2U (TWOU) 6 May 182018 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the 2U Inc. 2018 First Quarter Earnings Call. [Operator Instructions] I would now like to turn the conference over to Mr. Eddie Goodwin, Vice President of Investor Relations.

You may begin.

operator. you, Thank and Conference everyone, XU's Quarter First Good welcome Earnings Call. XXXX afternoon, to you a results. By earnings have should now, received the first release copy company's quarter XXXX for the of

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December regarding the in that us. cause those risks available statements, beliefs for future current During to this today's and on are facts, to call undertake update management annual rather and the currently uncertainties and year as differ made anticipated the we to actual on Factors XX, limited but the to, and forward-looking these this is of reports these described it publicly risks results Risk attached guidance is by This in unknown includes, changes of discussed All forward-looking or call, Except not comparable forward-looking tables release. in with information the statements from market in our no objectives future call could our in operating the statements materially Also, communications. and our or events results and based report conform the The our for to contained than we are filed is this by future during forward-looking forward-looking outcome not of financial known subject obligation XX-K Non-GAAP to measures based statements reconciled required but law, other any public statements. policy plans on Form expectations. to company's to conditions measures XU's GAAP statements operations. expectations SEC. the update is may directly including and most results, on the and XXXX, press financial are today. in as of the are actual historical not statements make provided information These other call company's results to section financial ended to

Before I today. turn XX the call in earnings I error containing in over was earnings occurred our a earlier why website to posted earlier. being release want to our which X-K filings address There our technical release to our system, Chip, quickly resulted the minutes

as we this would As turn we that realized to With soon made Chip. decision the clarification, I occurred, now over to the that call immediately. to file like

and for this We're it. is creating University back row worldwide, higher education eliminating sustainable a for and the Eddie. team our and XU shareholders our Thanks, partners. now business strong loves

Let's start with our recent results.

course have an Cape business short This in $XX.X of X up to Grad our midpoint revenue operating was we of expectation is over short results year-over-year the by line the guidance another represents with segments part new revenue thriving quarter. that short excellent was previous almost in in of course full belt, growth with line course XX% as under points $XX.X our Revenue quarter segment for top XU. our GAAP expect headquarters driven million, confidence We've to rate rebranded raise GetSmarter With the range, the XX%. million. strong QX the short At compared growth are working on in in revenue. the of significantly media new revenue in year-over-year. percentage for Another guidance. market together. enough opening of a $X were expected closely increase course The we over our which history performance GetSmarter million on more our major channels year fastest-growing improvement up by and for this a and We're business advertiser the X being to benefit Town, resulted the platform. in social great quarter for finding time XU short courses, quarters

growth short can was Revenue we'll more offering graduate addition, about the partners our see to in In to Shifting segment. right consistent increasing with interest program our told expected XX% you is XXXX talk you. beyond because and marketing. that express all what Rice previously we to program grad is are is programs continue first in courses into quarter. for announcement where it in we and minute. actively a XXXX This the be and Visibility

told segment pipeline. for and we incredible you Analytics an good give XXXX. with off So remain our at that of rate XXXX, it's call. growth the program driving is longer-term will accelerating example, Investor XX the revenue to given of students look we some really the detail more especially we're Day, beginning to But will grad Cathy credential thinking idea what our new and a perspective, to One like. in get start, that have confident a as rest new year continue Overall, later in Business for you growth into XXXX Harvard we school. of the

a initial with became the Let and Community me new XXrd in social science recently in Public the told X and with at Health; Note, say this strategy Doctor GETGO University Learning that specialization We critical University, X this and X X our is from excellent of MPV a Social with health, partnership Work. We have pipeline and of of Texas business. public our a partner MSW@Baylor, Change; in the now Education Baylor verticals: in Education@Baylor, programs work, a here, Master work. education, data offering a world Health excellent. DGPs, is great partners MPH@Baylor, Master Organizational

you new today: We one for also have grad and courses. short for for one X announcements

of offering business School second courses. short Business@Pepperdine, And existing a newer for already The earlier, Pepperdine management mentioned one of degrees. partners, for client our First, University, launch DGP. graduate program University the Graziadio up sign up as Rice to became will suite third signed grad has a I Business and

very of So We are for we've keeping coming, for quality is the in the like you a invest they pleased. in and XX No XU. turn on pretty even partners can No No higher X XU. on well approach to for schools for don't now my robust need others ahead to year XU. announcements last it. furious. space scale our companies do compete, for business But XU. you target. our take announced XXXX. those more companies space like pacing Other to model I'm might score, work other it's comprehensive like of this in for a but a our and the fast We're has don't and simply argue like of targeted one and that's that our of And do. in word space and builds can't ton often one launches

investments stated student critical. Syracuse Kent Investor received technology it. providing drive of significant also outcomes. from we the clients rev the in And takes, Syverud, and make University, doing the XU Syracuse But on. Our Chancellor saying incredible financial of strong that with areas world-class portion in the his focused the Day, university the belief At value so, that sustainability care shouldn't we be is support share, really are

drives can't they to their on million are site revenue Our really $XXX simply the also school. for from $XXX business our powerful expressed it's million, only which partners It you. long-term that March are relationships, just XX, a but have like powered our partners a share, the new programs. XU revenue for XXXX, A through find earned model partnership not fact a producing Inception, story. elsewhere. surplus

Day that at heard Syracuse Investor year. at Kent you've Now last from

at past the Two surplus about from to Social Work. heard also graciously have USC Flynn allowed You've this you. Dean discuss me Marilyn like partners their additional people with in

built Dean the this ago, Berkeley, for in system. First entire programs on one it's of we the with iSchool into in incredible surplus been the of the most years selective producing portfolio. one AnnaLee since Yet X this at journey is Notably, most programs Saxenian UC started has the datascience@berkeley a iSchool XXXX. Anna. entire the our successful

is USC operating the contract next over on launch of the year in with and nursing, breakeven to a In entirely hit campus doesn't million built that similar getting from X, exist ready of being new On surplus been the is this scratch a they $XX surplus. top program at master has term. that, fact, iSchool and week. generate a program, over will It with expect to cybersecurity,

at look let's partner XXXX. Simmons College, in who Second, started another

have XXXX Drinan, expertise Master grow program in signed when online. neither we what Online from statement deliver their in with Manager read looking new we We a me Let to a with funding, over strategic program to in in amazing "Simmons But of the a our after of XU, $XX graduate million revenues, for largest and graduate closed revenue fiscal $X source our program 'XX surplus million. attempt. our X FY revenues now our revenue @Simmons outpaced our Helen made you the nor knew Program years, online. are move online XU an were failed year the over campus-based from the our President prior for college. and Nursing Science recognized had this In of prepared we We

model, it revenue love for is important, discussion. but financial On arrangement then away, too. Cathy. all with a with sustainability it When I University it past wins, model." wins, outcomes, quote. highlights student me shared financial win. we Cathy a starts the also the success shared student to that is and and that our let Take success Shared indeed. note, It While XU University is

first growth XX%. graduate for adjusted exceeded quarter. quarter million, better-than-expected revenue prior by remainder the off coming loss first growth adjusted quarter was short course loss. year-over-year came kicked with And period the of EBITDA the the driving program net the XX% nicely revenue year XXXX revenue. with of a Chip. guidance addition segment from Thanks, and in of strong our At ahead Revenue $XX.X

launch expect previously, reaccelerating Remember, year second of back target. programs graduate X bottom in schedule, XX% to As current past the last than launches gone to growth, we heavy. told rates in from in out X XX. those annual to been schedules to and we've larger revenue we first that of the get with years growth Fewer have our our you our a before the in this half revenue portion MPV to respect X the half launch of year-over-year were half program years, in

scale, it be by driven As factors an Graduate for pulled but program early XXXX program equivalent. course rate revenue not continues in growth growth increase our have time to rates, expectations. these long-term to growth takes down revenue full

to our for with the point line quarter, FCE was over in the I X,XXX average This year. last quarter first a expectations. had year-over-year see increase short about told the of the fourth quarter graduate in revenue of XX For during what of below second XXXX. a in because we revenue, short pattern decrease by just quarter, Reiterating course following start the program FCE. FCE described XX% and basis growth offset In can the FCE first course timing showed you number which half expect our in of growth XX%, in course we you slightly per was FCEs this segment, reacceleration FCEs of

higher U.S. once XX% revenue than resulting sequential quarter. at increase However, offered the increased, average in and prior of per FCEs in the again percentage in U.K. to FCE, universities a $X,XXX, the

should time, of to as drive up course expect higher-priced University short average You per to courses segment's and see over an majority U.K. U.S. this revenue. trend continue FCE increasing revenue

we've earnings said to want our measures, turn XXXX. our of expected for previously we what to remind I margin Before about patterns you

scaling throughout to business As short our in the number graduate the we patterns our in of and launching courses investing year, earlier significantly prior presentations and the expect year, we're from launch new XXXX and margin in programs increase years. continuing vary to course

level that us of year, year expect a the also meaningful the with at to the which full should first and is half allow adjusted reasonably second our XXXX. consistent differences We margin maintain in margins EBITDA between

first for net and As million million adjusted the percentage by percentage was points we period. was loss EBITDA adjusted a the our end widened of by year-over-year due represented quarter net After XX million guidance X% adjusted a the net almost first point revenue. a low a of and to decline quarter adjusted or of was expected, This loss certain compensation quarter points. X quarter corresponding perspective, represented $XXX.X employees. loss $X.X primarily related stock-based of income loss revaluing million, After EBITDA the first margin net X% Note the This X $X.X adjusted higher-than-expected to an or margin percentage of year-over-year of over million million, the net at net loss EBITDA acceleration was sheet This also $XX.X and $X.X of grant to due declined million $XX.X cash. decline widening million $X.X $X.X that equity negotiated departures quarter adjustments net $X.X loss further to income a or revenue. margin, in in and respectively. balance with ended year first in From expense. prior adjustment million

quarter had significant in quarter timing number the of the reflecting million graduate due Our payments balances, $XX.X where balance end. a of receivables also start first are related after sheet program

second the the quarter these year. million we're looking quarter ranges imply and the for between XX% expecting and growth and midpoints of their million $XXX.X XX% for million for year-over-year and for million forward, At revenue the year. of full Now $XXX.X $XX.X $XX.X

we've As remainder courses over expectations see, guidance. the have offer of us year. enrollments the new you full to the year of these from significantly number for can times we our short led to increased expect previous Higher-than-expected increase in revenue courses

XX% be how from XXXX presentation updated be of driver are short additional third Additional later Of expectations in quarter. increase. that into the we've year. the Based earnings the course year, expanded across primary revenue disclosure the new in we quarter recognized half the release the now we our these expect in second for approximately on have will our enrollments our revenue, expected visibility presentations second distributed and will now current the

from million Looking at for second expectations full year for expect of $XX.X due the loss $XX.X earnings compensation forecast loss, and between net that an our the net increase we expected primarily stock-based larger measures, to guidance million updated $XX.X million loss Note last full and year. and $XX.X the for net expense. million between quarter to in a our we've

of stock recognized increases increased grants related increased effective for These grant the expense remaining competitive X of are to members first addition management, our expectations them were XXXX. the to expense the we with quarter, In the including start CEO, get in to additional to we our made April for base now forecasting so certain level. expense year, quarters we at changes our compensation the primarily plan annual and of

of remains $XX.X stock-based companies expect this the very expense increase $X.X However, as compensation adjusted in $X.X net full we the similar revenue, and and the for still second believe result to between reasonable million of and expense between that X% we year. of relative $XX.X million our only million expected million for now quarter, high-growth surveyed. loss We

visibility in margin EBITDA segment, our of on current forward-looking how EBITDA expectations, into we've what later it thinking believe XXXX all the quarters. million million understand integrating will adjusted to will early we made you and which financial and months course order year. point provided unfold. a of early measures earnings I full our updates $X.X for release, carefully remind in the relatively scaling last an We've of expect and finally, is section this earnings also with loss our color we result our read to respect And as reiterate and short segment. We the of the distribution I our outlook the second to encourage now adjusted as short expectations, $XX.X in on still you our million stage positive to want you that XXXX help to $X.X remain stages and expectations, I between quarter, the between for having $XX of some to more of With of a want few that course million

of student we've we Please the revenue and But of previously, early end expectations, certainty their to top As in a don't presentation. short and highly time results perform early of to give performance great immediately be sensitive new come uptick and at courses second to ranges. how new revenue least definition, therefore, XXXX, the a we'll their said in on our end By revenue margins. some will see quarter have courses in these to remain financial and assume results in and, first expect around note. course or enrollment presentations significant us a presentations cautionary after margin the ashamed that

only tracking, raising short with continue We expectations belief creating program excited GetSmarter we're that be the is up how program is we're segments segment graduate and Further, like and combined XXXX. are on launch very comfortable further course to reinforces we cadence that about very year both acquisition for revenue graduate full real how our outlook, value fact pleased short the the Chip? our We're in pipeline and course shaping significantly our the based for seeing. the company. our

Cathy. Thanks,

XXXX. into offices spread across and Our international came global scale reach University and XU X in XX X partners. clearer a focus of portfolio continents now has

talents better rich partners, Our across us zones diverse worldviews. and presence presence and enables our of enables on schedules. a us And experiences with expanded serve our University leveraging their cultural to time support more to the workforce global students varied

Also take that on seeds time us undergrad. do for about and see future our from opportunity that in I note, more quarters. think team. that but we worldwide the some large. annual You'll Seeds my to in how time planting over on is letter, talked opportunity impacts More grow,

rebranding, your I'm And changing super Cape is we'll With ropes about lives. stands people's take questions. the XU business globe. the This back excited no Town it. around that, with

comes Instructions] Thank of Crédit question of Nemeroff from first Suisse. the [Operator line Michael The you.

line open. is Your

really. you taking a the with nitpick Could this to questions DGP better-than-early And along looking actually for talk over nitpick steps how remainder flow increased amortization had there And assets came in years? Two maybe another the planning about can And full that if you're the next What the Congratulations success a I of One that quarter-over-quarter. year? materially your promote between rolling bit cash Cathy, real we for taking then then for about guys. expectations obviously, lower are the And cross couple programs for I Cathy, early and only now? see, how quarter. Chip, on one the nicely. X? the for that's how follow-up also the and year? Thanks you're my questions think should And may. then expected, success on for fantastic GetSmarter. little that what intangible you've Chip just seasonality of of than the

Michael. Thanks,

So would it really or believe say, opportunities sort combined the we're still entity. cross for not, I of early very in the

Town Cape to of has within XU now, portfolio we're know vice GetSmarter, You versa. as tremendous referring our and amount a opportunity

of You're seeing GetSmarter the we and interest on pleased that where very from the degree pipeline have just now been Berkeley - initial the sign have level but you're by we side. not seeing the we've Rice, partners on original

going So with Town come the years working that's states And to incredible in here I've now separately, pretty over a directly team then Hong on. an really love and in Cape people that team of you of incredible have people Kong. in the

not interestingly, is marketing platform. believe a in funnel, So a things like do to we - really do value. allowing on that tremendous amount is social amount particular was on yet, happening media of terms where the of advertisers one the opportunities is But fastest-growing of a cross-selling tremendous us of there what integration become

makes days, results it's candidly impressive. the early which more perspective So from my

how tail better. just we bit are by figure of like and out love now the I'll a So to Cathy. pass we've to it, to things and to feel And do got trying continue tiger it a here

Sure.

so which this thing So, we I worked during think, big finalize, the Michael, acquired first during flow cash remember transaction that we the in to - we code did quarter. on item, that is the

cash little So is a that, it related why that's big flow change light. come in in a to the will bit

the things Remember that, Brooklyn certain websites of and as and facility more that's we been amortization with a why and we that other Also, saw far we depreciation classify - the like you've have things intangibles, and our XXXX. of you very which assets, were domain step-up like at step-up there. put As doing into as around the like. names there that end owning seen as slight service intangible

a And so fourth significant pretty anything to if to the you items. step-up you're going see quarter, compare those in sequentially

any comments Chip, helpful. give That's particular can you us.

- the people? universities out DGP people of the the comments the courses of mind the read of at some the same on what leadership, as that As curious DGP I'm are - you some are the lead short they

an I symposium original for we building think, of incredible - really you groups our exciting brought had And our way both found working and the altogether, time them where at and just strong. very a event, the their event the we it's reaction we just if there, we an partners. GetSmarter That's stuff. public together, portfolio did was partner not for job that clients. sort first had everybody's And look

So there's program South graduate no question clients. that there segment is interest African historical the in from even our

lot still there's a So is on. going Pipeline lovely.

Thanks taking Congrats guys. question. my for

Thank you.

Singlehurst is of of Tom line Next from question Citi. the

Your line is open.

Good Citi Chip. from I London. Tom of I'm about in couple evening, Catherine. had London. questions Good here Yes, here given international, evening, sitting a in It's

one costs of is ECL the of tell IGPs, First it's that I it's us sort start-up can could conceptual about now very relatives DGP? wondering with just days, the started And question. suppose tell Is whether but us I I early start-up anything then you that relative the there programs? just, know relative of the set secondly, you cost I mean, I was anything you to is about as say there price those building

perfectly. the I year just margin. could opportunity out programs guidance obviously, get EBITDA an squeeze the could full start think to of about adjusted out launches in trying willing XXXX, program the if we program it launches at sacrifice you should XXXX? full the is or and tethering be year, would the for I'm guys think, mean the least just you you to growth EBITDA I'm of it's build how extra lifted. to being of somewhat - for couple I that about if encouraging thinking this - But quite sort sort in you work

problem, Tom. no - So

into say, actually Willetts We very I'd ended who - we X hired had the an arrangement. up it a announced that we were It we It entering was us going love. U.K. took first, So Lord thoughtful while David is when actually years early before days. we

thoughtful from think in school there So is anything is obviously, interest relevant the and we we quit your and just is And it. significant. have days. we from should like have attend we just we life, to. schools yet the a think patient about not we to very from be substantial sort a in And that were in just understand in will have really It different early those - of this I and entering new a said, opportunity particular in demand worldwide U.K. fundamentally do new to is don't expenses up With vertical, And a worldwide. it. market, guidance of notion therefore, you challenges And your of job demand frame But don't pick a see move entering I standpoint. enough on think give why We - do elsewhere. great there good it. that you

build applying think when United about outcome of well excited X are we world and great business. what we can it States, great a has in so student different then very worked And parts the a the

EBITDA very that last of and there. cadence standpoint XX pacing - pipeline, we any know are of last have going ahead if additional last able And guidance the and to promised. provide and feel From like question we So way strongly we the year we're it TBD, why way shows not early. the year, just asking to time you about it's ahead year, we're of made from our over decisions compare our increase year. we a to that We you're little be But to before. XX, feel understand we

is grab. are feel we particular well. particular We weren't or at that see or like, feel in grab times. The and into all about come we that market up that things not higher it definitely the an we sort opportunity we've at we opportunities. context really of historically, moving some passing a a more way. of do faster. And to land of ourselves people proven we So reality the I market - and means enter land that go we've ed bodes well, talk been towards pace level notion heard can We don't doesn't a that so - like when vertical vertical, operate would

that faster. it with So said, moving is

And haven't up any opportunity decisions the to made least see at pick certainly But there. to so is we're we excited now that pace. our

Thank you.

Tom. Thanks

line Tong question Sachs. next And of you. comes Thank from George the Goldman of

Your line is open.

presentations Hi, the afternoon. for business. thanks. course course margins? And expand the of Good And courses? remainder you implications needed number what short the for in are to to What performance the In your the are short better-than-expected saw plan quarter, of you these increase year. incremental costs

are nice sort of largely built. the take of expanding you of and the presentations have are that - me that number business pieces. expand is short thing all X let that content the So course costs already in They you The about the variable.

infrastructure the there. have already of most You

is sections. additional costs. have really is large The investment It the it in factor really about of offsetting an comes marketing opportunity to teach things pay to So tutors program. like you with is upfront delivering that a on bit the

short-term of away things the And drive on in those so margin are lot eating marketing of a to investing those. we sort by

use dollars because we business significant to on top are we expansion So generated we the see really don't continue want on the that any that to line margin to being planning are in - market.

revenues have graduate obviously follow-up, and degree with seen programs significant Got it. per Very to respect a enrollments and helpful. your growth then And earlier as program. success

very your with your pipeline you are revenues Looking discuss Can enrollments program ahead, compare at performing? launches? how earlier strong And programs. they newer how you of per have launches average a and new

Yes.

think and sort So view the not we guidance like programs mid-XXs general when start can competency started you see convex steady-state million looking launched enrollment we curve like initial to average verticals of new notion consistent. a of sort We still MPV, different and releases it small, or perspective is given on is they $XX they steady-state the build on what more feel at we at of feel do us at we've of concave. today, starting, consistent. better. time cohort little press it bit expect The that and and program, margin get The takes all is of and to you started you sizes, then for

faster. faster sort of it steady-state's gets So going also but

is the of that, we - So generally like feel all correct.

so sort and only on But and perspective rates, Right a over like on gradually you, over a just telling we Now is move we're now, told time, basis we've too we you feel people program of good. feel growth them little have as programs, time. believing still add strongly. that bit we on is should of a what and so our And more just more forth. per we lot less pretty because what

So performing. very going what like we see. the we are after. scientific being - they like about they're We're feel we ones we're And

So see too, way. cohort our in it margins, and kind the of you by can

can you see the So historical numbers.

with the You releases. but the can cohort current the press obviously see you see can't current ones

able be get we're right So we enough to to give a on. thought to that sense you

we back go statement, and to this sort be to short deliver longer-term want we is business. the that something, still - guys is I you to in of understand want with stages add steady-state in and like expectations longer-term just course integration. to look your a question want of what are first you is margins to better where will quickly George, are we today able a that of But And to of which view that we

- around can arms put our that that And to our business. things at of drive trying that getting still to applying place all the are looking in marketing do to all market. capabilities We we

through get are, to we impacts as so steady-state start longer-term able better see to guys with And to a view that back what and of margin. you coming will be the be we

short For courses.

short Yes, for courses.

helpful, Very you. thank

Markets. question of Capital next the And line comes of you. Monika Thank KeyBanc Garg from

Your line open. is

to about This start guys, Baylor ask Celino for The kind Hey of Monica. my confidence is for I what's actually thanks kind education lot question. an I time. which want in know is of for to Jason program this X is of MPV taking you're months, it's your program? but on program. in demand finding whole a - about kind in of set

launch don't have program confidence. We we unless

negotiated, fairly be But positive term, currently a a we've out is statement. to do gone that for we of clearly, and able lot the we - confident that's will So that generate in. long vertical all that MPV work that results, so obvious an and feel programs school

programs that one said they So of of I've a to it for that - in that those was slotting sort with the complicated have ready things that more have. been were historically while we us is for case, go.

a transacting, rare grad pretty the they're world of faculty our people mean, operates I segment. think order the time, that Like it's find XX the XX have where cases, for the with there's smaller a I that you relationships. some faculty. case, it's actual actual get or program good for they're to in these a to vote. in - most good offering that to in each company in market degrees us But vote we're of a XX

complicated. in is note slotting make the done And One program Baylor Baylor on Texas. case, the these is of was ready that go. about getting other would always So to I all

is Texas, say, that big. in years work and does the the our and there we've where regional it marketing algorithm it's going something been early bias we've out once figure on in able what's because selection we really program place very to the of figure over a out. It's way difficult learned is underrepresented been works. But years to the higher, to to Our ultimately, historically favor

So tremendously. like Electoral a a lot when matters people College a bit the in it little particular there of area, thinking

the Baylor love that opportunity present. we so And

And awesome GetSmarter then thinking Okay. bit. little a kind of color. business That's the about Great.

about So you than let's growth previously we growth, talked with Or view? I know mid-XX%. we've it? higher are it that the DGP kind of comments, how think should of core maybe reiterating kind your call about

revenue and and split a the short if - said at at basically north to we pretty X, that look the step-up was is between much put think entirely we fact look I of business. So you in attribute the revenue figure almost line what million course you it our of in our could fact you $X and the out that

we're at is least that, rate because And XXXX, growth conclude for XX% that side giving you to have higher will is You have XX%, the rate the said core overall. growth that a that business. on in

revenue short by have higher definition, the there's in So almost a courses. you believe to growth rate

we kind just of is should how the on years it that's And function... this think the about - forward Or going a to?

to I think come. should Yes. of some think you period for No, that

large to the about make law numbers. have of judgment do your you However,

appreciate Great. last kind it. Okay. then around short And of courses. question I

the us seeing can I of of strength of of Give of You them talk some that kind kind what programs? chosen. are? some about good you've what what of characteristics mean some of pretty the makes programs type are good kind programs of you in kind types they -

to course lot There's there's be going more. so not a over into We're going many. detail. get time, per And to

there of been historically, skill-based So of courses. There been confident emerging courses. sell all have been pretty them. courses. technology-related There are And have there sort that have we're technology-related opportunities to

the thrilled So of with short course heavy. It's - - are the growth segment. but is it we

I Yeah, great. for appreciate questions. taking Okay, Thanks it. really my

Okay.

you. Thank

Our the from line comes Point. Michael next of of Tarkan question Compass

Your line is open.

you taking my for questions. Thank

fee competitive maybe hearing model? Are to a school and are with new asking of you talking people comfortable partners. share rev questions and the they market with sort service? on around going front more about you're generally for Or when Just overall

Yes.

service entire of overall has So history only not I XU. say the through would I existed but for guess, XU before fee

aligns you a as today. long-term together is interests I you fee is the is service are for or And the really for fee getting share? question down revenue for it what excellent share, getting to I you or definitely so revenue I what why we think, that value clients hear our share it but argue reason. with - that, regardless so about for And can our comes would key a the compelling about are of And service, our make pipeline value a it University whether argument revenue I questions very client, for for to that

to our data to to all stronger. clients used amount be. it of of that prove are provide have portfolio we just better and We tech is really aspects share strong, And our value that of with than it. it is is tremendous getting service them we and about able a The

some reason. building rebranding of whether or what, fundamentally, no for delivering? And really on your folks that a going the of Are a newer service, a to It's good. We not really quality. good? moral you good. us really long surplus fee the share are get And specifically, our guess in process are we're the comprehensive approach to as some it's XU have there to to easy, superiority took stack is gave you for is, color revenue time the It is out, are OS And reason we that it. figure and it really, to

success. love revenue. So really approach And I Helen think that it. we the I quote Drinan's just shared Not is about shared way

of our company. feel If And the on like clients. our built that is you the we understand manifesto our culture website, read appreciate into fabric a in the we we way that them of

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in-house and other today, those competitive Or a the were follow-up from to USC that announced were that, won you just Pepperdine Understood. entities? that MPA And you those programs? wins the program business

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definitely into around So competitors. deal, without is a deals will tell specifics winning that are I wanting we each common from to individual get you more the thing. That

Thank you, that's helpful.

Thank you.

Schwartz of the of is Brian from question Oppenheimer. line next Your

Your line open. is

you Thanks start quite for on taking It of the expected back discussion. this to Yeah, hi. that better business the short was afternoon. Chip, at questions the you courses the in quarter. quarter want my to I than like traction the sounds bring

So X questions related to that.

sales a here just the industry on course here looking And a faster seeing are specifically. for really perspective, be with may is just company short know attractive. from cycle on your have question, then you learning early. offering? is are the that the finding that increase the it's as I doing question, momentum in But shorter in First you changes ROI, you any the capitalize What second to follow-up or segment? internally the XU investment Universities

Okay. Thanks, Brian.

would say, certified continuum that long long are the I first, a I'm think on operated way side. It course faster if time about I is the certification the short heavily attainment of with as we've present skills And opportunity now Cape the of company not are credentials sure ROI of as you Town them that the the So sort for and is of offer newer from selective. standpoint if clear really us GetSmarter would sort into with on, that's side program tuition sort very provide higher really embed what worldwide. - we that intense programs have enrollment does open of XU to an our

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us, So now faster. from a for it financial is perspective,

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yes. Oh, thank you,

So about - notices, we've probably Brian, new seen made. hires some you've

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continued core. is there investment So into going the

just ask to me, segment competitive momentum short I the landscape. here. And from continuing want you. last Thank about the on question you course

immature side, displace seeing where it if the GDP to seeing you're wondering learning? able you're and short there pure the even both mainly you an is and market have market that on-premise courses plays in So short Greenfield because you're Or any out of specifically, on still courses. replacing kind just just just

I the perspective I step higher so just how take massive sort think about It's mean. back just education is. have to Yes. and big. of feel like of people global a

more some regards we necessarily a not winds of for immature we lot type times market offering, of we'd this to are gaining So competitive at deal room but particular that a ample And it's say, with in people. while is that Brian, there and thrive make just we've want, good environment. more that about a been doing great at then environment is We're really this And helping it. the getting transition worldwide, schools the time. this to online long may

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So I think our results prove it.

awareness So your not bids if question introductory comments, hear Because of greet of create to but we in expect, meet comment you're terms one more in in the if maybe trying in XU. in that here expecting upside a forecasting I the not the we that could have about expecting future? just just so be Cathy. just you more and about messaging did should wondering that sneak as wording, model something as in is exactly raise a for much to sure some the we're accustomed that think I'm

did line, that top really looking to see at your are we Brian to. you're do that a I stands. this not we Though we not margins run EBITDA question So those. I'm use what sure big in expect because the to the short of changed What take we're not tremendously is back reinvesting expansion tying the reiterate referring to that exactly guidance about part for reinvesting And of We momentum. advantage significant expand to to did driving our are margin year. was to adjusted haven't level

I that to sort for biggest look the is are that similar. margins would kinds reinforce of maintain that us of please to So is - you thing those

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we're so And where really that's headed.

it. Thanks clear. I for up me, appreciate Cathy, again clearing for That's that

Thank you.

Needham. next line Your Rice Kerry comes of the question of from

Your line is open.

it this around don't the already a and content. of Was One most clarify. the courses. you that increased And that of more can Berkeley to sounds created that short Thanks comment is know on globally? frequency if has I given U.S. lot. the or that like related

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hoping So running comments you up it the be that months. may you give be said kind should on and already have could of was Chip Learn.co be an couple then or may on a I clarification, update of OS answered be you that? should XU of technology, integration just And this in the integration. may

Okay.

I question, correct little that just bit. first the on So a would

best courses and more creating working presentations So have are concert we short with of closely courses And us in when with Cape now a become partners. her we fantastic GetSmarter high presentations for they part of about - believe increase their the are job on that variety Town talk as the they're practices about of in quality. Johnson team XU, to we a that Amy number done of that think offered

program. So more presentations students does in mean the that we have more

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rave symposium premier excited reviews. our We to did very are our clients about at So it. XU it

of you'll next it's that something X more over months. see X the So hear well But underway. and about to

Cathy, or - to you TCA, a TCA? clarifications to there LTR Maybe us LTV a couple backlog can give and follow-ups. is of

million, about you'd was $X.X million. Kerry? how LTR do I it, like, to TCA Backlog can that, if is $XXX

you. Thank

question of next Macquarie. Our of Hindlian line Sarah comes from the

is line Your open.

on Hi. This Sarah Fred Hatamayer [ph] for Hindlian. is

ask to to one working you been student about presently hospital. Since undergraduate X you for has seeing education who of taking friend been your characterize pursuing able high at question been a trending? to like student more have I've top such degree who's advance broadening actually anything - skill you're both and noting XX-something-year-old their your potential seeing degrees in of add breadth? degree Or to a demographic pipeline suggest be with actually Would holds online research consistent professional peers I'd of set while University online from programs? as graduate pipeline the uptick they're whether classes degree my of to level a So online, how an the breadth are

diversity this I a the over broader about in are is - inferred is programs. in the of life little like us I is time in that early the sort Online of than also that much people programs Not mean, adoption. way you for Well, from feel we're more average older students we is need graduated. graduate as that so that is in a the see do that way of - we like world, And of cars an led just the is win sort millennial, by their highlighted, bit in the me, huge you'll process online we for that But cycle. factor University your we our convenience our run the think of electric that stage and age frankly. same convenience. think I in We indication the the something think, our higher that that campus. I've to note have might have also from that would for go, partners since question, they've that of people but decided of that's more not massive fact the the education,

guess, that's over - I but, we'll - time. about more out that So put

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you. Thank

line of from Analysis. the Greendale Corey comes question next Our First of

is Your line open.

for thanks Hey, Thanks. taking questions. my

about I'll on, the follow-up few. to talked you but of number things Chip, questions that a actually, So I'd limit like to a

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Yes.

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all the So the within length. normal of deals we've range, announced share on that in are

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change? that if ever And

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you. Thank

Alex question comes from of Research. next Our the of Paris line Barrington

open. Your line is

offerings service in space. share? perhaps And as encroach OPM the the a Howe on spin-off sitting in and the moving arena? as able for to from just Good is breadth of evening. Paris. any change what your This profits XU we're Chris way, much and trying Alex on Will their offering depth had environment you'd to X seeing to be question the in I

space people XX over our feel moving I space, into general, moving years. now into for folks like our is in So had we've the what

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broad brands than So - like One positive and generally come the a relationship, sort more the see more brands mainstream of high-quality a more of Perdue as and into as space even Capital that we negative.

achieve say the that? you there And strong than the we as should potential as runway Any Okay. one. and seeing pressure more I scale? the can far discovering I some one ever new guess, you're as school? had last far Or color I and meaningful can programs as just new And what out at offsets been, would you as that verticals consider market then provide guess... as on it's

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as year. XXXX, only program an the entire just one example, there's MPV So in

over bunch there new launched of time, programs that a you in we expect when vertical. So to vertical, a be

done will selling just I with more MPV, of by call we're end the undergrad. the certainly with you verticals. in but definition seeds get So notion not And

on Congrats Thank Chip. quarter. you, the

Thank you.

And you. question of Thank next BMO. our is Silber from of the come Jeff line

Your line is open.

to Are just provide bit Are Hey, I could around faster? you little students guys, - very you of you're able the a that process, that. made if get calling efficiently, enrollments good to detail marketing share would more scale can you Henry faster on It some wondering great? you curious the and get color good marketing Jeff. there you Chien becoming since just you're able that any more be in about side. It's like was for sounded at the afternoon. comments

I overall, think, broad I guess, a that's pretty question.

of those be sort now running Brian we're say, And of The people, the job. doing just seeing benefit the opportunity from that a hire, some overall people to So quality able it I tremendous that we company is scale. ecosystem are sort operate real folks whether are growth running that. the, quality would the Lane, the the of of the of of argue will or would that the that we're that folks are at for I

So we are certainly getting better.

it. Got

the looking at kind University And Okay. chance of bundled are that of least there side, you sense, solutions - your from any for from from still, University unbundling? offer? Is your you the

is of choose there over we I student that fee-for-service work. bundling of we new. mean, improves of life said If this are our use not earlier, parts in I think all bundle Candidly, that or think cycle, providers we something it. Well, unbundling, to the I their current parts when various we're notion the

think I of we're whether to it about to we're pipeline kind impact our proves we're the that unconcerned achieve the achieving. of things able

this. has a like And big, pacing market. looked never So it's pipeline big our

I sort for of scoreboards So speaks the think itself.

Got it.

so thanks much. Okay,

to at this time, And for questions. Chip Paucek, CEO, remarks. you. there back like call Thank turn Mr. closing the I'd over are further to no

Okay. Thank for give you, shout I'd excellent his arrows. everyone. of Counsel like road. on to We'll use out see the you co-General out also to

participation your conclude for in the you This program. thank gentlemen, today's and does Ladies conference.

disconnect. a You Everyone, day. may great now have