Josh Baer: Great. Really clear. And one on translation using Gen AI to do translations for your courses. Just wondering for you if — how helpful that is or if it’s helpful, I know that you have a lot of focus in actually having like local language content. And so just wondering if that’s an area of cost savings for you or maybe not as relevant? Thank you.
Greg Brown: Hey, Josh, thanks for the question. It is not as relevant for us because we do had the advantage on a global basis, our instructors developing localized content and local language, local tone, local contacts that we package and make available to our enterprise customers around the globe. So not relevant to us because it’s not needed. And the second thing I would say is leveraging Gen AI for language translation is a fairly basic capability. And we’re really focused on developing next-generation learning experiences as a result of the investments we talked about in the learner experience, capabilities we’re providing our structures as well as organizations. And you’re going to hear a lot more from us around our ability to deliver skills mapping capability and mapping that the content learning path and tailored learning path in product to truly transform how organizations develop skills as a result of getting more systematic access to personalized learning experiences through our platform.
And it’s these types of investments that we’re making that are truly going to be transformational as we move forward in helping organizations transition to a skills-based economy. And that’s really where our energy is focused on these types of investments.
Operator: And our next question will come from Brent Thill with Jefferies. Please go ahead.
Dave Lustberg : Hey, guys. This is Dave Lustberg on for Brent. I have two, if I may. Maybe to start, I wanted to ask on the consumer subscription, nice to hear, I think, 100,000 subs passed. Maybe how long has that been rolled out? I guess, if there’s like a data point on the quarterly growth? And where do you guys see that getting to over time?
Sarah Blanchard : Hi, Dave, thanks for the question. So we really started rolling out in small test markets. Almost two years ago with our subscription, it’s been a while. But part of that rollout was really taking into consideration bringing our instructors along because, again, the consumer marketplace, they are the consumer transactional marketplace, they received 37% at the time subscriptions were up 25%. And as we know now, the 25% is going to be going to 15% over time. And so just bringing them along and making sure that we are gradually rolling that out to really be thoughtful about the earnings was important to us. Where this goes over time, we think it’s reasonable that this becomes a meaningful portion of our consumer revenue.
And at the same time, that marketplace, that transactional marketplace is where new courses are tested, it’s where they get speed back and it’s where we are able to see the quality and applicability of those courses so that then we can put them over in our subscription product. So hard to say exactly where that’s going to go. We do think a lot of the features and functionality that we’re building out for learners on the UV side first. Those are most applicable to the personal plan our subscription plan. And so we’re going to continue to update you as that program rolls out. What I will say is what we started first in the U.S. and about 50% of our stops are our subscribers are in the U.S. still to date. We have added on a number of markets over 10 additional markets slowly over time.
And right now, what we’re seeing is the fastest growth in India. So more to come on that, but we’re really excited about the response that we’ve seen from consumers with respect to our personal plan.
Dave Lustberg: Got it. That’s helpful. And then maybe just a quick follow-up. Interesting to hear your comments on certifications and credentialing. I think it’s a very topical topic in the industry now. I’m sure many of you saw another company in the space acquired a sizable company around just that credentialing and whatnot. So curious where you guys think you sit today as it relates to those credentialing capabilities? And how hard are you guys going to lean into this? How important is it for you? It would be helpful to hear your thoughts on that. Thanks so much, guys.
Greg Brown: Yeah, you got it. Thanks for the question. Very important to us. I couldn’t be happier with the momentum and the uptake we’re seeing with respect to badging and credentialing. And I’ll give you an example, we have one of our larger Fortune 500 financial services customers, run a 5,000-seat initial phase deployment that resulted in an increase of 13 days or an acceleration of 13 days faster in terms of certification completion and a 20% higher first-time pass rate than the prior vendor they had used. So as a result of that, we’ve gone from 4,000 seats to 30,000 seats this last quarter through that expansion. And that’s really, I think, consistent with what we’re seeing across the board is because we have the badging and certification capability in platform now, and we have an end-to-end continuity with respect to Udemy Business Pro layered on top of our core content to enable folks to come in and have an immersive learning experience, which ended up self-help accelerate the learning process, which helps accelerate the amount of days that it takes to get through the learning process, series of course.
And then as a result of the higher quality experience, a higher pass rate, first-time pass rates. So that’s just one of a number of examples. We had another large Fortune 500 APAC customer. It’s been a customer for — of ours for some time, do something similar. And they ended up standardizing on our platform about year and half years ago, they just layered in 10,000 seats of upro for their check side of the house. And on top of that, they said one of the reasons — one of the primary reasons they ended up layering those seats in is because of the badging and certification capability that we now have in conjunction with the immersive learning experience of upro. So we really couldn’t be happier with the momentum we’re seeing right now, and we expect it to continue.
Validation is really important. It’s important for the learner. It’s important for customers. And the reality is it’s really in support of this whole transition to skills-based economy. And so for us, we are investing heavily there. We’ve just made available the ability for learners to now display those badges in not only in our platform but external platforms, social platforms and there’s further investments coming. So all to say, great momentum on our side, helping us win more deals, expand faster in existing customers, and we expect that to continue.
Operator: Our next question will come from Brett Knoblauch with Cantor Fitzgerald. Please go ahead.
Brett Knoblauch : Hi, guys. Thanks for the question. Congrats on the quarter. I guess one for me. If we kind of look at average ACVs, I mean the customers added over the last year, it’s up 33% and accelerated. So I guess my question is, what’s really driving the ACV growth of, call it, the more recently added customers? Is it really just like the makeup of the customers you’re adding in this ‘tough macro it might get more’ forward thing? Anything else to help us understand what’s driving that?
Sarah Blanchard : Yeah. I’ll take that, and Greg can chime in here. What we are seeing is the deal sizes increase because enterprises are having a little bit each of a time navigating this tough macro than the smaller businesses. And so as that business has shifted toward enterprise, you’ll see that. Also, I believe the clarity in which we are sharing with them how AI impacts our business and how we can help them close the gaps that they’re looking at. These customers, they really are struggling with 5,000, 10,000, 20,000, you name employees, all of whom have different skill needs and those skills needs are changing. They’re not static. And so they’re looking for a solution that they can partner with not just now but into the future. And I think the road map that we’ve laid out and what we are doing and the product innovation really speaks to the problem that they have and helping them solve that in a very automated, very effective, cost-effective way.
