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Exhibit 99.1
2U Reports Results for Second Quarter 2021
Delivers revenue growth of 30%
LANHAM, Md. July 29, 2021 2U, Inc. (Nasdaq: TWOU), a global leader in education technology, today reported financial and operating results for the quarter ended June 30, 2021.
Results for Second Quarter 2021 Compared to Second Quarter 2020
| Revenue increased 30% to $237.2 million |
| Degree Program Segment revenue increased 26% to $146.2 million |
| Alternative Credential Segment revenue increased 36% to $91.0 million |
| Net loss improved $44.3 million to $21.8 million, or $0.29 per share |
Non-GAAP Results for Second Quarter 2021 Compared to Second Quarter 2020
| Adjusted EBITDA improved $19.2 million to $17.1 million |
| Adjusted net loss improved $15.0 million to $6.8 million, or $0.09 per share |
2U delivered strong results in the second quarter and we continue to see growing demand from universities for our shared success model as they look for a trusted and proven digital transformation partner to meet the evolving needs of adult learners, said Christopher Chip Paucek, Co-Founder and Chief Executive Officer of 2U. As we work to close our recently announced edX acquisition, we are excited and energized by the opportunities it creates to expand access to affordable, high-quality online education globally and to deliver greater value for all of our stakeholders.
Paul Lalljie, 2Us Chief Financial Officer, added, Our results in the second quarter were strong, with 30% revenue growth and positive trailing twelve month free cash flow. We are seeing good momentum, particularly in the degree business, that we expect to continue into 2022, though given the near-term macroeconomic environment we are making the prudent decision to maintain our full-year guidance.
Discussion of Second Quarter 2021 Results
Revenue totaled $237.2 million, a 30% increase from $182.7 million in the second quarter of 2020. This increase was driven by a 26% increase in Degree Program Segment revenue to $146.2 million, primarily due to growth in full course equivalent (FCE) enrollments of 14,287, or 31%, and a 36% increase in Alternative Credential Segment revenue to $91.0 million, primarily due to growth in FCE enrollments of 3,244, or 16%. FCE enrollments increased 26% over the prior year period to 84,108.
Costs and expenses for the second quarter totaled $274.3 million, an 18% increase from $231.8 million in the second quarter of 2020. This increase was primarily driven by higher personnel and personnel-related expense, curriculum and teaching expense, and depreciation and amortization expense.
As of June 30, 2021, the companys cash, cash equivalents, and restricted cash totaled $971.3 million, an increase of $452.5 million from $518.9 million as of December 31, 2020. Cash used in operations of $2.2 million for the six months ended June 30, 2021 was offset by cash provided by investing activities of $4.8 million and cash provided by financing activities of $450.6 million.
Business Outlook for Fiscal Year 2021
The company reaffirmed guidance for the full-year 2021 provided on April 28, 2021 for the following metrics:
| Revenue to range from $925.0 million to $955.0 million, or growth of 19% to 23% |
| Net loss to range from $175.0 million to $165.0 million |
| Adjusted EBITDA to range from $55.0 million to $65.0 million |
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2U, Inc.'s Definitive Proxy Statement (Form DEF 14A) filed after their 2021 10-K Annual Report includes:
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This increase was primarily due to the gain recognized in connection with the sale of our investment in an education technology company.
36 Table of Contents Payments to University Clients Pursuant to certain of our contracts in the Degree Program Segment, we have made, or are obligated to make, payments to university clients at either the execution of a contract or at the extension of a contract in exchange for various marketing and other rights.
Adjusted EBITDA (loss) is a key measure used by our management and board of directors to understand and evaluate our operating performance and trends, to develop short- and long-term operational plans and to compare our performance against that of other peer companies using similar measures.
40 Table of Contents Because of these and other limitations, you should consider adjusted EBITDA (loss) alongside other U.S. GAAP-based financial performance measures, including various cash flow metrics, net income (loss) and our other U.S. GAAP results.
Accordingly, we believe that adjusted EBITDA (loss) provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
This increase was primarily due...Read more
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Degree Program Segment profitability increased...Read more
Degree Program Segment profitability increased...Read more
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Performance Obligations A performance obligation...Read more
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Financial Statements, Disclosures and Schedules
Inside this 10-Q Quarterly Report
Material Contracts, Statements, Certifications & more
2U, Inc. provided additional information to their SEC Filing as exhibits
Ticker: TWOU
CIK: 1459417
Form Type: 10-Q Quarterly Report
Accession Number: 0001459417-21-000014
Submitted to the SEC: Tue Nov 09 2021 4:04:38 PM EST
Accepted by the SEC: Tue Nov 09 2021
Period: Thursday, September 30, 2021
Industry: Prepackaged Software