Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2: The Department of Justice probing Netflix tactics admit the Warner
Speaker 2: Brothers Discovery deal investigation. This according to The Wall Street Journal,
Speaker 2: the Justice Department investigating whether Netflix engaged in anti competitive taxes.
Speaker 2: It's probing the streaming network's proposed acquisition of Warner Discovery
Speaker 2: Studios in HBO Max streaming service. The Department looking at
Speaker 2: whether Netflix's planned Warner deal could enrich or in trench
Speaker 2: its market power or lead to monopoly in the future.
Speaker 2: It's also reviewing Paramount's proposed acquisition.
Speaker 3: Yeah, stock off it's earlier high. Is it just still
Speaker 3: up though? About five ten percent here in the Friday trade. Hey,
Speaker 3: we want to get to Coursera company did report earnings
Speaker 3: last night, forecast revenue for twenty twenty six, with the
Speaker 3: guidance beating the average analyst Estmate stock has swung quite
Speaker 3: a bit today, up about seven percent at its highs
Speaker 3: off more than four four percent at its lows. Key
Speaker 3: Bank and RBC book lowering their price targets on the
Speaker 3: stock today and we just mentioned about this Warner Brothers
Speaker 3: Discovery waiting to get this deal done. There is also
Speaker 3: an M and A story to Coursera as well. It
Speaker 3: is about a one billion dollar market cap company, online
Speaker 3: education company. It is down about nineteen percent year to date,
Speaker 3: twelve percent. Tim of the float is short.
Speaker 2: I want to bring in Greg Hart, president and CEO.
Speaker 2: Of course, Sarah Greg joins us from San Francisco. Greg,
Speaker 2: I want to start with the merger. Carol mentioned it
Speaker 2: in December, an all stock merger between Coursera and you.
Speaker 2: To me, what is the status of that right now?
Speaker 2: We understand it's going to close in the second part
Speaker 2: of the year. The integration, how does it go? What
Speaker 2: does it mean in terms of the customer and user experience?
Speaker 2: And who's the boss?
Speaker 4: Thank you Tim for the question. So we are going
Speaker 4: through the regulatory approval process right now. Nothing to share
Speaker 4: on that front, but we're moving through the paces and
Speaker 4: then we'll you know, hope to move through that and
Speaker 4: then go through shareholder approval. In terms of who's the boss,
Speaker 4: first of all, the customer is always the boss. In
Speaker 4: terms of the actual governance of the company, I will
Speaker 4: be the CEO of the combined company, and we are
Speaker 4: excited about that combination because of the opportunity to bring together,
Speaker 4: you know, two businesses that are really quite complementary. You
Speaker 4: to me, the companies are roughly the same size in revenue,
Speaker 4: So the combined revenue of the companies would be about
Speaker 4: one point five billion dollars for twenty twenty five with
Speaker 4: about ten percent adjusted ebitdaal margin's free synergies. We also
Speaker 4: announced at signing that we would deliver one hundred and
Speaker 4: fifteen million dollars of Synergy's post clothes within the first
Speaker 4: two years, and so a nice improvement in the operating
Speaker 4: margin that we have as a combined company. We are
Speaker 4: focused as we go through the planning process on exactly
Speaker 4: what that integrated company and platform will look like. So
Speaker 4: how do we think about pricing and packaging and promotions,
Speaker 4: of course, how do we think about the leadership team,
Speaker 4: and then how do we bring the companies together to
Speaker 4: really drive not only you know, better margins through the synergies,
Speaker 4: but also really over time, drive much higher revenue growth
Speaker 4: and do a better job of addressing the massive market
Speaker 4: opportunity in front of the companies.
Speaker 2: Greg there there have been many examples of mergers that
Speaker 2: have been announced that haven't actually gone through for a
Speaker 2: whole multitude of reasons, some of them in the regulatory
Speaker 2: some of them have involved other factors. What happens if
Speaker 2: this doesn't go through.
Speaker 4: Well, I'm very confident that it will. I mean, we
Speaker 4: operate in the education space, which is a massive space,
Speaker 4: you know, two trillion plus dollars. That encompasses physical education
Speaker 4: so day through twelve universities, vocational schools. It encompasses the
Speaker 4: online sector that we have happened to be a part of,
Speaker 4: and you to me also is a part of. And
Speaker 4: then of course it encompasses all the other ways that
Speaker 4: people learn today and increasingly that is through things like
Speaker 4: llms or YouTube or TikTok. We believe we have a
Speaker 4: very differentiated offering, but we are a very very small
Speaker 4: player within that massive space, and we believe that the
Speaker 4: combination actually delivers more value to every one of our constituents,
Speaker 4: to our learners. They'll get access to more content, not
Speaker 4: only the three hundred and seventy five different university and
Speaker 4: industry partners that Coursera has, but the eighty five thousand
Speaker 4: plus subject matter experts that you to mese content creator
Speaker 4: community has and so it'll bring more choice, more learning opportunity.
Speaker 4: It'll be better for our content creators because they'll have
Speaker 4: access to a worldwide learner audience that's approaching three hundred
Speaker 4: million registered learners across the two companies. And it's better
Speaker 4: for our enterprise customers because we're able to deliver them
Speaker 4: the breadth of that content coming from that content creator
Speaker 4: network across You to Me and Coursera.
Speaker 3: Hey, listen. One of the things, Well, first of all,
Speaker 3: I have to just follow up on the deal, the
Speaker 3: combination with you and you to me? Is it still
Speaker 3: though you said you're pretty confident about regulatory greg so
Speaker 3: maybe still on track to close this deal in the
Speaker 3: second part of twenty twenty six.
Speaker 4: Yes, we've heard nothing that would you change our belief
Speaker 4: that it will close, you know, by the second half
Speaker 4: of twenty twenty six, and remain confident in getting all
Speaker 4: the regulatory approvals we need to do.
Speaker 1: So.
Speaker 3: One of the things I thought that's interesting, I always
Speaker 3: think about your business. You mentioned university industry partners You've
Speaker 3: got these subject experts. How are people most using it?
Speaker 3: Is it your corporate partnerships where people want retraining for
Speaker 3: their employees. Is it people on their own? Is it
Speaker 3: people who are just interested in about different topics like
Speaker 3: tell us where the growth is? Is it all of
Speaker 3: it or certain parts of it?
Speaker 4: Fantastic question, Kurl. So our business this of course, Sarah
Speaker 4: and independent company. We are two thirds consumer, one third
Speaker 4: enterprise from a revenue perspective. You to me is the inverse,
Speaker 4: they are two thirds enterprise one third consumer. For both companies,
Speaker 4: there is a huge focus on and growth in technology
Speaker 4: and specifically AI right now, and so for Coursera, last
Speaker 4: year we saw enrollments in gen AI related content at
Speaker 4: a rate of fifteen enrollments per minute. In twenty twenty
Speaker 4: four that was only eight enrollments per minute, and so
Speaker 4: a real burgeoning interest that I believe will continue in
Speaker 4: twenty twenty six as well. And we are really focused
Speaker 4: on delivering not just learning, but delivering skills so that
Speaker 4: people can't advance their careers. Eighty six percent of the
Speaker 4: learners who come to Coursera come here to advance their careers,
Speaker 4: and so we are very focused on delivering them skills
Speaker 4: that they can use to advance their careers and that
Speaker 4: they can demonstrate, you know, real mastery of as they
Speaker 4: are in the workforce, Hey.
Speaker 3: Greg, really quickly thirty seconds are people in IT train
Speaker 3: and then that's it. You don't see them again. Or
Speaker 3: how much of it is return business that the platform
Speaker 3: is sticking in there constantly coming back to learn more
Speaker 3: and forgive me only about twenty five seconds.
Speaker 4: Well more than fifty percent of our consumer revenue is
Speaker 4: around Course Sarah Plus, which is our monthly or annual subscription.
Speaker 4: It's the best value for learners because they get access
Speaker 4: to all of that content, and those learners tend to stay,
Speaker 4: obviously for longer than a single course learner might.
Speaker 3: Cool stuff as always, stay in touch, love talking with you,
Speaker 3: Greg Hart, President and CEO of Course Sarah joining us
Speaker 3: from the West Coast,