Last10K.com

2U, Inc. (TWOU) SEC Filing 8-K Material Event for the period ending Wednesday, February 9, 2022

2U, Inc.

CIK: 1459417 Ticker: TWOU

Exhibit 99.1

2U Reports Results for Full-Year and Fourth Quarter 2021

Delivers revenue growth of 22% for the full year

LANHAM, Md. — February 9, 2022 — 2U, Inc. (Nasdaq: TWOU), a global leader in education technology, today reported financial and operating results for the full-year and fourth quarter ended December 31, 2021.

Results for Full-Year 2021 Compared to Full-Year 2020

 

 

Revenue increased 22% to $945.7 million

 

 

Degree Program Segment revenue increased 22% to $592.3 million

 

 

Alternative Credential Segment revenue increased 23% to $353.4 million

 

 

Net loss improved $21.7 million to $194.8 million, or $2.61 per share

Non-GAAP Results for Full-Year 2021 Compared to Full-Year 2020

 

 

Adjusted EBITDA improved $50.5 million to $66.6 million

 

 

Adjusted net loss improved $16.1 million to $47.6 million, or $0.64 per share

Results for Fourth Quarter 2021 Compared to Fourth Quarter 2020

 

 

Revenue increased 13% to $243.6 million

 

 

Degree Program Segment revenue increased 17% to $152.4 million

 

 

Alternative Credential Segment revenue increased 8% to $91.2 million

 

 

Net loss increased $29.6 million to $67.3 million, or $0.89 per share

Non-GAAP Results for Fourth Quarter 2021 Compared to Fourth Quarter 2020

 

 

Adjusted EBITDA improved $2.2 million to $21.0 million

 

 

Adjusted net loss increased $10.8 million to $14.9 million, or $0.20 per share

“Our strong 2021 results were led by healthy revenue growth in both our degree and alternative credential business, with demand for our undergraduate offerings particularly compelling,” said Christopher “Chip” Paucek, 2U’s Co-Founder and Chief Executive Officer. “With the closing of the edX transaction in November 2021, we are laser focused on transforming 2U into the leading global education platform company, positioned to drive powerful societal impact and superior value for all our stakeholders, by delivering learners affordable, flexible, and career-relevant online education offerings, while helping universities and businesses strengthen their institutions for the digital age.”

Paul Lalljie, 2U’s Chief Financial Officer, added, “We ended 2021 nicely, capping off a strong year. We closed out the year with double-digit revenue growth and continued margin improvement. Additionally, we completed our transformational acquisition of edX in the fourth quarter and its successful integration is a key priority for us. Our outlook for 2022 reflects a disciplined growth strategy and continued progress towards profitability, which is prudent given the digital marketing environment. With the addition of edX and our transition to a platform company, we have established a strategic and financial framework for achieving our mid-term goals and creating shareholder value.”

Discussion of 2021 Results

Revenue for the year totaled $945.7 million, a 22% increase from $774.5 million in 2020. This increase was driven by a 23% increase in Alternative Credential Segment revenue to $353.4 million, primarily due to an increase in the average revenue per full course equivalent (“FCE”) enrollment of 15% resulting from a higher proportion of boot camp offerings in operation, and a 22% increase in Degree Program Segment revenue to $592.3 million, primarily due to growth in FCE enrollments of 39,102, or 20%. On a year-over-year basis, total FCE enrollments increased 16% to 323,329.

Revenue for the fourth quarter totaled $243.6 million, a 13% increase from $215.3 million in the fourth quarter of 2020. This increase was driven by a 17% increase in Degree Program Segment revenue to $152.4 million, primarily due to an increase in the average revenue per FCE enrollment of 16%, and an 8% increase in Alternative Credential Segment revenue to $91.2 million, primarily due to an increase in the average revenue per FCE enrollment of 13%. Total average revenue per FCE enrollment increased by 14% over the prior year period to $3,041.

Costs and expenses for the year totaled $1.1 billion, a 17% increase from $953.5 million in 2020. This increase was primarily driven by increased operational expense to support revenue growth, including the acquisition of edX.

Costs and expenses for the fourth quarter totaled $293.3 million, a 20% increase from $245.3 million in the fourth quarter of 2020. This increase was primarily driven by increased operational expense to support revenue growth, including the acquisition of edX.


As of December 31, 2021, the company’s cash, cash equivalents, and restricted cash totaled $249.9 million, a decrease of $269.0 million from $518.9 million as of December 31, 2020. Cash used in operating activities of $18.1 million and cash used in investing activities of $793.4 million for the year ended December 31, 2021 were partially offset by cash provided by financing activities of $544.9 million.

Business Outlook for Fiscal Year 2022

The company provided updated guidance for the full-year 2022 for the following metrics:

 

 

Revenue to range from $1.05 billion to $1.09 billion, representing growth of 13% at the midpoint

 

 

Net loss to range from $235 million to $215 million

 

 

Adjusted EBITDA to range from $70 million to $90 million, representing growth of 20% at the midpoint

Non-GAAP Measures

To provide investors and others with additional information regarding 2U’s results, the company has disclosed the following non-GAAP financial measures: adjusted EBITDA (loss), unlevered free cash flow, adjusted net income (loss), and adjusted net income (loss) per share. The company has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. The company defines adjusted EBITDA (loss) as net income or net loss, as applicable, before net interest income (expense), other income (expense), net, taxes, depreciation and amortization expense, deferred revenue fair value adjustments, transaction costs, integration costs, restructuring-related costs, stockholder activism costs, certain litigation-related costs, consisting of fees for certain non-ordinary course litigation and other proceedings, impairment charges, losses on debt extinguishment, and stock-based compensation expense. The company defines unlevered free cash flow as net cash provided by (used in) operating activities, less capital expenditures, payments to university clients, certain non-ordinary cash payments, and cash interest payments on debt. The company defines adjusted net income (loss) as net income or net loss, as applicable, before other income (expense), net, acquisition-related gains or losses, deferred revenue fair value adjustments, transaction costs, integration costs, restructuring-related costs, stockholder activism costs, certain litigation-related costs, consisting of fees for certain non-ordinary course litigation and other proceedings, impairment charges, losses on debt extinguishment, and stock-based compensation expense. Adjusted net income (loss) per share is calculated as adjusted net income (loss) divided by diluted weighted-average shares of common stock outstanding for periods that result in adjusted net income, and basic weighted-average shares outstanding for periods that result in an adjusted net loss. Some of the adjustments described in the definitions of adjusted EBITDA (loss), unlevered free cash flow, and adjusted net income (loss) may not be applicable in any given reporting period and they may vary from period to period.

The company’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, to understand cash that is generated by or available for operational expenses and investment in the business after capital expenditures, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate the company’s financial performance. Management believes these non-GAAP financial measures reflect the company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in the company’s business as they exclude expenses that are not reflective of ongoing operating results. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the company’s operating results and prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.

The use of adjusted EBITDA (loss), unlevered free cash flow, adjusted net income (loss), and adjusted net income (loss) per share measures has certain limitations, as they do not reflect all items of income and expense that affect the company’s operations. The company compensates for these limitations by reconciling the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review the company’s financial information in its entirety and not rely on a single financial measure.


Conference Call Information

 

What:    2U’s fourth quarter and full-year 2021 financial results conference call
When:    Wednesday, February 9, 2022
Time:    4:30 p.m. ET
Live Call:    (833) 921-1673
Conference ID #:    4581712
Webcast:    investor.2U.com

About 2U, Inc. (Nasdaq: TWOU)

For more than a decade, 2U, Inc. has been the digital transformation partner of choice to great non-profit colleges and universities delivering high-quality online education at scale. As the parent company of edX, a leading global online learning platform, 2U provides over 42 million learners with access to world-class education in partnership with more than 230 colleges, universities, and corporations. Our people and technology are powering more than 3,600 digital education offerings — from free courses to full degrees — and helping unlock human potential. To learn more: visit 2U.com.


Cautionary Language Concerning Forward-Looking Statements

This press release contains forward-looking statements regarding 2U, Inc.’s future business expectations, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements regarding future results of operations and financial position of 2U, including financial targets, business strategy, and plans and objectives for future operations, are forward-looking statements. 2U has based these forward-looking statements largely on its estimates of its financial results and its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs as of the date of this press release. The company undertakes no obligation to update these statements as a result of new information or future events. These forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from the results predicted, including, but not limited to:

 

 

trends in the higher education market and the market for online education, and expectations for growth in those markets;

 

 

the acceptance, adoption and growth of online learning by colleges and universities, faculty, students, employers, accreditors and state and federal licensing bodies;

 

 

the impact of competition on the company’s industry and innovations by competitors;

 

 

the company’s ability to comply with evolving regulations and legal obligations related to data privacy, data protection and information security;

 

 

the company’s expectations about the potential benefits of its cloud-based software-as-a-service technology and technology-enabled services to university clients and students;

 

 

the company’s dependence on third parties to provide certain technological services or components used in its platform;

 

 

the company’s expectations about the predictability, visibility and recurring nature of its business model;

 

 

the company’s ability to meet the anticipated launch dates of its degree programs, executive education offerings and boot camps;

 

 

the company’s ability to acquire new university clients and expand its degree programs, executive education offerings and boot camps with existing university clients;

 

 

the company’s ability to successfully integrate the operations of its acquisitions, including the edX acquisition, to achieve the expected benefits of its acquisitions and manage, expand and grow the combined company;

 

 

the company’s ability to refinance its indebtedness on attractive terms, if at all, to better align with its focus on profitability;

 

 

the company’s ability to service its substantial indebtedness and comply with the covenants and conversion obligations contained in the indenture governing its convertible senior notes and the term loan agreement governing its term loan facility;

 

 

the company’s ability to generate sufficient future operating cash flows from recent acquisitions to ensure related goodwill is not impaired;

 

 

the company’s ability to execute its growth strategy in the international, undergraduate and non-degree alternative markets;

 

 

the company’s ability to continue to recruit prospective students for its offerings;

 

 

the company’s ability to maintain or increase student retention rates in its degree programs;

 

 

the company’s ability to attract, hire and retain qualified employees;

 

 

the company’s expectations about the scalability of its cloud-based platform;

 

 

potential changes in regulations applicable to the company or its university clients;


 

the company’s expectations regarding the amount of time its cash balances and other available financial resources will be sufficient to fund its operations;

 

 

the impact and cost of stockholder activism;

 

 

the impact of any natural disasters or public health emergencies, such as the coronavirus disease 2019 (“COVID-19”) pandemic;

 

 

the company’s expectations regarding the effect of the capped call transactions and regarding actions of the option counterparties and/or their respective affiliates; and

 

 

other factors beyond the company’s control.

These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, and other SEC filings. Moreover, 2U operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for 2U management to predict all risks, nor can 2U assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements 2U may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated.

Investor Relations Contact: Parth Patel, 2U, Inc., investorinfo@2U.com

Media Contact: Glenda Felden, 2U, Inc., media@2U.com


2U, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

 

     December 31,
2021
    December 31,
2020
 
     (unaudited)        

Assets

    

Current assets

    

Cash and cash equivalents

   $ 232,932     $ 500,629  

Restricted cash

     16,977       18,237  

Accounts receivable, net

     67,287       46,663  

Other receivables, net

     29,439       1,076  

Prepaid expenses and other assets

     47,217       38,277  
  

 

 

   

 

 

 

Total current assets

     393,852       604,882  

Other receivables, net, non-current

     21,568       24,332  

Property and equipment, net

     48,650       52,734  

Right-of-use assets

     76,841       60,785  

Goodwill

     824,539       415,830  

Intangible assets, net

     675,523       312,770  

Other assets, non-current

     68,033       72,931  
  

 

 

   

 

 

 

Total assets

   $ 2,109,006     $ 1,544,264  
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities

    

Accounts payable and accrued expenses

   $ 166,458     $ 130,674  

Deferred revenue

     90,489       75,493  

Lease liability

     13,985       10,024  

Other current liabilities

     62,575       21,178  
  

 

 

   

 

 

 

Total current liabilities

     333,507       237,369  

Long-term debt

     845,316       273,173  

Deferred tax liabilities, net

     1,726       2,810  

Lease liability, non-current

     98,666       83,228  

Other liabilities, non-current

     636       6,694  
  

 

 

   

 

 

 

Total liabilities

     1,279,851       603,274  

Stockholders’ equity

    

Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued

     —         —    

Common stock, $0.001 par value, 200,000,000 shares authorized, 75,754,663 shares issued and outstanding as of December 31, 2021; 72,451,521 shares issued and outstanding as of December 31, 2020

     76       72  

Additional paid-in capital

     1,735,628       1,646,574  

Accumulated deficit

     (890,638     (695,872

Accumulated other comprehensive loss

     (15,911     (9,784
  

 

 

   

 

 

 

Total stockholders’ equity

     829,155       940,990  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,109,006     $ 1,544,264  
  

 

 

   

 

 

 


2U, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

 

     Three Months Ended
December 31,
    Year Ended
December 31,
 
     2021     2020     2021     2020  
     (unaudited)     (unaudited)        

Revenue

   $ 243,624     $ 215,294     $ 945,682     $ 774,533  

Costs and expenses

        

Curriculum and teaching

     32,012       31,081       130,817       107,968  

Servicing and support

     36,601       32,488       138,548       125,851  

Technology and content development

     50,522       42,909       179,061       155,949  

Marketing and sales

     109,915       92,550       456,096       390,174  

General and administrative

     64,256       46,319       208,598       173,526  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     293,306       245,347       1,113,120       953,468  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (49,682     (30,053     (167,438     (178,935

Interest income

     287       (26     1,475       1,354  

Interest expense

     (18,208     (7,742     (51,222     (27,317

Loss on debt extinguishment

     —         —         (1,101     (11,671

Other (expense) income, net

     (406     230       22,324       (1,429
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (68,009     (37,591     (195,962     (217,998

Income tax benefit (expense)

     748       (66     1,196       1,514  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (67,261   $ (37,657   $ (194,766   $ (216,484
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share, basic and diluted

   $ (0.89   $ (0.52   $ (2.61   $ (3.22
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares of common stock outstanding, basic and diluted

     75,509,253       72,228,308       74,580,115       67,142,976  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)

        

Foreign currency translation adjustments, net of tax of $0 for all periods presented

     (4,031     10,064       (6,127     (2,980
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive loss

   $ (71,292   $ (27,593   $ (200,893   $ (219,464
  

 

 

   

 

 

   

 

 

   

 

 

 


2U, Inc.

Consolidated Statements of Cash Flows

(in thousands)

 

     Year Ended December 31,  
     2021     2020     2019  
     (unaudited)              
Cash flows from operating activities       
Net loss    $ (194,766   $ (216,484   $ (235,222
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:       

Non-cash interest expense

     25,403       16,267       1,153  

Depreciation and amortization expense

     108,448       96,469       69,843  

Stock-based compensation expense

     97,766       82,042       51,504  

Non-cash lease expense

     18,933       15,153       11,725  

Loss on sublease

     4,845       —         —    

Provision for credit losses

     8,036       4,642       1,425  

Impairment charge

     —         —         70,379  

Loss on debt extinguishment

     1,101       11,671       —    

Gain on sale of investment

     (27,762     —         —    

Other

     2,515       1,443       1,982  

Changes in operating assets and liabilities, net of assets and liabilities acquired:

      

Accounts receivable, net

     (31,756     (17,877     11,949  

Other receivables

     (27,001     (21,148     (1,354

Prepaid expenses and other assets

     (7,467     (5,230     (27,166

Accounts payable and accrued expenses

     21,212       41,959       11,542  

Deferred revenue

     9,850       26,061       10,014  

Other liabilities, net

     (27,431     (5,364     (29,748
  

 

 

   

 

 

   

 

 

 

Net cash (used in) provided by operating activities

     (18,074     29,604       (51,974
Cash flows from investing activities       

Purchase of a business, net of cash acquired

     (761,118     (949     (388,004

Additions of amortizable intangible assets

     (60,546     (62,784     (64,923

Purchases of property and equipment

     (9,788     (6,517     (13,421

Purchase of investments

     (1,000     —         (10,000

Proceeds from investments

     38,818       —         25,000  

Advances made to university clients

     —         —         (400

Advances repaid by university clients

     200       925       350  
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (793,434     (69,325     (451,398
Cash flows from financing activities       

Proceeds from issuance of common stock, net of offering costs

     —         299,796       —    

Proceeds from debt

     569,477       371,681       244,724  

Payments on debt

     (4,334     (837     —    

Extinguishment of long-term facility

     —         (250,000     —    

Purchases of capped calls in connection with issuance of convertible senior notes

     —         (50,540     —    

Prepayment premium on extinguishment of senior secured term loan facility

     —         (2,528     —    

Payment of debt issuance costs

     (11,575     (3,419     (1,953

Tax withholding payments associated with settlement of restricted stock units

     (18,780     (4,784     (2,574

Proceeds from exercise of stock options

     6,489       4,177       3,119  

Proceeds from employee stock purchase plan share purchases

     3,583       3,960       3,382  

Payments for acquisition of intangible assets

     —         —         (2,180
  

 

 

   

 

 

   

 

 

 
Net cash provided by financing activities      544,860       367,506       244,518  
Effect of exchange rate changes on cash      (2,309     1,212       (1,049
  

 

 

   

 

 

   

 

 

 
Net (decrease) increase in cash, cash equivalents and restricted cash      (268,957     328,997       (259,903
Cash, cash equivalents and restricted cash, beginning of period      518,866       189,869       449,772  
  

 

 

   

 

 

   

 

 

 

Cash, cash equivalents and restricted cash, end of period

   $ 249,909     $ 518,866     $ 189,869  
  

 

 

   

 

 

   

 

 

 


2U, Inc.

Reconciliation of Non-GAAP Measures

(unaudited)

The following table presents a reconciliation of adjusted EBITDA to net loss for each of the periods indicated.

 

     Three Months Ended
December 31,
    Year Ended
December 31,
 
     2021     2020     2021     2020  
     (in thousands, except share and per share amounts)  

Net loss

   $ (67,261   $ (37,657   $ (194,766   $ (216,484

Stock-based compensation expense

     23,021       18,080       97,766       82,042  

Other (income) expense, net

     406       (230     (22,324     1,429  

Amortization of acquired intangible assets

     12,455       10,385       43,863       42,442  

Income tax benefit on amortization of acquired intangible assets

     (238     (271     (1,083     (1,328

Loss on debt extinguishment

     —         —         1,101       11,671  

Other*

     16,767       5,662       27,801       16,497  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss

     (14,850     (4,031     (47,642     (63,731
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest expense

     17,921       7,768       49,747       25,963  

Income tax (benefit) expense

     (510     337       (113     (186

Depreciation and amortization expense

     18,416       14,678       64,585       54,027  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 20,977     $ 18,752     $ 66,577     $ 16,073  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share, basic and diluted

   $ (0.89   $ (0.52   $ (2.61   $ (3.22
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss per share, basic and diluted

   $ (0.20   $ (0.06   $ (0.64   $ (0.97
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares of common stock outstanding, basic and diluted

     75,509,253       72,228,308       74,580,115       67,142,976  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Includes (i) transaction and integration expense of $14.3 million and $0.8 million for the three months ended December 31, 2021 and 2020, respectively, and $16.9 million and $2.3 million for the years ended December 31, 2021 and 2020, respectively, (ii) restructuring-related expense of $1.3 million and $3.7 million for the three months ended December 31, 2021 and 2020, respectively, and $8.5 million and $6.8 million for the years ended December 31, 2021 and 2020, respectively, and (iii) stockholder activism and litigation-related expense of $1.2 million and $1.2 million for the three months ended December 31, 2021 and 2020, respectively, and $2.4 million and $7.4 million for the years ended December 31, 2021 and 2020, respectively.


2U, Inc.

Reconciliation of Non-GAAP Measures

(unaudited)

The following table presents a reconciliation of adjusted EBITDA (loss) to net loss by segment for each of the periods indicated.

 

     Degree Program Segment     Alternative Credential Segment     Consolidated  
     Three Months Ended
December 31,
    Three Months Ended
December 31,
    Three Months Ended
December 31,
 
     2021     2020     2021     2020     2021     2020  
     (in thousands)  

Net loss

   $ (25,614   $ (6,828   $ (41,647   $ (30,829   $ (67,261   $ (37,657

Adjustments:

            

Stock-based compensation expense

     15,467       10,632       7,554       7,448       23,021       18,080  

Other (income) expense, net

     (525     (85     931       (145     406       (230

Net interest expense (income)

     17,988       7,319       (67     449       17,921       7,768  

Income tax expense (benefit)

     404       243       (1,152     (177     (748     66  

Depreciation and amortization expense

     15,324       13,378       15,547       11,685       30,871       25,063  

Other

     16,311       4,072       456       1,590       16,767       5,662  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

     64,969       35,559       23,269       20,850       88,238       56,409  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total adjusted EBITDA (loss)

   $ 39,355     $ 28,731     $ (18,378   $ (9,979   $ 20,977     $ 18,752  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


2U, Inc.

Reconciliation of Non-GAAP Measures

(unaudited)

The following table presents a reconciliation of adjusted EBITDA (loss) to net loss by segment for each of the periods indicated.

 

     Degree Program Segment     Alternative Credential Segment     Consolidated  
     Year Ended
December 31,
    Year Ended
December 31,
    Year Ended
December 31,
 
     2021     2020     2021     2020     2021     2020  
     (in thousands)  

Net loss

   $ (46,360   $ (111,479   $ (148,406   $ (105,005   $ (194,766   $ (216,484

Adjustments:

            

Stock-based compensation expense

     66,033       62,354       31,733       19,688       97,766       82,042  

Other (income) expense, net

     (28,079     (221     5,755       1,650       (22,324     1,429  

Net interest expense (income)

     49,917       25,961       (170     2       49,747       25,963  

Income tax expense (benefit)

     629       347       (1,825     (1,861     (1,196     (1,514

Depreciation and amortization expense

     56,420       48,364       52,028       48,105       108,448       96,469  

Loss on debt extinguishment

     1,101       11,671       —         —         1,101       11,671  

Other

     26,480       12,610       1,321       3,887       27,801       16,497  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

     172,501       161,086       88,842       71,471       261,343       232,557  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total adjusted EBITDA (loss)

   $ 126,141     $ 49,607     $ (59,564   $ (33,534   $ 66,577     $ 16,073  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


2U, Inc.

Reconciliation of Non-GAAP Measures

(unaudited)

The following table presents a reconciliation of unlevered free cash flow to net cash (used in) provided by operating activities for each of the twelve-month periods indicated.

 

     Twelve Months Ended  
     December 31,
2021
    September 30,
2021
    June 30,
2021
    March 31,
2021
 
     (in thousands)  

Net cash (used in) provided by operating activities

   $ (18,074   $ 33,325     $ 34,054     $ 47,094  

Additions of amortizable intangible assets

     (60,546     (61,213     (60,154     (61,195

Purchases of property and equipment

     (9,788     (6,398     (4,715     (4,919

Payments to university clients

     6,800       8,800       8,550       6,550  

Non-ordinary cash payments*

     22,193       11,199       15,739       15,530  
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

     (59,415     (14,287     (6,526     3,060  

Cash interest payments on debt

     25,537       9,046       9,075       5,923  
  

 

 

   

 

 

   

 

 

   

 

 

 

Unlevered free cash flow

   $ (33,878   $ (5,241   $ 2,549     $ 8,983  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Includes transaction, integration, restructuring-related, stockholder activism, and litigation-related expense.


2U, Inc.

Reconciliation of Non-GAAP Measures

(unaudited)

The following table presents a reconciliation of adjusted EBITDA guidance to net loss guidance, at the midpoint of the ranges provided by the company, for the period indicated.

 

     Year Ending
December 31, 2022
 
     (in millions)  

Net loss

   $ (225.0

Stock-based compensation expense

     120.0  

Other (income) expense, net

     2.0  

Amortization of acquired intangible assets

     63.0  

Other

     5.0  
  

 

 

 

Adjusted net loss

     (35.0
  

 

 

 

Net interest expense

     55.0  

Income tax (benefit) expense

     —    

Depreciation and amortization expense

     60.0  
  

 

 

 

Adjusted EBITDA

   $ 80.0  
  

 

 

 


2U, Inc.

Key Financial Performance Metrics

(unaudited)

Full Course Equivalent Enrollments

Degree Program Segment

The following table presents the FCE enrollments and average revenue per FCE enrollment in the company’s Degree Program Segment for the last eight quarters.

 

     Q4 ‘21      Q3 ‘21      Q2 ‘21      Q1 ‘21      Q4 ‘20      Q3 ‘20      Q2 ‘20      Q1 ‘20  

Degree Program Segment FCE enrollments

     58,967        57,842        60,429        60,007        58,425        47,842        46,142        45,734  

Degree Program Segment average revenue per FCE enrollment

   $ 2,585      $ 2,555      $ 2,420      $ 2,431      $ 2,234      $ 2,551      $ 2,507      $ 2,590  

Alternative Credential Segment

The following table presents the FCE enrollments and average revenue per FCE enrollment in the company’s Alternative Credential Segment for the last eight quarters.

 

     Q4 ‘21      Q3 ‘21      Q2 ‘21      Q1 ‘21      Q4 ‘20      Q3 ‘20      Q2 ‘20      Q1 ‘20  

Alternative Credential Segment FCE enrollments

     21,153        20,174        23,679        21,078        22,190        23,067        20,435        15,141  

Alternative Credential Segment average revenue per FCE enrollment*

   $ 4,312      $ 4,193      $ 3,843      $ 4,108      $ 3,821      $ 3,426      $ 3,279      $ 3,766  

 

*

The edX acquisition was completed on November 16, 2021. All revenue related to this acquisition was reflected in the Alternative Credential Segment. Average revenue per FCE enrollment for the company’s Alternative Credential Segment excludes edX’s results of operations for the fourth quarter of 2021, as the impact was not material.

View differences made from one to another to evaluate 2U, Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by 2U, Inc..

Continue

Assess how 2U, Inc.'s management team is paid from their Annual Proxy

Definitive Proxy Statement (Form DEF 14A)
Screenshot example of actual Proxy Statement

2U, Inc.'s Definitive Proxy Statement (Form DEF 14A) filed after their 2022 10-K Annual Report includes:

  • Voting Procedures
  • Board Members
  • Executive Team
  • Salaries, Bonuses, Perks
  • Peers / Competitors

Continue

SEC Filing Tools

Financial Statements, Disclosures and Schedules

Inside this 8-K Corporate News

Material Contracts, Statements, Certifications & more

2U, Inc. provided additional information to their SEC Filing as exhibits

Ticker: TWOU
CIK: 1459417
Form Type: 8-K Corporate News
Accession Number: 0001193125-22-032646
Submitted to the SEC: Wed Feb 09 2022 4:03:35 PM EST
Accepted by the SEC: Wed Feb 09 2022
Period: Wednesday, February 9, 2022
Industry: Prepackaged Software
Events:
  1. Earnings Release
  2. Financial Exhibit

External Resources:
Stock Quote
Social Media

Bookmark the Permalink:
https://last10k.com/sec-filings/twou/0001193125-22-032646.htm