Udemy, Inc. Files Amendment No. 1 to 2025 Annual Report: Executive Changes, Incentive Plan Overhaul, and Strategic Shifts

Key Points for Investors

• Amendment Filed to Include Missing Proxy Information: Udemy, Inc. filed Amendment No. 1 to its 2025 Annual Report on Form 10-K/A to provide disclosures required by Items 10-14 (including Directors, Executive Compensation, Security Ownership, and Certain Relationships) that were not previously filed due to the proxy statement not being completed within the SEC’s deadline.
• CEO Transition and Compensation Overhaul: A significant change in Udemy’s leadership occurred during 2025, resulting in a reevaluation and adjustment of the company’s short-term and long-term executive compensation frameworks.
• Revised 2025 Incentive Plan Targets and Strategic Focus: The Compensation Committee lowered revenue and adjusted EBITDA targets in line with revised guidance announced in April 2025, reflecting a strategic repositioning and an emphasis on growth, especially in subscriptions and new AI-focused offerings.
• Inclusion of Strategic Objectives in Incentives: A new short-term incentive plan component was introduced, tying 30% of bonus potential to the achievement of key strategic objectives, including consumer subscription growth and successful AI product launches.
• Clawback and Insider Trading Policies Enhanced: The company has strengthened its clawback and insider trading policies, in alignment with Nasdaq and SEC requirements.
• Updated Outstanding Share Count and Public Float: As of March 31, 2026, Udemy had 145,935,525 shares outstanding, and as of June 30, 2025, the public float was approximately \$778.9 million.
• No Financial Restatements or Corrections Noted: The filing states no correction of errors to previously issued financial statements.

Details and Context for Investors

1. Nature of the Filing

This amendment was filed to provide required Part III information that was not included in the original annual report, due to Udemy not filing its proxy statement within 120 days of year-end. The company clarifies that, aside from these required disclosures and certain cover page updates (including the share count), there are no other changes to the original 10-K. No new financial statements or restatements are included.

2. CEO Transition and its Impact

Udemy underwent a CEO transition during 2025. This leadership change prompted a comprehensive review of both short-term and long-term incentive compensation plans. The Compensation Committee, in response to new strategic priorities set forth by the incoming CEO, restructured the company’s approach to executive pay to better align management incentives with performance, sustainable growth, and shareholder value creation.

3. Overhaul of 2025 Short-Term Incentive Plan

The original 2025 short-term incentive plan was designed with higher revenue and adjusted EBITDA targets. However, following the CEO transition and the company’s revised operational outlook in April 2025, the Compensation Committee:

• Lowered revenue and adjusted EBITDA goals to reflect updated company guidance.
• Rebalanced the weighting of performance metrics: Revenue and adjusted EBITDA were each reduced to 35% (from 50%), and a new 30% weighting was assigned to strategic objectives (notably, consumer subscription growth and AI product launches).
• Set the following performance ranges for the adjusted plan:
  • Revenue: Threshold \$783.3M, Target \$803.5M, Maximum \$830.6M
  • Adjusted EBITDA: Threshold \$82.0M, Target \$88.7M, Maximum \$104.0M
• Payouts range from 25% (threshold) to 200% (maximum) of target, using linear interpolation between points.
• Specific strategic objective targets are not publicly disclosed due to competitive sensitivity, but are described as requiring “meaningful acceleration” in subscriptions and a successful AI product launch.

4. Long-Term Incentive Plan

The long-term incentive framework was not altered for 2025, with performance metrics focused on annual recurring revenue (ARR), consumer net billings, and adjusted EBITDA. These awards are delivered in the form of restricted stock units (RSUs) and performance stock units (PSUs), settling in Udemy common stock.

5. Adoption and Disclosure of Clawback and Trading Policies

Udemy has formalized a clawback policy in compliance with Nasdaq listing requirements, mandating the recovery of incentive-based compensation in the event of an accounting restatement, regardless of executive fault. The company also maintains a robust insider trading policy that prohibits:

• Short sales and trading in derivatives
• Pledging or margining Udemy stock
• Hedging Udemy stock

These policies are publicly available and filed as exhibits to the report.

6. Shareholder and Governance Practices

• Udemy has implemented stock ownership guidelines for executives (CEO: 5x salary; other executives: 1x salary) to ensure alignment with shareholder interests.
• The company maintains a fully independent Compensation Committee and regularly solicits shareholder feedback on executive compensation, including holding an annual “say-on-pay” vote.
• There are no gross-up provisions for change in control; instead, “net best” limitations apply.
• Option repricing without shareholder approval is prohibited under the 2021 Equity Incentive Plan.

7. Financial Condition, Reporting Status, and Compliance

• Udemy is classified as a Large Accelerated Filer and is subject to SOX 404(b) auditor attestation requirements.
• The company confirms it is not a shell company, is current in its SEC reporting, and that all required filings have been made.
• No restatements or error corrections were reported in this amendment.

8. Share Count and Public Float Update

• As of March 31, 2026, Udemy had 145,935,525 shares outstanding.
• As of June 30, 2025, the public float was approximately \$778.9 million.

Potential Share Price Impacts and Shareholder Considerations

• Executive Leadership and Incentive Realignment: The strategic overhaul of the incentive program, especially the addition of AI and consumer subscription goals, signals a shift in Udemy’s growth focus that may influence investor sentiment regarding the company’s future trajectory.
• Lowered 2025 Performance Targets: The reduction of revenue and adjusted EBITDA targets to match revised guidance could affect expectations for 2025 financial results, potentially impacting share valuation, especially if investors were not previously aware of the extent of these changes.
• Emphasis on Pay-for-Performance: The move to tie executive pay even more directly to performance and strategic milestones may be viewed positively by governance-focused investors.
• No Restatements or Corrections: The absence of financial restatements is reassuring for shareholders concerned about accounting risks.

Conclusion

This amendment, while primarily technical and related to SEC compliance, reveals important changes in Udemy’s executive incentives and strategic priorities. The focus on AI offerings and subscription growth, coupled with lowered 2025 financial targets and enhanced governance policies, are material developments that investors should consider when assessing Udemy’s near-term outlook and long-term shareholder value proposition.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review the full SEC filings and consult with professional advisors before making any investment decisions.

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