Udemy has made online learning work like a large digital marketplace. Instead of employing teachers to create every course, it allows independent instructors to upload courses on programming, business, marketing, design, personal development and thousands of other subjects.
Individual learners can purchase one course or pay for a subscription covering a wider collection. Companies use Udemy Business to provide employee training across technical, professional and leadership skills.
This gives Udemy two connected businesses. Its consumer marketplace attracts learners and encourages instructors to create new content. The strongest courses can then be included in Udemy’s enterprise and subscription collections. Udemy earns money from course purchases, individual subscriptions, corporate learning plans and additional training services.
Udemy Company Quick Overview
| Particular | Details |
| Company | Udemy, Inc. |
| Founded | 2010 |
| Founders | Eren Bali, Oktay Caglar and Gagan Biyani |
| Headquarters | San Francisco, California |
| President and CEO | Hugo Sarrazin |
| Business type | Online learning marketplace and enterprise skills platform |
| Main customers | Individual learners, companies and professional teams |
| Marketplace size | More than 290,000 courses |
| Languages available | 78 |
| Global learner base | Nearly 84 million |
| 2025 total revenue | $789.84 million |
| 2025 net income | $3.81 million |
Udemy was incorporated in January 2010 and is headquartered in San Francisco. Its platform had nearly 84 million learners at the end of 2025, with more than 290,000 courses available in 78 languages. Hugo Sarrazin became the company’s President and CEO in March 2025.
What Is Udemy’s Business Model?
Udemy follows a two-sided marketplace and subscription business model. On one side are instructors who create courses. On the other side are learners and companies looking for practical skills.
Instructors can upload free or paid courses without paying a normal publishing fee. Udemy provides video hosting, payment collection, course discovery, promotional tools, customer support and access to a global audience.
When a course is sold, the payment is shared between Udemy and the instructor. The percentage retained by each side depends on how the learner discovered the course.
Udemy also selects suitable courses for subscription collections. Companies and individual subscribers pay for access to these collections, while participating instructors receive payments based mainly on how much learners use their content.
Udemy reported two financial segments in 2025. Udemy Business generated 66% of total revenue, while its consumer marketplace generated the remaining 34%.
How Does Udemy Make Money?
1. Individual Course Purchases
Learners can purchase access to individual courses through Udemy’s marketplace. Common subjects include software development, data science, artificial intelligence, design, business management, marketing and language learning.
The learner pays the displayed price, after which applicable taxes, app-store charges and refunds are deducted. The remaining amount is divided between Udemy and the instructor.
When a learner purchases through an instructor’s coupon or referral link, the instructor currently receives 97% of the net amount. When Udemy generates the sale through its marketplace, advertisements or normal browsing, the instructor receives 37%.
This means Udemy keeps a much larger share when it attracts the customer itself. The larger share helps cover advertising, technology, payment processing and platform operations.
2. Consumer Subscriptions
Udemy offers subscription plans that give individual users access to a selected collection of courses. Instead of purchasing each course separately, the learner pays a recurring monthly or annual fee.
Subscriptions create more predictable revenue because customers continue paying while their memberships remain active. They may also encourage learners to explore several subjects without worrying about the price of each course.
Udemy is gradually placing greater importance on subscriptions rather than depending only on one-time course sales. Its consumer subscription revenue increased by 44% to $44.5 million in 2025, while paid consumer subscribers more than doubled to 343,000.
The complete Udemy marketplace is not necessarily included in every subscription. Udemy selects courses according to quality, demand, ratings and relevance.
3. Udemy Business Subscriptions
Udemy Business is the company’s largest revenue source. Businesses purchase subscriptions so that employees can access a selected collection of professional courses.
Companies may use the platform for:
- Technical training
- Artificial intelligence skills
- Software certifications
- Leadership development
- Communication and management training
- Employee reskilling
- Compliance and workplace education
Enterprise contracts normally run for one year or multiple years and are generally billed quarterly or annually in advance. Udemy then recognises the revenue over the subscription period.
Udemy Business generated $524.1 million in 2025, representing about 66% of company revenue. This was considerably higher than the $265.8 million generated by the consumer segment.
4. Team Plan Subscriptions
Smaller organisations can purchase the Udemy Business Team Plan. It is designed for teams that need employee training without negotiating a large enterprise contract.
The Team Plan is priced according to the number of users and is billed annually. It includes a selected course collection, certification preparation, practice tests, coding exercises, artificial intelligence tools and learning analytics.
Udemy publicly lists the Team Plan at $30 per user each month when billed annually, although pricing and included features may change. This self-service plan allows Udemy to reach start-ups and smaller companies without requiring a lengthy sales process.
5. Enterprise Plans and Premium Add-Ons
Larger companies can purchase customised Enterprise Plans. The price depends on the number of employees, course collections, support requirements and additional features selected.
Udemy can earn more by selling add-ons such as:
- Udemy Business Pro
- Leadership Academy
- Certification preparation
- Skills assessments
- Hands-on laboratories
- Artificial intelligence learning packages
- Advanced reporting and analytics
These services help companies measure employee progress and create structured training programmes instead of simply providing access to a library of videos.
Enterprise subscriptions generally offer stronger margins than individual course purchases because instructor payments represent a smaller percentage of subscription revenue.
6. Instructor Subscription Revenue Sharing
Udemy pays instructors whose courses are included in Udemy Business and other subscription collections. Payments are based mainly on learner engagement rather than the number of enrolments alone.
From January 2026, Udemy allocates 15% of eligible monthly subscription revenue to the instructor payment pool. Each instructor receives a share based on the proportion of total course-consumption minutes generated by their content.
Udemy retains the remaining subscription revenue to cover technology, sales, customer support and other expenses. This structure can produce better margins than individual course sales.
7. Reseller and Distribution Partnerships
Udemy works with resellers and commercial partners in selected markets. These businesses sell Udemy courses or enterprise plans through their own customer networks.
Resellers can help Udemy enter countries where local language, sales relationships or payment systems are important. They may retain part of the transaction amount, while Udemy earns the remaining revenue under the partnership agreement.
Udemy has stated that strategic resellers are especially important in some international markets, including Japan.
8. One-to-One Coaching Services
Udemy has introduced Connect 1:1, which allows eligible instructors to offer individual coaching sessions.
Customers pay to book a session, and Udemy processes the transaction and provides the platform. For completed sessions, instructors currently receive 80% of the net amount, while Udemy retains 20%.
This creates another revenue stream beyond recorded video courses and allows instructors to offer personalised assistance at a higher price.
Udemy’s Major Operating Costs
Instructor payments are one of Udemy’s largest direct costs. The company also pays for video hosting, cloud infrastructure, payment processing, mobile-app fees and customer support.
Its major expenses include:
- Instructor revenue sharing
- Sales and marketing
- Employee salaries and commissions
- Platform development and maintenance
- Artificial intelligence tools
- Customer support
- Payment and app-store charges
- Reseller fees
- Legal and administrative expenses
In 2025, Udemy spent $271.4 million on cost of revenue and $522.6 million on operating expenses. Sales and marketing was its largest operating expense at $326.5 million. The company reported a 66% gross margin and net income of approximately $3.8 million.
Why Udemy’s Model Can Be Profitable
Udemy does not have to create every course itself. Independent instructors provide most of the content, reducing the need for large internal production teams.
A successful course can be sold to thousands of learners without being recorded again. Udemy can also distribute the same content through individual purchases, consumer subscriptions and corporate plans.
The enterprise business provides recurring revenue and higher margins. Long-term contracts also make revenue more predictable than one-time course purchases.
The company’s adjusted EBITDA reached $95.3 million in 2025, while free cash flow was positive at $70 million.
Main Challenges in Udemy’s Business Model
Course quality can vary because thousands of independent instructors publish content. Udemy must use reviews, ratings and quality checks to help learners find reliable courses.
The platform also competes with Coursera, LinkedIn Learning, Skillshare, YouTube and specialised training providers.
Technology courses can become outdated quickly. Instructors must update lessons when software, certification requirements and professional practices change.
Udemy must also balance instructor earnings with company profitability. Reducing instructor revenue shares may improve margins but could make the platform less attractive to experienced course creators.
FAQs
Q1. Does Udemy create all the courses itself?
No. Most courses are created by independent instructors. Udemy hosts, markets and distributes the content while sharing eligible revenue with the instructors.
Q2. Does a purchased Udemy course expire?
An individual course purchase generally provides a non-exclusive lifetime licence to access the course through Udemy, subject to the platform’s terms and its continued right to offer that content.
Q3. Why does the price of a Udemy course change frequently?
Prices may vary because of promotions, instructor coupons, local pricing, currency conversion, taxes and purchases made through mobile app stores.
Q4. Is a Udemy certificate equal to a university degree?
No. A completion certificate shows that the learner finished an eligible Udemy course. It is not normally equivalent to a university degree or formal academic qualification.
Q5. Do instructors earn money when someone watches a free course?
Free-course enrolments do not normally generate direct purchase revenue. However, free courses can help instructors build an audience and encourage learners to purchase paid content later.
Conclusion
Udemy makes money mainly through Udemy Business subscriptions, individual course purchases and consumer subscription plans. Team subscriptions, enterprise add-ons, reseller partnerships and individual coaching provide additional income.
Its marketplace model allows instructors to create the content while Udemy manages technology, payments, customer discovery and corporate sales.
Udemy’s long-term success depends on attracting skilled instructors, maintaining course quality and increasing recurring subscription revenue. The company must also control marketing and technology costs while ensuring that instructors continue to benefit from publishing on the platform.
