase in personnel-related expenses, which was primarily attributable to the Merger. General and administrative expenses for the six months ended June 30, 2026 were $53.9 million compared to $51.8 million for the six months ended June 30, 2025. The increase was driven by the Merger, primarily consisting of a $6.1 million increase in personnel-related expenses, although largely offset by a decrease of $6.1 million in stock-based compensation expense partially related to our former CEO’s leadership transition in the six months ended June 30, 2025. Merger, integration, and restructuring related costs were $79.8 million and $89.8 million for the three and six months ended June 30, 2026, primarily consisting of legal and regulatory fees, transaction costs, other professional services, and personnel and severance costs that were incurred directly as a result of the Merger. For the three and six months ended June 30, 2025, merger, integration, and restructuring related costs were $0.0 million and $(0.9) million, relating to our restructuring initiative originally announced in October 2024. Refer to Note 15, Merger, integration, and restructuring related costs, included in Part I, Item 1 of this Form 10-Q for further information. Other Income (Expense) Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 $ % 2026 2025 $ % (in millions, except percentages) Interest income, net $ 7.7 $ 8.0 $ (0.3) (4) % $ 14.8 $ 15.8 $ (1.0) (6) % Other (expense) income, net (1.3) 0.1 (1.4) nm (2.2) 0.4 (2.6) nm Total other income, net $ 6.4 $ 8.1 $ (1.7) (21) % $ 12.6 $ 16.2 $ (3.6) (22) % Total other income, net for the three and six months ended June 30, 2026 was primarily comprised of interest income earned on cash, cash equivalents, and marketable securities. Total other income, net decreased during the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, primarily due to lower interest income generated by existing investments, as interest rates declined across the comparative periods and previously-invested cash was used to fund share repurchase activities and costs related to the Merger. This was partially offset by an increase in interest income generated by investments in cash equivalents and marketable securities acquired in connection with the Merger with Udemy. Income Tax Expense Three Months Ended June 30, Change Six Months Ended June 30, Change 2026 2025 $ % 2026 2025 $ % (in millions, except percentages) Income tax expense $ 2.1 $ 0.8 $ 1.3 163 % $ 3.5 $ 2.3 $ 1.2 52 % Income tax expense for the three and six months ended June 30, 2026 and 2025 was primarily related to state and foreign taxes. Liquidity and Capital Resources Overview As of June 30, 2026, our principal source of liquidity was cash, cash equivalents, and marketable securities totaling $982.2 million. Since our inception, we have financed our operations primarily through proceeds from the issuance of redeemable convertible preferred stock, our initial public offering completed in April 2021, and cash generated from business operations. Our principal uses of cash in the three and six months ended June 30, 2026 and 2025 include the funding of our business operations, merger and integration related costs, investments in our internal-use software, purchases of content assets, and repurchases of our common stock, as discussed below. 36 Table of Contents We believe that our existing cash, cash equivalents, and marketable securities, along with our expected cash flows from operations, will be sufficient to meet our cash needs for at least the next 12 months. Over the longer term, our future capital requirements will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, the continuing market acceptance of our offerings, and any investments or acquisitions we may choose to pursue in the future. If we need to borrow funds or issue additional equity, we cannot assure you that any such additional financing will be available on terms acceptable to us, if at all. Moreover, any future borrowings may result in additional restrictions on our business and any issuance of additional equity would result in dilution to investors. If we are unable to raise additional capital when desired and on terms acceptable to us, our business, results of operations, and financial condition could be materially and adversely affected. Contractual Obligations and Commitments Except as discussed in Note 7, Leases, and Note 10, Commitments and Contingencies, included in Part I, Item 1 of this Form 10-Q, there were no material changes outside of the ordinary course of business in our commitments and contractual obligations for the three and six months ended June 30, 2026 as compared to those in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” set forth in our Form 10-K. Share Repurchase Program On May 15, 2026, our Board approved a share repurchase program authorizing Coursera to purchase up to $500 million of our common stock, excluding commissions and fees (the “Repurchase Program”). Under the Repurchase Program, Coursera may repurchase shares of common stock from time to time through open market purchases, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The Repurchase Program has no expiration date and continues unless otherwise suspended or discontinued. The number of shares 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 us to acquire any amount of common stock. During the three and six months ended June 30, 2026, we repurchased an aggregate of approximately 16.5 million shares of our common stock for $90.3 million pursuant to a Rule 10b5-1 plan, including $0.2 million of commissions. As of June 30, 2026, we had $409.9 million remaining under the Repurchase Program. In July 2026, we repurchased an aggregate of approximately 10.6 million shares of our common stock for $60.1 million, including $0.2 million of commissions. To date, we have utilized our existing cash and cash equivalents to fund repurchases under the Repurchase Program. Cash Flows The following table summarizes our cash flows: Six Months Ended June 30, 2026 2025 (in millions) Net cash (used in) provided by operating activities $ (5.2) $ 69.0 Net cash provided by (used in) investing activities 188.5 (15.1) Net cash used in financing activities (102.4) (6.5) Effect of foreign exchange rates on cash flows (0.3) — Net increase in cash, cash equivalents, and restricted cash $ 80.6 $ 47.4 Operating Activities Cash (used in) provided by operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation expense, depreciation and amortization, and impairment losses, as well as the effect of changes in operating assets and liabilities during each period. Our main source of operating cash is payments received from our customers. Our primary use of cash from operating activities is for personnel-related expenses, content creator fees, marketing and advertising expenses, indirect taxes, third-party cloud infrastructure expenses, and merger and integration related costs. 37 Table of Contents For the six months ended June 30, 2026, net cash used in operating activities was $5.2 million, primarily resulting from a net loss of $100.9 million adjusted for non-cash charges of $91.1 million and (i) an increase in prepaid expenses and other assets, partially offset by (ii) a decrease in accounts receivable due to timing of invoicing and collections, (iii) an increase in accrued compensation and other liabilities, and (iv) deferred revenue growth. For the six months ended June 30, 2025, net cash provided by operating activities was $69.0 million, primarily resulting from improved operating leverage and working capital driven by (i) deferred revenue growth, partially offset by (ii) the payout of annual and commission-based incentive compensation as well as severance related to our expense reduction initiative and (iii) an increase in accounts receivable due to timing of invoicing and collections. Cash (used in) provided by operating activities decreased by $74.2 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to cash payments of merger and integration related costs of $50.3 million and cash payments of merger-related personnel and severance costs of $18.1 million made during the six months ended June 30, 2026 associated with the Merger. Investing Activities For the six months ended June 30, 2026, net cash provided by investing activities was $188.5 million, due to (i) cash acquired as part of the Merger and (ii) proceeds from maturities of marketable securities, partially offset by (iii) purchases of marketable securities, (iv) purchases of content assets, (v) capitalized internal-use software costs, and (vi) purchases of property, equipment, and software. For the six months ended June 30, 2025, net cash used in investing activities was $15.1 million, due to (i) capitalized internal-use software costs, (ii) purchases of content assets, and (iii) purchases of property, equipment, and software. Financing Activities For the six months ended June 30, 2026, net cash used in financing activities was $102.4 million, due to (i) payments for repurchases of common stock under the Repurchase Program, (ii) payments for tax withholding on vesting of RSUs, partially offset by (iii) proceeds from the exercise of stock options, and (iv) proceeds from our employee stock purchase plan. For the six months ended June 30, 2025, net cash used in financing activities was $6.5 million, due to (i) payments for tax withholding on vesting of RSUs, partially offset by (ii) proceeds from the exercise of stock options, and (iii) proceeds from our employee stock purchase plan. Key Business Metrics and Non-GAAP Financial Measures We monitor the key business metrics and non-GAAP financial measures set forth below to help us evaluate our business and growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies. These key business metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may differ from similarly titled metrics or measures presented by other companies. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in “Non-GAAP Financial Measures” below. Key Business Metrics In connection with our Merger with Udemy, we have elected to discontinue reporting certain historical business metrics and introduced a new metric that we believe serves as a clearer indicator of the growth of our business and a better reflection of future revenue trends. We are introducing Paid Subscribers as a key business metric to provide investors with additional insight into Consumer subscription trends, and we will no longer disclose New and Total Registered Learners beginning in the second quarter of 2026. 38 Table of Contents Additionally, key business metrics presented below represent the combined metrics of Coursera and Udemy, reflecting a unified reporting methodology and common definitions. Historical combined metrics have been conformed to this unified reporting methodology for comparability purposes, and therefore, may not equal the sum of each company’s previously reported metrics or be comparable to the financial information presented in this Form 10-Q, which incorporates Udemy’s operating results beginning on May 11, 2026, the Closing Date of the Merger. For additional information regarding the metrics discussed, please see the definitions below. Enterprise Customers We count the total number of Enterprise Customers that are active on the Coursera or Udemy platforms at the end of each period. For purposes of determining our customer count, we treat each customer account that has a corresponding contract as a unique customer, and a single organization with multiple divisions, segments, or subsidiaries may be counted as multiple customers. We define an “Enterprise Customer” as a customer who purchases Coursera or Udemy solutions through our direct sales force or through reseller and channel partnerships. For purposes of determining our Enterprise Customer count, we exclude customers who do not purchase either through our direct sales force or through reseller and channel partnerships, including organizations engaging through our self-service platform. For the six months ended June 30, 2026, approximately 95% of Enterprise revenue was generated from our Enterprise Customers. We believe that the number of Enterprise Customers and our ability to increase this number is an important indicator of the growth of our Enterprise segment and future Enterprise segment revenue trends. June 30, 2026 2025 Enterprise Customers(1) 12,107 12,325 YoY change (2) % (1) On a standalone basis Coursera reported 1,686 Paid Enterprise Customers and Udemy reported 17,107 Udemy Business Customers as of June 30, 2025. These legacy as-reported figures were calculated using each respective company’s pre-merger definitions and reporting methodology as reported in their respective Quarterly Reports on Form 10-Q for the quarter ended June 30, 2025, and are provided solely for historical reference. Net Retention Rate for Enterprise Customers We disclose Net Retention Rate for Enterprise Customers as a supplemental measure of our Enterprise revenue growth. We believe Net Retention Rate for Enterprise Customers is an important metric that provides insight into the long-term value of our subscription agreements and our ability to retain and grow revenue from our Enterprise Customers. We calculate annual recurring revenue (“ARR”) by annualizing each customer’s monthly recurring revenue (“MRR”) for the most recent month at period end. We calculate “Net Retention Rate” for a period by starting with the ARR from all Enterprise Customers as of the 12 months prior to such period end, or “Prior Period ARR”. We then calculate the ARR from these same Enterprise Customers as of the current period end, or “Current Period ARR”. Current Period ARR includes expansion within Enterprise Customers and is net of contraction or attrition over the trailing 12 months but excludes revenue from new Enterprise Customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at our Net Retention Rate for Enterprise Customers. Our Net Retention Rate for Enterprise Customers was 91% for the three months ended June 30, 2026 compared to 95% for the three months ended June 30, 2025. The decrease was primarily the result of customer attrition for business customers, partially offset by the expansion of government customers. Our Net Retention Rate for Enterprise Customers is expected to fluctuate in future periods due to a number of factors, including the growth of our revenue base, the penetration within our Enterprise Customer base, expansion of products and features, and our ability to retain and expand our Enterprise Customers. 39 Table of Contents Three Months Ended June 30, 2026 2025 Net Retention Rate for Enterprise Customers(2) 91 % 95 % YoY change (4) % (2) On a standalone basis for three months ended June 30, 2025, Coursera reported Net Retention Rate of 93% and Udemy reported Net Dollar Retention Rate of 95%. These legacy as-reported figures were calculated using each respective company’s pre-merger definitions and reporting methodology as reported in their respective Quarterly Reports on Form 10-Q for the quarter ended June 20, 2025, and are provided solely for historical reference. Paid Subscribers Paid Subscriber count is defined as the total number of unique subscribers with at least one paid Consumer subscription product that contributes to revenue as of the reporting period. For purposes of determining unique subscriber count, subscribers with multiple paid subscriptions are counted as a single Paid Subscriber. June 30, 2026 2025 (in thousands, except percentages) Paid Subscribers 1,655 1,152 YoY growth 44 % Segment Revenue We generate revenue from two reportable segments: Enterprise and Consumer. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions, except percentages) Enterprise revenue $ 140.0 $ 64.3 $ 206.2 $ 126.0 YoY growth 118 % 64 % Consumer revenue $ 158.6 $ 122.8 $ 288.1 $ 240.4 YoY growth 29 % 20 % Total revenue $ 298.6 $ 187.1 $ 494.3 $ 366.4 YoY growth 60 % 35 % Segment Gross Profit We monitor segment gross profit as a key metric to help us evaluate the financial performance of our individual segments. Segment gross profit represents segment revenue less segment content costs paid to content creators. Segment gross margin represents segment gross profit expressed as a percentage of segment revenue. Given that content costs are the largest individual cost of our revenue, and that these costs contractually vary as a percentage of revenue between our Enterprise and Consumer offerings, mix shifts between our two segments can be a significant factor of our overall gross margin, financial performance, and profitability. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions, except percentages) Enterprise gross profit $ 111.0 $ 44.8 $ 157.9 $ 88.0 Enterprise segment gross margin % 79.3 % 69.7 % 76.6 % 69.8 % Consumer gross profit $ 103.2 $ 75.3 $ 185.0 $ 147.7 Consumer segment gross margin % 65.1 % 61.3 % 64.2 % 61.4 % 40 Table of Contents Enterprise segment gross margin increased to 79.3% and 76.6% for the three and six months ended June 30, 2026 compared to 69.7% and 69.8% when comparing the same periods. Consumer segment gross margin increased to 65.1% and 64.2% for the three and six months ended June 30, 2026 up from 61.3% and 61.4% for the three and six months ended June 30, 2025. The improvements in gross margin were primarily the result of lower content cost rates in both our Enterprise and Consumer segments for the three and six months ended June 30, 2026, due to higher learner engagement in content created under production arrangements with lower revenue share and the introduction of the platform maintenance fee in January 2026, plus the impact of the Udemy Merger contributing more favorable content economics and continued shift toward subscription revenue. Non-GAAP Financial Measures Non-GAAP Gross Profit, Non-GAAP Net Income, and Non-GAAP Net Income Per Share We define non-GAAP gross profit and non-GAAP net income as GAAP gross profit and GAAP net loss excluding: (i) merger, integration, and restructuring related costs; (ii) stock-based compensation expense; (iii) amortization of acquired intangible assets; (iv) amortization of stock-based compensation expense capitalized as internal-use software costs; (v) payroll tax expense related to stock-based compensation; and (vi) costs and settlement (gains) losses related to significant and non-recurring legal and regulatory matters, net of insurance recoveries. Non-GAAP net income per share is calculated by dividing non-GAAP net income by the diluted weighted average shares of common stock outstanding. We believe the presentation of these adjusted operating results provides useful supplemental information to investors and facilitates the analysis and comparison of our operating results across reporting periods. The following tables provide a reconciliation of GAAP gross profit and GAAP net loss, the most directly comparable GAAP financial measure, to non-GAAP gross profit and non-GAAP net income: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions) Gross profit $ 173.4 $ 102.7 $ 282.0 $ 200.6 Amortization of acquired intangible assets 9.5 — 9.5 — Stock-based compensation expense 1.0 0.6 1.6 1.3 Amortization of stock-based compensation capitalized as internal-use software costs 1.8 1.4 3.4 2.9 Payroll tax expense related to stock-based compensation 0.1 — 0.1 — Non-GAAP gross profit $ 185.8 $ 104.7 $ 296.6 $ 204.8 41 Table of Contents Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions) Net loss $ (80.4) $ (7.8) $ (100.9) $ (15.6) Merger, integration, and restructuring related costs 79.8 — 89.8 (0.9) Stock-based compensation expense 23.8 23.8 44.1 49.6 Amortization of acquired intangible assets 14.1 — 14.1 — Amortization of stock-based compensation capitalized as internal-use software costs 1.8 1.4 3.4 2.9 Payroll tax expense related to stock-based compensation 0.7 0.7 1.4 1.6 Significant and non-recurring legal and regulatory matters 0.6 1.2 0.9 1.4 Non-GAAP net income $ 40.4 $ 19.3 $ 52.8 $ 39.0 Weighted-average shares used in computing net loss per share—basic 233.4 162.5 201.2 161.6 Effect of dilutive securities 5.3 4.8 3.8 4.4 Weighted-average shares used in computing non-GAAP net income per share—diluted 238.7 167.3 205.0 166.0 Net loss per share—basic and diluted $ (0.34) $ (0.05) $ (0.50) $ (0.10) Non-GAAP net income per share—diluted $ 0.17 $ 0.12 $ 0.26 $ 0.23 Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA and Adjusted EBITDA Margin are key measures used by our management to help us analyze our financial results, establish budgets and operational goals for managing our business, evaluate our performance, and make strategic decisions. We define Adjusted EBITDA as our GAAP net loss excluding: (i) merger, integration, and restructuring related costs; (ii) stock-based compensation expense; (iii) depreciation and amortization; (iv) income tax expense; (v) other expense (income), net; (vi) payroll tax expense related to stock-based compensation; (vii) costs and settlement (gains) losses related to significant and non-recurring legal and regulatory matters, net of insurance recoveries; and (viii) interest income, net. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. 42 Table of Contents The following table provides a reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions, except percentages) Net loss $ (80.4) $ (7.8) $ (100.9) $ (15.6) Merger, integration, and restructuring related costs 79.8 — 89.8 (0.9) Stock-based compensation expense 23.8 23.8 44.1 49.6 Depreciation and amortization 22.5 7.4 30.0 14.5 Income tax expense 2.1 0.8 3.5 2.3 Other expense (income), net 1.3 (0.1) 2.2 (0.4) Payroll tax expense related to stock-based compensation 0.7 0.7 1.4 1.6 Significant and non-recurring legal and regulatory matters 0.6 1.2 0.9 1.4 Interest income, net (7.7) (8.0) (14.8) (15.8) Adjusted EBITDA $ 42.7 $ 18.0 $ 56.2 $ 37.6 Net loss margin (26.9) % (4.2) % (20.4) % (4.3) % Adjusted EBITDA Margin 14.3 % 9.6 % 11.4 % 10.3 % Free Cash Flow We define Free Cash Flow as net cash (used in) provided by operating activities, less capitalized internal-use software costs, purchases of content assets, and purchases of property, equipment, and software, as we consider these capital expenditures necessary to support our ongoing operations. We consider Free Cash Flow to be a liquidity measure that provides useful information to management and investors in understanding and evaluating our liquidity and future ability to generate cash that can be used for strategic opportunities, including investing in our business and strengthening our balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. The following table provides a reconciliation of net cash provided by operating activities, the most directly comparable GAAP financial measure, to Free Cash Flow: Six Months Ended June 30, 2026 2025 (in millions) Net cash (used in) provided by operating activities(1) $ (5.2) $ 69.0 Less: capitalized internal-use software costs (13.0) (8.3) Less: purchases of content assets (10.9) (5.9) Less: purchases of property, equipment, and software (0.5) (0.9) Free Cash Flow $ (29.6) $ 53.9 (1) Net cash (used in) provided by operating activities includes cash payments of merger and integration related costs of $50.3 million and cash payments of merger-related personnel and severance costs of $18.1 million made during the six months ended June 30, 2026. The six months ended June 30, 2025 include $5.2 million in cash payments of other restructuring costs. 43 Table of Contents Critical Accounting Estimates Our Condensed Consolidated Financial Statements (Unaudited) and the related notes thereto included elsewhere in this Form 10-Q have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these Condensed Consolidated Financial Statements (Unaudited) requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected. Other than those described below, there have been no material changes to our critical accounting estimates as compared to those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Form 10-K. Business Combinations The allocation of the purchase price in a business combination requires us to make significant estimates in determining the fair value of acquired assets and assumed liabilities, especially with respect to intangible assets. The excess of the purchase price in a business combination over the fair value of these tangible and intangible assets acquired and liabilities assumed is recorded as goodwill. Critical estimates in valuing acquired intangible assets include, but are not limited to, future expected cash flows and operating results, the selected valuation approaches and methods, useful lives, royalty and discount rates, the rate of technological obsolescence, customer retention rates, and the time to rebuild acquired content creator relationships. We typically engage third party valuation appraisal firms to assist us in determining the fair values of acquired intangible assets, including the relief from royalty method, the with-and-without method, and the multi-period excess earnings method used to calculate fair values under the income approach. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. We evaluate these estimates and assumptions as new information is obtained and may record adjustments to the fair value of the tangible and intangible assets acquired and liabilities assumed up to one year from the Closing Date. Revenue Recognition - Principal Versus Agent We are generally the principal with respect to our Consumer and Enterprise revenue arrangements as we control the performance obligation and are the primary obligor with respect to delivering access to course content. Additionally, we have inventory risk through recoupable advances sometimes paid to content creators. Therefore, we record the gross purchase price paid by the customer related to these arrangements within revenue on the condensed consolidated statements of operations, and we record payments to content creators as content costs within cost of revenue. Furthermore, we are the principal in certain contracts sold through our reseller partners. For arrangements where we have visibility into the price paid by the end customer, we recognize the gross transaction price as revenue, and allocate amounts retained by the reseller between deferred sales commissions within sales and marketing and, to the extent applicable, customer support costs within cost of revenue.