2U, Inc. (TWOU) SEC Filing 10-K Annual Report for the fiscal year ending Saturday, December 31, 2022

Exhibit 99.1

2U Reports Strong Results for Fourth Quarter and Full-Year 2022

LANHAM, Md. — February 2, 2023 — 2U, Inc. (Nasdaq: TWOU), a leading online education platform company, today reported financial and operating results for the quarter and full-year ended December 31, 2022.

Results for Fourth Quarter 2022 compared to Fourth Quarter 2021

Non-GAAP Results for Fourth Quarter 2022 compared to Fourth Quarter 2021

Results for Full-Year 2022 compared to Full-Year 2021

Non-GAAP Results for Full-Year 2022 compared to Full-Year 2021

Recent Developments

In January of 2023, the company significantly strengthened its credit profile by extending near-term maturities, and reducing secured debt by $187 million. Additional information about these transactions can be found in the current report on Form 8-K filed by the company on January 9, 2023 and related filings with the Securities and Exchange Commission.

On Tuesday, March 21, 2023, the company will host an Investor Day at the Nasdaq MarketSite in New York City. The 2U leadership team will discuss the platform strategy and plans to create shareholder value. To pre-register, please click here.

Executive Commentary

“Platforms are the future of education and we are becoming increasingly confident in our platform strategy,” said 2U Co-Founder and CEO Christopher “Chip” Paucek. “We’re attracting new partners and content, driving revenue growth from enterprise clients, radically improving our marketing efficiency, and delivering significant EBITDA growth. We now expect our Alternative Credential Segment to contribute to our profitability for the first time in 2023, while continuing to deliver life-changing outcomes for students.”

Paul Lalljie, 2U’s Chief Financial Officer, added, “Our full year results demonstrate early returns from realigning our organization and cost structure to support our strategy while generating higher profit margins and cash flows. We delivered $125.1 million of adjusted EBITDA, an increase of 88% when compared with the prior year, and positive unlevered free cash flow. Looking to 2023, we expect macroeconomic challenges to continue as we execute our plans to deliver modest revenue growth, adjusted EBITDA growth of approximately 26% and positive free cash flow.”

Discussion of 2022 Results

Revenue for the fourth quarter totaled $236.0 million, a 3% decrease from $243.6 million in the fourth quarter of 2021. Revenue from the Degree Program Segment decreased $15.3 million, or 10%, due to a decrease in full course equivalent (FCE) enrollments of 9% and a 1% decrease in average revenue per FCE enrollment. Revenue from the Alternative Credential Segment increased $7.7 million, or 8%, primarily due to an increase in FCE enrollments of 15%, partially offset by an 11% decrease in average revenue per FCE enrollment.

Revenue for the year totaled $963.1 million, a 2% increase from $945.7 million in 2021. Total revenue includes $39.2 million from legacy edX offerings. Revenue from the Degree Program Segment decreased $20.7 million, or 3%, due to a 2% decrease in average revenue per FCE enrollment and a decrease in FCE enrollments of 2%. Revenue from the Alternative Credential Segment increased $38.1 million, or 11%, primarily due to legacy edX offerings and an increase in FCE enrollments of 9%, partially offset by a 5% decrease in average revenue per FCE enrollment.