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2U, Inc. (TWOU) SEC Filing 10-Q Quarterly Report for the period ending Thursday, June 30, 2022

SEC Filings

TWOU Quarterly Reports

2U, Inc.

CIK: 1459417 Ticker: TWOU

Exhibit 99.1

2U Reports Results for Second Quarter 2022

Implements Plan to Accelerate Platform Strategy and Deliver Sustainable Profitability

Expects Increased Marketing Efficiency and an Additional $70 Million in Annual Operating Expense Savings

LANHAM, Md. — July 28, 2022 — 2U, Inc. (Nasdaq: TWOU)

, a leading online education platform company, today reported financial and operating results for the quarter ended June 30, 2022. The company also announced a realignment of its operations to accelerate its platform strategy and drive sustainable profitability and free cash flow. As part of this plan, the company implemented a new marketing framework, resulting in lower marketing spend late in the second quarter, which impacted results in the period.

Results for Second Quarter 2022 Compared to Second Quarter 2021

 

   

Revenue increased 2% to $241.5 million

 

   

Degree Program Segment revenue decreased 2% to $143.1 million

 

   

Alternative Credential Segment revenue increased 8% to $98.4 million

 

   

Net loss increased $41.0 million to $62.9 million, or $0.82 per share

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

 

   

Adjusted EBITDA increased $4.8 million to $21.9 million

 

   

Adjusted net loss increased $0.8 million to $7.5 million, or $0.10 per share

“We are taking significant action to accelerate 2U’s transition to a platform company under the edX brand and unify our product and marketing strategy to create the world’s leading free-to-degree online learning marketplace,” said 2U Co-Founder and CEO Christopher “Chip” Paucek. “Operating as one powerful brand and platform enables the company to pursue sustainable profitability, while building a stronger, more agile business that we believe will deliver greater value for learners, partners, and shareholders and drive the future of education for the long term.”

Paul Lalljie, 2U’s Chief Financial Officer, added, “In the second quarter we took important steps to align our organizational and cost structure to deliver sustained profitable growth and free cash flow. Our results for the quarter and our updated guidance reflect the shift in focus to more profitable growth resulting from the acceleration of our platform strategy. We expect that this plan will drive significant improvement to adjusted EBITDA for full-year 2022 and will generate positive free cash flow for full-year 2023.”

Discussion of Second Quarter 2022 Results

Revenue for the second quarter totaled $241.5 million, a 1.8% increase from $237.2 million in the second quarter of 2021. This increase includes $10.0 million from edX, acquired in the fourth quarter of 2021. Revenue from the Degree Program Segment decreased $3.1 million, or 2.1%, primarily due to a 1.9% decrease in average revenue per FCE enrollment, from $2,420 to $2,373. Revenue from the Alternative Credential Segment increased $7.4 million, or 8.1%, primarily due to the addition of edX offerings and a 1.2% increase in average revenue per FCE enrollment, from $3,843 to $3,891, partially offset by a decrease in FCE enrollments of 236, or 1.0%.

Costs and expenses for the second quarter totaled $289.4 million, a 5.5% increase from $274.3 million in the second quarter of 2021. This increase includes $17.1 million of operating expense related to edX. The remaining change was primarily driven by higher restructuring charges associated with the realignment plan, partially offset by lower personnel and personnel-related expense and marketing spend.

As of June 30, 2022, the company’s cash, cash equivalents, and restricted cash totaled $237.8 million, a decrease of $12.1 million from $249.9 million as of December 31, 2021. Cash provided by operations of $28.6 million for the six months ended June 30, 2022 was offset by cash used in investing activities of $35.2 million and cash used in financing activities of $3.0 million. Unlevered cash flow for the last twelve months ended June 30, 2022 was $11.5 million, a $45.6 million improvement compared to a negative unlevered cash flow of $34.1 million for the last twelve months ended March 31, 2022.


The following information was filed by 2U, Inc. (TWOU) on Thursday, July 28, 2022 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
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Condensed Consolidated Statements Of Operations And Comprehensive Loss
Condensed Consolidated Statements Of Operations And Comprehensive Loss (Parenthetical)
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Business Combination - Estimated Fair Value (Details)
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Goodwill And Intangible Assets
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Goodwill And Intangible Assets - Goodwill (Details)
Goodwill And Intangible Assets - Intangible Assets (Details)
Goodwill And Intangible Assets - Narrative (Details)
Income Taxes
Income Taxes (Details)
Leases
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Leases - Lease Cost (Details)
Leases - Maturities Of Operating Lease Liabilities (Details)
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Net Loss Per Share
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Organization
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Other Balance Sheet Details
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Other Balance Sheet Details - Accounts Payable And Accrued Expenses (Details)
Other Balance Sheet Details - Narrative (Details)
Receivables And Contract Liabilities
Receivables And Contract Liabilities (Tables)
Receivables And Contract Liabilities - Change In Provision For Credit Losses For Other Receivables (Details)
Receivables And Contract Liabilities - Change In Provision For Credit Losses For Trade Receivables (Details)
Receivables And Contract Liabilities - Contract Liabilities (Details)
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Restructuring Charges
Restructuring Charges (Tables)
Restructuring Charges - Narrative (Details)
Restructuring Charges - Schedule Of Adjustments To The Accrued Restructuring Liability (Details)
Restructuring Charges - Schedule Of Restructuring Charges By Reportable Segment (Details)
Segment And Geographic Information
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Segment And Geographic Information - Geographical Information (Details)
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Segment And Geographic Information - Reconciliation Of Net Loss To Total Segment Profitability (Details)
Segment And Geographic Information - Segment Results Of Operations (Details)
Segment And Geographic Information - Total Assets By Segment (Details)
Significant Accounting Policies
Significant Accounting Policies (Details)
Significant Accounting Policies (Policies)
Stockholders' Equity
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Stockholders' Equity - Common Stock And Stock-Based Compensation (Details)
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Stockholders' Equity - Restricted And Performance Restricted Stock Units (Details)
Stockholders' Equity - Stock Option Activity (Details)
Stockholders' Equity - Stock Option Narrative (Details)
Stockholders' Equity - Stock-Based Compensation Expense (Details)
Supplemental Cash Flow Information
Supplemental Cash Flow Information (Details)
Ticker: TWOU
CIK: 1459417
Form Type: 10-Q Quarterly Report
Accession Number: 0001459417-22-000021
Submitted to the SEC: Thu Jul 28 2022 5:09:44 PM EST
Accepted by the SEC: Thu Jul 28 2022
Period: Thursday, June 30, 2022
Industry: Prepackaged Software

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