Udemy (UDMY) ROC % : -16.99% (As of Sep. 2024)

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What is Udemy ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Udemy's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was -16.99%.

As of today (2024-12-15), Udemy's WACC % is 15.73%. Udemy's ROC % is -21.84% (calculated using TTM income statement data). Udemy earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Udemy ROC % Historical Data

The historical data trend for Udemy's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Udemy ROC % Chart

Udemy Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

-42.48

-38.34

-26.98

-38.82

-26.76

Udemy Quarterly Data
	Dec19	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial														-20.67	-24.86	-22.19	-23.62	-16.99

Udemy ROC % Calculation

Udemy's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-111.632 * ( 1 - -3.52% )	/	( (439.991	+	423.686)	/ 2 )
=	-115.5614464	/	431.8385
=	-26.76 %

where

	Invested Capital		(A: Dec. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	737.568	-	69.47	-	( 465.372	-	max(0, 386.907	-	615.014	+	465.372	))
=	439.991

	Invested Capital		(A: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	741.196	-	65.314	-	( 476.936	-	max(0, 380.132	-	632.328	+	476.936	))
=	423.686

Udemy's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	-72.736 * ( 1 - -3.54% )	/	( (443.485	+	443.139)	/ 2 )
=	-75.3108544	/	443.312
=	-16.99 %

where

	Invested Capital		(Q: Jun. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	671.939	-	69.393	-	( 420.923	-	max(0, 408.843	-	567.904	+	420.923	))
=	443.485

	Invested Capital		(Q: Sep. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	608.905	-	60.608	-	( 357.109	-	max(0, 402.854	-	508.012	+	357.109	))
=	443.139

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

Udemy (NAS:UDMY) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Udemy's WACC % is 15.73%. Udemy's ROC % is -21.84% (calculated using TTM income statement data). Udemy earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Udemy ROC % Related Terms

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Udemy Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Education » Udemy Inc (NAS:UDMY) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

UDMY:Mexico 7WH:Germany

Address

600 Harrison Street, 3rd Floor, San Francisco, CA, USA, 94107

Website

https://www.udemy.com

Udemy Inc operates a marketplace platform at the center of a vibrant knowledge network. The Company operates under two operating and reportable segments Consumer and Enterprise, out of which the Enterprise segment derives the maximum revenue. Geographically, the company derives maximum revenue from North America. The company leverages data, technology, and insights for effective learning experiences. It helps individuals and organizations to possess effective skill acquisition and development with flexibility.

Executives

Eren Bali	director	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107
Gregory Scott Brown	officer: President, Udemy Business	C/O BLACKHAWK NETWORK HOLDINGS, INC., 6220 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Sarah Blanchard	officer: Chief Financial Officer	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107
Venu Venugopal	officer: Chief Technology Officer	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107
Kenneth Hirschman	officer: SVP, Operations and GC	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107
Stephanie Stapleton Sudbury	officer: President, Udemy Business	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107
Richard Qiu	officer: President, New Ventures	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107
Prasad Raje	officer: Chief Product Officer	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107
Sohaib Abbasi	director	100 EAST DAVIE STREET, RALEIGH NC 27601
Genefa Murphy	officer: Chief Marketing Officer	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107
Jeffrey Lieberman	director, 10 percent owner	680 FIFTH AVENUE, 8TH FLOOR, NEW YORK NY 10019
Prasad Gune	officer: SVP, Product	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107
Llibert Argerich	officer: SVP, Marketing	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107
Gregg Coccari	director, officer: President, CEO and Chairperson	719 KINGMAN AVENUE, SANTA MONICA CA 90402
Karen Fascenda	officer: Chief People Officer	600 HARRISON STREET, 3RD FLOOR, SAN FRANCISCO CA 94107