Landover, Md.-based edtech software firm 2U (TWOU) beat analyst expectations for its third quarter revenue and earnings. According to the report released Monday after the market closed, 2U brought in $37.1 million in revenue and had adjusted net losses of 12 cents per share, once again beating analyst expectations, which were pegged at $36.23 million in revenue and losses of 18 cents per share. 2U's stock was up 1.04 percent to $24.20 in after hours trading percent to 2U has beat expectations so many times now, it almost feels like that's the real expectation. Here's what else we learned in the report.
Losses Keep Shrinking
The 12 cents per share loss is impressive compared to the 18 cents last year for the same quarter. And the rising revenue, from $28.4 million last year, continues an optimistic trend of growth for the company. It's impressive too, in light of how Q3 takes place during summer, which isn't a time when edtech shines in revenue. No wonder CEO Chip Paucek sounds optimistic, and is predicting that the company will hit profitability by the end of the next quarter.
"This quarter, we have once again exceeded our previously stated guidance across all of our financial measures," Paucek said in a statement. "After a strong third quarter, we now expect year-over-year revenue growth for full year will be approximately 35 percent. We also expect that the fourth quarter, typically our seasonally strongest earnings period, will be the first adjusted-EBITDA positive quarter in 2U's history."
New Programs
2U once again announced new programs. This time, the programs include expansions to partnerships with NYU, George Washington University and an extension of its partnership with Georgetown.
"With these announcements, the number of degree verticals in which we have more than one program is now seven, we have another new, high-potential vertical that we believe has multiple program opportunities, and our clients have extended the initial terms in three of our first five contracts," Paucek said.
Milestones Marked
The program expansions and extension will presumably lead to even faster financial and logistical growth for 2U, which also announced some significant milestones. Over 200,000 live classes have been hosted by 2U since it began, in every U.S. state and across 60 countries. At the same time, 2U's programs have now brought in over $1 billion in adjusted bookings for the university clients. That's a huge number, and one likely to draw even more schools into signing up with 2U
"We have always believed there would be a strong correlation between the outcomes we deliver and our financial success. Our focus on outcomes is our competitive advantage," Paucek said. "We believe that student success leads to university success. University success leads to our success. This belief is now becoming reality. At a time when higher education is under pressure, we have created an estimated $1 billion in attrition-adjusted tuition bookings for our clients."
