2U Inc. (NASDAQ:TWOU) announced second-quarter 2017 results on Monday after the market closed, highlighting exceptional revenue growth as the online higher-education company strikes new partnerships and continues to solidify its slate of future program launches.
Let's take a closer look at what 2U accomplished over the past few months, as well as what investors can expect from the company in the coming quarters.
What happened with 2U this quarter?
On an adjusted (non-GAAP) basis, which excludes items such as stock-based compensation and acquisition expenses, 2U incurred a net loss of $5.2 million, or $0.11 per share, compared with an adjusted net loss of $4.4 million, or $0.09 per share, in the same year-ago period.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was a loss of $1.5 million, narrowed from an adjusted EBITDA loss of $2.1 million in last year's second quarter.
Each of these figures compares favorably with 2U's guidance provided last quarter, which called for lower revenue in the range of $64 million to $64.4 million, a wider adjusted net loss per share of $0.13 to $0.10, and a wider adjusted EBITDA loss in the range of $2.1 million to $1.7 million.
On July 1, 2U closed on its $103 million acquisition (plus a potential earn-out payment of up to $20 million) of online short course specialist GetSmarter.
Recently announced domestic graduate programs for launch in 2018 include:
A suite of public health degrees at The University of North Carolina at Chapel Hill.
A suite of education degrees and a Master of Social Work degree at Fordham University.
A master of business administration degree at Rice University.
The Harvard Business Analytics Program at Harvard University.
A master of science in communication disorders at Emerson College (pending faculty approval).
A suite of education and behavioral science degrees with the University of Dayton's School of Education and Health Sciences.
What management had to say
2U co-founder and CEO Chip Paucek stated:
We just had another excellent financial quarter, as well as one of the most active and exciting periods in our nearly 10-year history. On July 1, we completed our acquisition of GetSmarter, a leader in offering premium online short courses. With university partners like MIT, Cambridge, and the recently added London School of Economics and Oxford, GetSmarter expands our global reach with some of the most internationally recognized brands in higher education. In addition, our core DGP business continues to scale for the long run. We have now slotted 12 of our targeted 13 launches for 2018, including the two we are announcing in this release. Universities are recognizing the unparalleled nature of our overall offering. We've always met our annual launch targets, but we've never been so far along this early. As a result, we remain confident in our multi-year launch cadence.
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