2u (TWOU) Reports In-Line Q4 EPS, Revenues Beat; Offers Q1 & FY20 Revenue Mid-Point Guidance Above Consensus

2u (NASDAQ: TWOU) reported Q4 EPS of ($0.18), in-line with the analyst estimate of ($0.18). Revenue for the quarter came in at $163.2 million versus the consensus estimate of $161.38 million.

Results for Fourth Quarter 2019 Compared to Fourth Quarter 2018

• Revenue increased 42% to $163.2 million
• Graduate Program Segment revenue increased 12% to $108.2 million
• Alternative Credential Segment revenue increased 202% to $54.9 million, including $33.2 million in revenue from Trilogy, acquired in May 2019
• Net loss was $44.6 million, or $(0.70) per share, compared to net income of $4.8 million, or $0.08 per share, in the fourth quarter of 2018

Non-GAAP Results for Fourth Quarter 2019 Compared to Fourth Quarter 2018

• Adjusted net loss was $11.2 million, or $(0.18) per share, compared to adjusted net income of $13.7 million, or $0.23 per share, in the fourth quarter of 2018
• Adjusted EBITDA was $5.0 million, compared to $20.1 million in the fourth quarter of 2018

"Over the past year, with the addition of our boot camp and undergraduate offerings, we have opened up significant new market segments, more than doubled our client base, and now deliver a portfolio of over 400 career-relevant, high-quality product offerings," Co-Founder and Chief Executive Officer Christopher "Chip" Paucek said. "Our recent expansion of 2U's relationship with the University of London and the London School of Economics and Political Science is a testament to the strength of our partnerships and will allow us to power a compelling mix of seven bachelor\'s degrees from two of the world\'s most recognized and respected institutions."

Chief Financial Officer Paul Lalljie commented, "We closed out 2019 with strong results, and enter 2020 with excellent momentum. The business is on pace to deliver industry-leading growth for the year, with revenue expected to grow by 26-30% and adjusted EBITDA expected to turn positive in the third quarter. We remain focused on improving operational efficiency and accelerating our path to profitability and positive free cash flow."

GUIDANCE:

2u sees Q1 2020 revenue of $170-180 million, versus the consensus of $172.45 million.

2u sees FY2020 revenue of $725-750 million, versus the consensus of $729.39 million.

First Quarter 2020

• Revenue to range from $170.0 million to $180.0 million, or growth of 39% to 47%
• Net loss to range from $70.0 million to $60.0 million
• Adjusted net loss to range from $36.0 million to $26.0 million
• Adjusted EBITDA (loss) to range from $(18.0) million to $(8.0) million

Full-Year 2020

• Revenue to range from $725.0 million to $750.0 million, or growth of 26% to 30%
• Net loss to range from $220.0 million to $200.0 million
• Adjusted net loss to range from $90.0 million to $70.0 million
• Adjusted EBITDA (loss) to range from $(5.0) million to $10.0 million

For earnings history and earnings-related data on 2u (TWOU) click here.

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