COUR - Let's Give Coursera's Q4 An A-Minus Grade

• Despite discouraging price action, the 21Q4 print adds to evidence this is a durable grower. Full CY2021 revenue growth of +41% shifts to CY2022 guide (and long-term trajectory) of +30%.
• All three segments (consumer, enterprise, and degrees) continue to bolster a platform which has no glaring weaknesses. The gradual, predictable shift in mix contributed to a 62% gross margin.
• Current expenses (including EBITDA guide) should concern short-term investors, but expect S&M expense (as a percentage) to gradually fade with leverage.
• However, employee stock option (ESO) dilution is excessive and is now a yellow flag (hence the minus in my A-minus grade).
• My thesis is unchanged from last year: Coursera will win its space, and an utterly ignored asset will eventually secure its moat: a data-driven skills graph that makes this one of my favorite data science (AI) companies.

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