Udemy, Inc.UDMY

Udemy, Inc. Commitments Disclosure

10-KFiled Feb 19, 20262 min read
8. Commitments and contingencies
Noncancellable purchase commitments— The Company has noncancellable contractual commitments related to third-party cloud infrastructure providers, software subscriptions, and other service agreements to support operations in the ordinary course of business. As of December 31, 2025, future noncancellable commitments with remaining terms in excess of one year under these arrangements were as follows (in thousands):

202616,215 
20279,656 
20281,999 
Total purchase commitments (1)
$27,870 
(1) Does not include $15.1 million of non-cancelable contractual commitments for a third-party cloud infrastructure provider as of December 31, 2025, that the Company had committed to spend during the fiscal year ending December 31, 2026, as the remaining term of the agreement was not in excess of one year.
Indemnification— The Company enters into indemnification provisions under agreements with other parties in the ordinary course of business, including certain business partners, investors, contractors, and the Company’s officers, directors, and certain employees. The Company has agreed to indemnify and defend the indemnified party’s claims and related losses suffered or incurred by the indemnified party resulting from actual or threatened third-party claims because of the Company’s activities or, in some cases, non-compliance with certain representations and warranties made by the Company. In general, the Company does not record any liability for these indemnities in the accompanying consolidated balance sheets as the amounts cannot be reasonably estimated and are not considered probable. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. To date, losses recorded in the Company’s consolidated statements of operations in connection with the indemnification provisions have not been material.
Litigation— From time to time, in the ordinary course of business, the Company is subject to legal proceedings, claims, investigations, and other proceedings, including claims of alleged infringement of third-party patents and other intellectual property rights, and commercial, employment, and other matters. In accordance with generally accepted accounting principles, the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least annually and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. The outcome of such litigation is not expected to have a material effect on the financial position, results of operation and cash flows of the Company. The Company has recorded an immaterial amount related to all outstanding litigation matters in the accrued expenses and other current liabilities caption of the accompanying consolidated balance sheets as of December 31, 2025, and December 31, 2024.

Historical Timeline

Fiscal YearFiled
2025Feb 19, 2026Showing above
2024Feb 19, 2025
2023Feb 26, 2024
2021Mar 25, 2022

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

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