Landover, Md.-based edtech software platform startup 2U (TWOU) beat market expectations in both earnings and revenue in the first quarter of 2015.
2U's stock price was unchanged in after-hours trading, from the $26.57 price it had closed at on Thursday.
The company generated earnings of 8 cents per share in Q1, 2 cents better than analysts projected, and the $34.6 million in revenue, nearly $1 million more than had been predicted by analysts.
It's also an impressive step up from the adjusted net loss of 17 cents per share and $26.3 million that 2U reported at the end of the first quarter last year.
"We kicked off 2015 with a very strong first quarter across all of our financial measures so we are increasing our expectations for full-year 2015," said 2U CEO Chip Paucek in a statement. "At the mid-point of full-year guidance, we're now expecting revenue to increase by approximately 33 percent and Adjusted EBITDA loss to improve by approximately 36 percent, year-over-year."
For the next quarter, 2U projected revenue of between $34.1 million and $34.6 million with an adjusted net loss of between 8.3 cents and 7.9 cents per share.
2U also announced that it will have a new enterprise program, starting with Simmons College in Boston. 2U and Simmons are partnering to offer five Master's degree programs through 2U's platform. There will be a standard MBA, and MBA focused on healtcare, an MS degrees in both Communications Management and Behavior Analysis and an MPH. All five will be treated as one part of one program. The Simmons program will start rolling out in 2016.
"In this model, 2U will aggregate a number of degrees at a single university that we would not have previously considered because of their expected size," Paucek said. "By implementing shared overhead and streamlined operating cost structures, we will be able to provide our clients with the benefits of our entire Platform for a greater number of degrees, while expanding our market opportunity and deepening our client relationships."
Our preview from earlier is below.
Landover, Md.-based edtech software platform startup 2U (TWOU) will release its Q1 earnings report Thursday after the market closes. Analysts are estimating an adjusted net loss of 10 cents a share and $33.63 million in revenue for the quarter.
2U's stock price was down less than 1 percent as of noon Thursday, to $26.33 a share.
2U has had a trend of growth over the last few years, working its way toward becoming profitiable. Its programs—working with leading colleges and universities to transform their academic offerings into top-tier online degree programs—have been growing fast too. Its stock was basically flat on Thursday mid-day at $26.51. But analysts are projecting optimism, with Credit Suisse giving 2U an Ouperform rating.
"Our guidance for 2015 is another step on the path to demonstrating that there will be a strong correlation between positive outcomes for our clients' students and our long-term financial success," 2U CEO Chip Paucek said in a statement when the last quarter's report came out. "At the mid-point of full-year guidance, we're expecting revenue to increase by approximately 31 percent and Adjusted EBITDA loss to improve by approximately 22 percent, year over year. We remain on a clear path to profitability as we continue to work with our expanding group of clients to change the perceptions of what online education can be."
