2U, Inc. (TWOU) SEC Filing 10-Q Quarterly Report for the period ending Thursday, March 31, 2022

Exhibit 99.1

2U Reports Results for First Quarter 2022

LANHAM, Md. — May 5, 2022 — 2U, Inc. (Nasdaq: TWOU), a leading online education platform company, today reported financial and operating results for the quarter ended March 31, 2022.

Results for First Quarter 2022 Compared to First Quarter 2021

Non-GAAP Results for First Quarter 2022 Compared to First Quarter 2021

“Today, 2U’s mission is not just about showing it’s possible to create high-quality online programs at scale, but also increasing access to high-quality education for everyone, everywhere, at every stage of life,” said Christopher “Chip” Paucek, Co-Founder and CEO of 2U. “As we transition to a platform company under the edX brand, our partnerships help make institutions sustainable and help individuals unlock the livelihoods they want now and in the future.”

Paul Lalljie, 2U’s Chief Financial Officer, added, “Our first quarter results demonstrated resilience in enrollments and revenue, as well as continued improvement in operating efficiency. Based on these results and the outlook for key business drivers, we are affirming our revenue guidance and increasing our adjusted EBITDA guidance for the full year. We remain focused on unlocking the potential of edX, continuing to invest in our degree programs, and improving the profitability of the Alternative Credential Segment.”

Discussion of First Quarter 2022 Results

Revenue for the first quarter totaled $253.3 million, a 9.0% increase from $232.5 million in the first quarter of 2021. This increase includes $10.9 million from edX, acquired in the fourth quarter of 2021. Revenue from our Degree Program Segment increased $8.3 million, or 5.7%, primarily due to an increase in full course equivalent (“FCE”) enrollments of 2,602, or 4.3% and a 1.3% increase in average revenue per FCE enrollment, from $2,431 to $2,462. Revenue from our Alternative Credential Segment increased $12.6 million, or 14.5%, primarily due the addition of edX offerings and an increase in FCE enrollments of 1,586, or 7.5%, partially offset by a 2.3% decrease in average revenue per FCE enrollment, from $4,108 to $4,012.

Costs and expenses for the first quarter totaled $364.7 million, a 35.3% increase from $269.6 million in the first quarter of 2021. This increase includes $58.8 million of non-cash impairment charges in our Alternative Credential Segment and $18.3 million of operating expense related to edX. The remaining increase was driven by higher depreciation and amortization expense, an increase in transaction, integration and litigation-related expense, and an increase in operational expense to support revenue growth.

As of March 31, 2022, the company’s cash, cash equivalents, and restricted cash totaled $233.6 million, a decrease of $16.3 million from $249.9 million as of December 31, 2021.

Business Outlook for Fiscal Year 2022

The company affirmed its revenue guidance provided on February 9, 2022 and provided updated guidance for its net loss and adjusted EBITDA, as follows: