Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Business Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
The Department of Justice probing Netflix tactics admit the Warner Brothers Discovery deal investigation. This according to The Wall Street Journal, the Justice Department investigating whether Netflix engaged in anti competitive taxes. It's probing the streaming network's proposed acquisition of Warner Discovery Studios in HBO Max streaming service. The Department looking at whether Netflix's planned Warner deal could enrich or in trench its market power or lead to monopoly in the future.
It's also reviewing Paramount's proposed acquisition.
Yeah, stock off it's earlier high. Is it just still up though? About five ten percent here in the Friday trade. Hey, we want to get to Coursera company did report earnings last night, forecast revenue for twenty twenty six, with the guidance beating the average analyst Estmate stock has swung quite a bit today, up about seven percent at its highs
off more than four four percent at its lows. Key Bank and RBC book lowering their price targets on the stock today and we just mentioned about this Warner Brothers Discovery waiting to get this deal done. There is also an M and A story to Coursera as well. It is about a one billion dollar market cap company, online education company. It is down about nineteen percent year to date, twelve percent. Tim of the float is short.
I want to bring in Greg Hart, president and CEO. Of course, Sarah Greg joins us from San Francisco. Greg, I want to start with the merger. Carol mentioned it in December, an all stock merger between Coursera and you. To me, what is the status of that right now? We understand it's going to close in the second part of the year. The integration, how does it go? What does it mean in terms of the customer and user experience? And who's the boss?
Thank you Tim for the question. So we are going through the regulatory approval process right now. Nothing to share on that front, but we're moving through the paces and then we'll you know, hope to move through that and then go through shareholder approval. In terms of who's the boss,
first of all, the customer is always the boss. In terms of the actual governance of the company, I will be the CEO of the combined company, and we are excited about that combination because of the opportunity to bring together, you know, two businesses that are really quite complementary. You to me, the companies are roughly the same size in revenue, So the combined revenue of the companies would be about one point five billion dollars for twenty twenty five with
about ten percent adjusted ebitdaal margin's free synergies. We also announced at signing that we would deliver one hundred and fifteen million dollars of Synergy's post clothes within the first two years, and so a nice improvement in the operating margin that we have as a combined company. We are focused as we go through the planning process on exactly
what that integrated company and platform will look like. So how do we think about pricing and packaging and promotions, of course, how do we think about the leadership team, and then how do we bring the companies together to really drive not only you know, better margins through the synergies, but also really over time, drive much higher revenue growth and do a better job of addressing the massive market opportunity in front of the companies.
Greg there there have been many examples of mergers that have been announced that haven't actually gone through for a whole multitude of reasons, some of them in the regulatory some of them have involved other factors. What happens if this doesn't go through.
Well, I'm very confident that it will. I mean, we operate in the education space, which is a massive space, you know, two trillion plus dollars. That encompasses physical education so day through twelve universities, vocational schools. It encompasses the online sector that we have happened to be a part of, and you to me also is a part of. And then of course it encompasses all the other ways that people learn today and increasingly that is through things like
llms or YouTube or TikTok. We believe we have a very differentiated offering, but we are a very very small player within that massive space, and we believe that the combination actually delivers more value to every one of our constituents,
to our learners. They'll get access to more content, not only the three hundred and seventy five different university and industry partners that Coursera has, but the eighty five thousand plus subject matter experts that you to mese content creator community has and so it'll bring more choice, more learning opportunity. It'll be better for our content creators because they'll have access to a worldwide learner audience that's approaching three hundred
million registered learners across the two companies. And it's better for our enterprise customers because we're able to deliver them the breadth of that content coming from that content creator network across You to Me and Coursera.
Hey, listen. One of the things, Well, first of all, I have to just follow up on the deal, the combination with you and you to me? Is it still though you said you're pretty confident about regulatory greg so maybe still on track to close this deal in the second part of twenty twenty six.
Yes, we've heard nothing that would you change our belief that it will close, you know, by the second half of twenty twenty six, and remain confident in getting all the regulatory approvals we need to do.
So.
One of the things I thought that's interesting, I always think about your business. You mentioned university industry partners You've got these subject experts. How are people most using it? Is it your corporate partnerships where people want retraining for their employees. Is it people on their own? Is it people who are just interested in about different topics like tell us where the growth is? Is it all of it or certain parts of it?
Fantastic question, Kurl. So our business this of course, Sarah and independent company. We are two thirds consumer, one third enterprise from a revenue perspective. You to me is the inverse, they are two thirds enterprise one third consumer. For both companies, there is a huge focus on and growth in technology and specifically AI right now, and so for Coursera, last year we saw enrollments in gen AI related content at
a rate of fifteen enrollments per minute. In twenty twenty four that was only eight enrollments per minute, and so a real burgeoning interest that I believe will continue in twenty twenty six as well. And we are really focused on delivering not just learning, but delivering skills so that
people can't advance their careers. Eighty six percent of the learners who come to Coursera come here to advance their careers, and so we are very focused on delivering them skills that they can use to advance their careers and that they can demonstrate, you know, real mastery of as they are in the workforce, Hey.
Greg, really quickly thirty seconds are people in IT train and then that's it. You don't see them again. Or how much of it is return business that the platform is sticking in there constantly coming back to learn more and forgive me only about twenty five seconds.
Well more than fifty percent of our consumer revenue is around Course Sarah Plus, which is our monthly or annual subscription. It's the best value for learners because they get access to all of that content, and those learners tend to stay, obviously for longer than a single course learner might.
Cool stuff as always, stay in touch, love talking with you, Greg Hart, President and CEO of Course Sarah joining us from the West Coast,