Looking back on consumer subscription stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Coursera (NYSE:COUR) and its peers.
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 15.5% since the latest earnings results.
Coursera (NYSE:COUR)
Founded by two Stanford University computer science professors, Coursera (NYSE:COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Coursera reported revenues of $194.2 million, up 10.3% year on year. This print exceeded analysts’ expectations by 2.1%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations significantly.
“We delivered a strong third quarter, driven by 13% year-over-year revenue growth in our Consumer segment. As individuals increasingly seek the skills necessary to adapt and thrive in today’s evolving job market, we are strengthening Coursera’s position as the world’s trusted source for verified learning,” said Coursera CEO Greg Hart.
Coursera pulled off the highest full-year guidance raise of the whole group. The company reported 191 million active customers, up 17.8% year on year. Even though it had a relatively good quarter, the market seems discontent with the results. The stock is down 0.6% since reporting and currently trades at $7.88.
Is now the time to buy Coursera? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Roku (NASDAQ:ROKU)
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Roku reported revenues of $1.21 billion, up 14% year on year, in line with analysts’ expectations. The business had a strong quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and full-year EBITDA guidance exceeding analysts’ expectations.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $93.59.
Is now the time to buy Roku? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Bumble (NASDAQ:BMBL)
Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.
Bumble reported revenues of $246.2 million, down 10% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a decline in its buyers and a significant miss of analysts’ number of paying users estimates.
As expected, the stock is down 36.3% since the results and currently trades at $3.46.
Read our full analysis of Bumble’s results here.
Duolingo (NASDAQ:DUOL)
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $271.7 million, up 41.1% year on year. This result beat analysts’ expectations by 4.3%. Zooming out, it was a satisfactory quarter as it also logged an impressive beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations.
Duolingo scored the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 135.3 million users, up 19.6% year on year. The stock is down 34% since reporting and currently trades at $172.58.
Read our full, actionable report on Duolingo here, it’s free for active Edge members.
Chegg (NYSE:CHGG)
Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Chegg reported revenues of $77.74 million, down 43.1% year on year. This number surpassed analysts’ expectations by 1.9%. Taking a step back, it was a slower quarter as it recorded a decline in its users and a significant miss of analysts’ number of services subscribers estimates.
Chegg had the slowest revenue growth among its peers. The company reported 2.18 million users, down 43% year on year. The stock is up 6.7% since reporting and currently trades at $0.95.
Read our full, actionable report on Chegg here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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