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2U, Inc. (TWOU) SEC Filing 10-Q Quarterly report for the period ending Tuesday, March 31, 2020

SEC Filings

TWOU Quarterly Reports

2U, Inc.

CIK: 1459417 Ticker: TWOU

 

Exhibit 99.1

 

2U, Inc. Reports Results for First Quarter 2020

Delivers revenue growth of 44%

 

LANHAM, Md. — April 30, 2020 — 2U, Inc. (Nasdaq: TWOU)

, a global leader in education technology, today reported financial and operating results for the first quarter ended March 31, 2020.

 

Results for First Quarter 2020 Compared to First Quarter 2019

 

Revenue increased 44% to $175.5 million
   
Graduate Program Segment revenue increased 14% to $118.5 million
   
Alternative Credential Segment revenue increased 216% to $57.0 million, including $35.4 million in revenue from Trilogy, acquired in May 2019
   
Net loss increased $38.6 million to $60.1 million, or $(0.94) per share

 

Non-GAAP Results for First Quarter 2020 Compared to First Quarter 2019

 

Adjusted net loss was $21.3 million, or $(0.33) per share, compared to adjusted net loss of $8.6 million, or $(0.15) per share, in the first quarter of 2019
   
Adjusted EBITDA loss was $4.3 million, compared to $3.2 million in the first quarter of 2019

 

“Our first quarter results clearly show the strength, resilience, and relevance of our business and offerings,” said Christopher “Chip” Paucek, 2U's Co-Founder and CEO. “Since the beginning of the COVID-19 pandemic, our operations and all 2U-powered educational offerings are running and enrolling new students. We believe the unprecedented impact of COVID-19 will continue to accelerate demand among universities and adult learners for high-quality online education across the Career Curriculum Continuum, and 2U is uniquely positioned to help existing and new partners meet this need now and in the future.”

 

Chief Financial Officer Paul Lalljie commented, “I’m very pleased with our first quarter results, which demonstrate the strong fundamentals of our business in the midst of one of the most uncertain periods in history. As demand for online education increases, we are in an excellent position to provide a range of solutions for our university partners and their students. Our recent convertible note offering bolstered our balance sheet, and we remain focused on disciplined execution of our strategic priorities and driving towards positive free cash flow.”

 

Discussion of First Quarter 2020 Results

 

Revenue totaled $175.5 million, a 44% increase from $122.2 million in the first quarter of 2019. Graduate Program Segment revenue grew 14% to $118.5 million driven by a 16% increase in full course equivalent enrollments, partially offset by a 2% decrease in average revenue per full course equivalent enrollment. Alternative Credential Segment revenue increased 216% to $57.0 million, driven by full course equivalent enrollments of 15,141.

 

Costs and expenses totaled $229.4 million, a 56% increase from $146.7 million in the first quarter of 2019. This $82.7 million increase was driven by $57.1 million of incremental operating costs related to Trilogy, with the remainder primarily attributable to increases in costs related to direct marketing, personnel, and curriculum and teaching. These cost increases are due to new offerings, increased depreciation and amortization expense associated with implementing new features and capabilities in the company’s platform, and content for the company’s offerings.

 

As of March 31, 2020, the company’s cash, cash equivalents and restricted cash totaled $157.5 million, a decrease of $32.4 million from $189.9 million as of December 31, 2019. The decrease was primarily driven by additions of amortizable intangible assets related to content and technology of $15.8 million and a use of cash from operating activities of $9.9 million. As of March 31, 2020, the company reported outstanding debt of $254.1 million principally related to its term loan facility.

 

Recent Developments

 

On April 23, 2020, the company issued 2.25% Convertible Senior Notes due 2025 (the “Notes”) in an aggregate principal amount of $330.0 million. On April 29, 2020 the initial purchasers of the Notes exercised their option, in full, to purchase an additional $50.0 million in aggregate principal amount of the Notes, bringing the total aggregate principal amount of the Notes to $380.0 million. The company used a portion of the net proceeds to repay its $250.0 million term loan in full, as well as $1.3 million in accrued interest and a $2.5 million prepayment premium, and terminated its outstanding term loan facility.

 

Following repayment of the term loan and after deducting the initial purchasers’ discounts and commissions, estimated offering expenses payable by the company and the cost of entering into the privately negotiated capped call transactions with affiliates of the initial purchasers of the Notes, the company expects to have $65.3 million remaining for working capital or other general corporate purposes.

 


The following information was filed by 2U, Inc. (TWOU) on Thursday, April 30, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside 2U, Inc.'s 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Cover Page
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Parenthetical)
Condensed Consolidated Statements Of Cash Flows
Condensed Consolidated Statements Of Changes In Stockholders' Equity
Condensed Consolidated Statements Of Operations And Comprehensive Loss
Condensed Consolidated Statements Of Operations And Comprehensive Loss (Parenthetical)
- Additional Information (Details)
Accrued Expenses
Accrued Expenses (Details)
Accrued Expenses (Tables)
Business Combination
Business Combination (Tables)
Business Combination - Additional Information (Details)
Business Combination - Pro Forma Information (Details)
Commitments And Contingencies
Commitments And Contingencies (Details)
Debt
Debt (Tables)
Debt - Long-Term Debt (Details)
Goodwill And Amortizable Intangible Assets
Goodwill And Amortizable Intangible Assets (Tables)
Goodwill And Amortizable Intangible Assets - Amortizable Intangible Assets (Details)
Goodwill And Amortizable Intangible Assets - Estimated Future Amortization Expense (Details)
Goodwill And Amortizable Intangible Assets - Narrative (Details)
Income Taxes
Income Taxes (Details)
Leases
Leases (Tables)
Leases - Additional Information (Details)
Leases - Lease Cost (Details)
Leases - Operating Lease Liabilities Due (Details)
Net Loss Per Share
Net Loss Per Share (Details)
Net Loss Per Share (Tables)
Organization
Organization (Details)
Segment And Geographic Information
Segment And Geographic Information (Tables)
Segment And Geographic Information - Concentration Risk (Details)
Segment And Geographic Information - Contract Acquisition Costs (Details)
Segment And Geographic Information - Geographical Information (Details)
Segment And Geographic Information - Revenue And Total Assets By Segment (Details)
Significant Accounting Policies
Significant Accounting Policies (Policies)
Significant Accounting Policies - Change In Provision For Credit Losses (Details)
Significant Accounting Policies - Narrative (Details)
Significant Accounting Policies Significant Accounting Policies (Tables)
Stock-Based Compensation
Stock-Based Compensation (Tables)
Stock-Based Compensation - Expense (Details)
Stock-Based Compensation - Options (Details)
Stock-Based Compensation - Restricted Stock Units (Details)
Stockholders' Equity
Stockholders' Equity (Details)
Stockholders' Equity (Tables)
Subsequent Events
Subsequent Events (Details)
Ticker: TWOU
CIK: 1459417
Form Type: 10-Q Quarterly Report
Accession Number: 0001459417-20-000006
Submitted to the SEC: Thu Apr 30 2020 4:22:40 PM EST
Accepted by the SEC: Thu Apr 30 2020
Period: Tuesday, March 31, 2020
Industry: Prepackaged Software

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