9. COMMITMENTS AND CONTINGENCIES
Purchase Obligations
Our purchase obligations primarily relate to a third-party cloud infrastructure agreement, subscription arrangements, and service agreements used to facilitate our operations. As of December 31, 2025, we had no material firm purchase commitments in excess of one year. On January 14, 2026, we entered into a $10.5 million purchase commitment for cloud infrastructure capacity for a period of three years ending on December 31, 2028.
Legal Proceedings
From time to time, we may be subject to legal proceedings, as well as demands, claims, and threatened litigation. The outcomes of legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. Regardless of the outcome, litigation can have an adverse impact on our business because of defense and settlement costs, diversion of management resources, and other factors. Other than the matters described below, we are not currently party to any legal proceeding that we believe, as of the filing of this Annual Report on Form 10-K, could have a material adverse effect on our business, operating results, cash flows, or financial condition should such litigation or claim be resolved unfavorably.
Privacy Arbitration Matters
Law firms representing a significant number of purported claimants have threatened to file or filed arbitration demands for alleged violations of the Video Privacy Protection Act (“VPPA”) and allege, among other things, that without consent or knowledge of the plaintiffs, Coursera disclosed the video viewing history and certain other information of the plaintiffs to a third-party company and made similar disclosures without the knowledge or consent of other unidentified users. Certain firms also claim violations of the Electronic Communications Privacy Act, the California Invasion of Privacy Act, and/or various state wiretapping and unfair or deceptive practices laws. Under the VPPA, each claimant may be entitled to recover damages for each alleged violation of the VPPA, as well as punitive damages, attorneys’ fees and costs, and equitable relief. Without admitting to any liability or wrongdoing, we settled claims with a substantial portion of these claimants in the fourth quarter of 2024 for $4.7 million, for which we recovered the full amount with insurance proceeds.
Additionally, we entered into settlement agreements with the majority of the remaining claimants in May 2025 for $4.5 million, which we paid in July 2025. The remaining arbitration claims are not considered material. While we maintain insurance policies intended to provide coverage for the aforementioned claims and have notified our insurance carriers about these claims, there can be no assurance regarding if or to what extent our insurance may cover such claims or any future claims.
Legal fees related to these matters were insignificant during the year ended December 31, 2025 and $1.5 million during the year ended December 31, 2024.
Indemnifications
In the normal course of business, we enter into contracts and agreements that contain a variety of representations and warranties and provide for the potential of general indemnification obligations. Our exposure under these agreements is unknown because it involves future claims that may be made against us but have not yet been made. To date, we have not paid any material claims and have not been required to defend any actions related to our indemnification obligations; however, we may record charges in the future as a result of these indemnification obligations. In addition, we have indemnification agreements with certain of our directors, executive officers, and other employees that require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service with Coursera. The terms of such obligations may vary.