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Looking back on consumer subscription stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Udemy 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 17.1% since the latest earnings results.

Udemy

With courses ranging from investing to cooking to computer programming, Udemy is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.

Udemy reported revenues of $195.7 million, flat year on year. This print exceeded analysts’ expectations by 1.4%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter missing analysts’ expectations significantly.

“Our Q3 results demonstrate strong momentum as Udemy evolves towards becoming the world's leading AI-powered skills acceleration platform,” said Hugo Sarrazin, President and CEO of Udemy.

Unsurprisingly, the stock is down 19.3% since reporting and currently trades at $5.15.

Best Q3: Roku

With a name meaning six in Japanese because it was the founder's sixth company that he started, 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.

The market seems happy with the results as the stock is up 17.7% since reporting. It currently trades at $110.83.

Weakest Q3: Bumble

Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble 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 32.3% since the results and currently trades at $3.68.

Read our full analysis of Bumble’s results here.

Netflix

Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix is a pioneering streaming content platform.

Netflix reported revenues of $11.51 billion, up 17.2% year on year. This number was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations but a significant miss of analysts’ EBITDA estimates.

Netflix had the weakest performance against analyst estimates among its peers. The company reported 317.2 million users, up 12.2% year on year. The stock is down 26.7% since reporting and currently trades at $91.06.

Read our full, actionable report on Netflix here, it’s free.

Coursera

Founded by two Stanford University computer science professors, Coursera 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 surpassed analysts’ expectations by 2.1%. Zooming out, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations significantly.

Coursera scored the highest full-year guidance raise among its peers. The company reported 191 million active customers, up 17.8% year on year. The stock is down 37% since reporting and currently trades at $6.65.

Read our full, actionable report on Coursera here, it’s free.

What Happened?

Shares of online learning platform Udemy fell 4.8% in the morning session after KeyBanc Capital Markets downgraded the stock to 'Sector Weight' from 'Overweight'. 

The downgrade followed the company's merger announcement with Coursera. In addition to the rating change, the investment firm also removed its price target for the online education provider. This action indicated a more cautious outlook on the stock's prospects following the significant corporate development.

What Is The Market Telling Us

Udemy’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 26 days ago when the stock gained 4.1% on the news that the latest Consumer Price Index (CPI) report showed inflation cooling more than anticipated, fueling optimism for potential Federal Reserve interest rate cuts. 

The November report indicated that annual inflation fell to 2.7%, significantly below economists' expectations of 3.1% and its lowest level since July. The Consumer Price Index, or CPI, is a key measure of inflation. This encouraging data was welcomed by investors, as sustained lower inflation could give the U.S. Federal Reserve more justification to lower interest rates in the coming year. Wall Street favors lower interest rates because they reduce borrowing costs for companies and can stimulate economic activity, making stocks more attractive. The positive news helped major indexes, including the S&P 500 and the tech-heavy Nasdaq, snap a four-day losing streak.

Udemy is flat since the beginning of the year, and at $5.56 per share, it is trading 45% below its 52-week high of $10.10 from February 2025. Investors who bought $1,000 worth of Udemy’s shares at the IPO in October 2021 would now be looking at an investment worth $202.00.