2U, Inc. (NASDAQ: TWOU), today reported financial and operating results for the second quarter ended June 30, 2016.
Second-Quarter 2016 Results
- Revenue was $49.1 million, an increase of 39 percent from $35.2 million in the second quarter of 2015.
- Net loss was $(8.3) million, or $(0.18) per share, compared to $(9.6) million, or $(0.23) per share, in the second quarter of 2015.
- Adjusted net loss was $(4.4) million, or $(0.09) per share, compared to an adjusted net loss of $(5.8) million, or $(0.14) per share, in the second quarter of 2015.
- Adjusted EBITDA loss was $(2.1) million, compared to an adjusted EBITDA loss of $(4.0) million in the second quarter of 2015.
"2U had another great quarter as we once again exceeded previously stated guidance for all of our financial measures," said Chip Paucek, 2U's CEO and co-founder. "In addition to 39 percent revenue growth, we also saw significant margin improvement in our earnings measures for the quarter. On a year-over-year basis, our net loss margin improved by 10 percentage points and our adjusted EBITDA loss margin improved by seven percentage points."
To supplement the Company's consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles ("GAAP"), we use adjusted EBITDA, adjusted net income (loss) and adjusted net income (loss) per share, which are non-GAAP financial measures.
We define adjusted EBITDA as net income or net loss, as applicable, before net interest income (expense), taxes, depreciation and amortization, and stock-based compensation expense. Some or all of these items may not be applicable in any given reporting period.
We define adjusted net income (loss) as net income or net loss, as applicable, attributable to holders of common stock before stock-based compensation expense. Adjusted net loss per share is calculated as adjusted net loss divided by weighted-average common shares outstanding, basic and diluted. Adjusted net income per share is calculated as adjusted net income divided by weighted-average common shares outstanding, on a diluted basis.
The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in the company's financial statements. These non-GAAP measures are key metrics company management uses to compare the company's performance to that of prior periods for trend analyses, and for budgeting and planning purposes. These measures also provide useful information to investors and analysts relating to 2U's financial condition and results of operations. These financial measures are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. In addition, these financial measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.
For more information on 2U's non-GAAP financial measures and reconciliations of such measures to the nearest GAAP measures, please see the reconciliation tables on the last page of this press release under the heading "Reconciliation of Non-GAAP Measures." 2U urges investors to review these reconciliations and not to rely on any single financial measure to evaluate the company's business.
About 2U, Inc. (NASDAQ: TWOU)
2U partners with leading colleges and universities to deliver the world's best online degree programs so students everywhere can reach their full potential. Our Platform, a fusion of cloud-based software-as-a-service technology and technology-enabled services, provides schools with the comprehensive operating infrastructure they need to attract, enroll, educate, support and graduate students globally. Blending live face-to-face classes, dynamic course content and real-world learning experiences, 2U's No Back Row® approach ensures that every qualified student can experience the highest quality university education for the most successful outcome.
