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2U (TWOU)

Participants
Ken Goff Senior Vice President of Investor Relations
Chip Paucek Co-Founder and Chief Executive Officer
Paul Lalljie Chief Financial Officer
Brett Knoblauch Berenberg Capital
Josh Baer Morgan Stanley
Brent Thill Jefferies
Jeff Silber BMO Capital Markets
Stephen Sheldon William Blair
Ryan MacDonald Needham
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the 2U 2021 Earnings Report Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today Mr. Investor of SVP Goff, Relations. Ken Thank you. ahead, go Please sir.

Ken Goff

I'm and you call. first XU's CEO; Good and XU I'm Co-Founder our Paucek, everyone operator. afternoon welcome and at quarter Relations Goff, Paul of to by and SVP Chip our Thank Ken Investor joined CFO. XXXX Lalljie, earnings conference

and Paul's will Following remarks, Chip take questions. we prepared

plans today, and set XX-K reflect to the of quarterly release in and documents on assumptions our XXXX, December year the our most forth described Please include will such cause actual of for call Our be and analysis made and educational of well as may as that statements. on and uncertainties, Any slide Investor risk press our Relations update materially presentation we recent forward-looking impact the offerings, replay for as continued have factors and website, report ended including available the in call annual regarding on are webcast other forward-looking investor.Xu.com, those or new university and simultaneous risks, of to earnings Exchange Securities with differ Form assumptions. and statements made has this statements risks, and report on webcast demand, next them. our from the XX-Q for this our Statements Form A duty call and earnings operating results, this press refer release to the on file no days. made student Commission, call. XX, pandemic, statements a informations matters. XX uncertainties, financial the this COVID-XX These to the results subject we

measures useful a which from be non-GAAP considered GAAP addition non-GAAP call, and during results. or addition, believe of to, measures in in substitute performance. XU's are supplemental we today's In These for, not isolation financial as as should discuss measures, will we

with that, website. disclosures Chip. and comparable including regarding it Investor our earnings to hand these GAAP results me non-GAAP the find our reconciliations With press release, let measures, in of on can additional over You page Relations

Chip Paucek

Thanks, and like before and many transformation. to of our are the their undergoing degrees XU grad product we and it, world's continue. from to Ken. largest short model now a and it. and Higher strong as to partner. courses. the business the boot camps world's In trusted others for turning digital demand long-term Across best more expect profound entire is more of education The shared that undergrad success industries midst one so of It's was XU universities portfolio

of XX to for be XU. that target we marked case expect XXXX, important on a our the Our for generated cylinders we've which partners billion be on business year which deliver than for basis. end. strength larger on outcomes scale value fantastic numbers, base turned positive much tuition profitability. in will we guidance more which with approaching quality, them. Notably growth The were flow QX, a all than To that of cash annual our unmatched on that and is our competitive our our revenue first know XX% $X for firing in is results we reflected their positive milestone that trailing X real fast month be students a for in now of and by billion in XU would clearly set revenue year quarter in drives date and accelerating ahead partners. And based revenue an free original

XU's scale how market a and quality clear we will believe and Lalljie, on give as the focus drives CFO, strategic expect to what quarter Our I more want to details and for differentiates year. leader. our positioning Paul the us on

non-degree and most our comprehensive we non-profit plus with offerings from world's universities. Today, the start industry's the power of of scale. XX Let's degree mix best XXX

short Our network our growing partners. expanding is rapidly we're of and course portfolio

signed School healthcare, world's to MIT degree quarter, across business, partners programs our of our with partnership the of two we value XX through now disciplines, unique Toronto. and and XXX placement extended including offer offer the Rotman at those the the clinical best sites. the we we University where IMD of network ranked nationwide expertise Over growing Shifting in past students and differentiated to and contracted in business Switzerland schools,

graduates our Here XX,XXX to at discipline. programs scale degrees a healthcare these a date. powering We're to XX universities. produced healthcare just and is in numbers you give Collectively have impact related XX of few inception sense different and colleges

are students XX,XXX currently Another enrolled.

excellent the licensure model includes XX all placement other than a counseling secured curriculum clinical long-term translates complicated hours at these more us University, Northwestern degrees, our years. over across licensor in Northwestern million have extension line our We Northwestern at the of career degree Northwestern students. Family based an we've This XX,XXX disciplines. And and the boot solving with long-term for OPMs critical working working It's highlight one work at product XX wonder XU and total of again business launch great over which recently players team also across market seven XXXX for now expansion Our in with need quarter this with placements, without field partner, to is a business network avoid parties university States. camps. XU an XX,XXX marriage a no of degree The often partner. agreed This have to now a our also not a and society. agreed for degree, into XU would courses contracted deal early new therapy. a a up the and and through of I'd to business by master's counseling in is both Institute possible to schools that of short shows like new continuum. and family the including sites impact major been

our is students the XX.X the college share. the million active U.S. graduate. this but are currently that learners In of XX rapidly expansion, who credit, some part didn't million education to and undergrad market. largest is business of of gain we higher undergraduate Speaking XX.X – growing there have Note active part continue alone, a and

degrees number first and LSE undergraduate January of degrees had than XXXX we're offering in across of a the since than excellent from generated to countries more demand less year. at XXX Our nine grew one

within of of with we of any days – HBCUs, in interest Our had new really initial we expect Morehouse as one the initial February offering one top highest entries students that the the has prospective after levels announced completion from marketing, undergrad degree us the market. few a of nation's that one College, company of more attracting and thousands before this first ever paid seen announcement in

Let's turn boot to attention camps. our

greater fairs. relevant including our XXX-plus listings, current represents students of and we State employer become training powered to XXX,XXX career changed career like a has the camps. to our tapping to employer alumni States we and where moment career think boot and differentiated ecosystem, and value quality of Congress plus job drives of scale job no resources and value degree been webinars, The make students Biden scale of Farm, one job the our powered major XU administration, partners. network really the growing a More gap mode At to skills focus the bipartisan boot we It's a a cost career is out. partners, XU when camps further for specific engagement and this the and of real. expansion unlimited strength By differentiation. drives support difficult and and effects are XU. this the and are competitive to XU's our More access reinforce recent competitive for dots central will And placement engagement career for job scale thousands alone, XX,XXX providers. able students. Americans scale ways delivering partners spanning at All Columbia believe of the career District including Another programs. market. figure believe we referrals that's partners part believe XX network and of This network adds our expect and not our each to quality between opportunities, and We toolkits, and to been Historically, Google. year us to upskilling of XX virtuous four and enables others graduates graduates expertise has Today employer in opportunities year better major of the of resources tens have competitive unique network be year. and XU drives universities business and Deloitte are into are more growing reskilling do camps and companies nearly non-degree for and connect will capabilities no offer because and the career and skills-based our higher employers industry non-profit the colleges and of to our and strength job boot that ed to able only to else leveraging our replicate. resources free

something Speaking of end The a build only of business want most way all, carrier student continued outcomes doing strong matters win years. I been market is outcome. on and one, success, the to what has sustainable over rates in deliver to education truly retention graduation quality the to to is It's improve for XU which day why have students. already from and our

of week, from student in those Gallup. of quality, new any our the in in we our You by not leading point report. way education can delivering numbers the outcomes. quality and see experiences our focused outcomes compelling with comes Gallup shows second and proof is programs released XU transparency Last that year equitable measure but A our degree it only research, research

of XX% from XX% alumni. XX% degree alumni online Let black the that having findings for report. is number programs a are alumni key powered outcomes, career XX% positive me first-generation share for from few and XU and graduate

also career mission along experiences a original can of doing business promise graduation truly of importantly, reported Although believes for to career students we increases. together equitable wrong. a education the salary way education, inferior alumni XX% primary deliver returning the row eliminating motivation it. school, the education back is still increase was still we outcomes. pay delivering extent a and higher increase We're positive while online more we're of this the not that in great hell demonstrating proved and online our on partners, the education built XX% anyone by company's after that graduate And them fulfillment of To reported with the and significant far

our you Q&A. I'd to it to take over return I'll Now through like fine Lalljie, and CFO, our Paul results turn for to

Paul Lalljie

XX%, an in $XX.X XX% quarter a first million, came nutshell, cash for increase quarter $XXX.X free million camp year-over-year of the basis. of We totaled Adjusted in Expense X%, growth. Revenue XX-month and XX%, million of The significantly million, improvement afternoon, We strong net margin across quarter This $XX.X resulted expectation. totaled the last revenue program Thanks, while Chip, loss growth basis had on a and trailing all a quarter first degree flow in EBITDA with year. from EBITDA margins than expected at the the trailing portfolio. on an that a a a positive course revenue growth, results quarter segment $XXX.X and positive on XXXX. XX%, year. grew basis, the cash million. $X accelerating start everyone. flow XX-month boot than outstanding short grew XX% the a of a saw we to to In lower very free better the strong XX% reported unlevered for exceeded good over

driven in equivalent at revenue enrollments, segment and showing XX% a a in a number quarter by while X% the a a of revenue grew boot alternative increased year-over-year camp take growth quarter. degree was quarter let's revenue cohorts, strength year-over-year. revenue increase Now the enrollments FCEs per XX% by basis look was launch increase Revenue the FCE. XX% the rate. Revenue the strength FCE for fifth XX, student growth the last new straight XX% course for in driven products, for accelerating retention in The in year; revenue by the strong both the in quarter, verticals. growth at the segment, was compared FTC. quarter the to of this grew Revenue and and increase quarter for in In increase driven driving increased particularly and and which XX,XXX across out-performance for FCE came decreased for full revenue program closer X% financial

as a loss an leverage $XXX.X improvement costs ago and and revenue XX% Net increase expense EBITDA sales last in for revenue quarter. expenses to a to year, $XX.X for expenses; the compared quarter to $XX.X a drive our XX% X That keep the we and last $XX.X of the an quarter operating of year-over-year totaled marketing and quarter, in year million, year. XX% scale. as last was increased year. sales million, million $XX.X improvement and Turning margin. improvement total Marketing million and continue mind for grew an to led over to million compared point totaled total Adjusted percent X% the to compared efficiencies

X the segment segment growth. from on Moving margins, quarter. year the driven improved by in X,XXX to to operational to initiatives for points the and degree of end the came efficiencies. scale quarter the higher in in totaled integration benefiting at margins ago compared credential last Margins XX% revenue segment, compared year, X,XXX from at driving the quarter, Head count alternative

collections end from in the receivable balance partners. balance from accounts sheet; to Turning quarter. the was up university by million the totaled accounts million, receivable driven $XX.X the our increase our This of $XX.X of timing previous

has with receivable kept of at first came quarter accounts seasonality the $XX.X working last driven year XXXX, Deferred degree In up our primarily the revenue quarter revenue capital fact, the $XXX.X growth. in of segment. million focus from by despite flat a balance fourth million, on strong in

in This ended to quarter the operations report quarter operating by primarily with cash flow, and that to related We a trailing $XX.X a coming of million. million million was cash generated thinking XX-month spent quarter $X quarters. from we positive $XXX in debt now context a ended some I'm This of the cash balance positive expenditures long-term in year. turn flow we the million we last basis. $XXX.X in capital million convertible we're for I'll free delivered capital of expenditures. proud notes in flow how unlevered driven and guidance with issued to cash on the and about reduction $X.X April

Our provide the results first year. a for quarter foundation strong

for career revenue. a We to steadily. us means has We million growing segment, range to presenting set been longer increase midpoint segments expected EBITDA, in maintained gap of opportunity. up-scaling flexibility adjusted from continue are alternative giving expect $XXX addressing in to current credential targets the opportunities visibility which growth, and economy, a the cycle and the adjusted in to have as relevant we've targets, aggressive re-scaling million, of midpoint. continues increase exceeding with $XX the for good skill The strong of us where range market investments growth revenue XXXX of X% future We $XXX now to of XX% to drive growth. the those million and EBITDA a $XX to to Adjusted at appropriate the the million, is from EBITDA margin at focus

capital weighted expenditures positioned well that We be me quarter approximately let strong expect a very approximate for million we outstanding reported continue and $XX XX million of conclude, shares. To to XXXX. shares to average the on be emphasize are we rest to

move expanding grow the And to performance degree business segment the all continue and let's market, its delivering expect the credential the that, strong Operator? cash while continue We to to to alternative session. flows. margins with generating than faster and and question-and-answer

Operator

Berenberg your [Operator Brett is from of And first Knoblauch Capital. question Instructions]

Brett Knoblauch

quarter. taking Thanks and congrats on question my the for guys. Hi

Just leverage curious funnel? feel. something acquiring would and or that into – would and building a your I starting over at website that acquisition marketplace marketplace be thoughts it's of own consider changed bit Is or the your type look your last student a resemble to about in different of terms a you and you so, entering it's of bit year type and

Chip Paucek

is important think do apparatus at through a strategy, don't quite world-class we the scale of marketing So XU think that elevate that XU's I brand our would most realize. by I say and powered to continuing part the and today

partners. explore driving enrollment student all for to continue quality university high facets our will we of So

do of we announcement a leading. advertising and launched and education from an source You at week about industry it advertising for right reach an a are fortune university and is fortune our the the for vertical noticed team that magazine, to Brett, partners vertical, might've us at new one we excited this scale key partner that a for think student example,

and will continue opportunities. explore we to more So more

need to found. to be brand out where by continue find to they will opportunities and elevate students We the XU powered seek

Brett Knoblauch

just of they to really you I going to during employees? quarter, Guild. a Understood. maybe partnership important with expand take launched maybe follow-up, the And place? partnership? When that How corporate Do you had a that was financials good going work that's thought of guys one upon plus the base that's million install given X

Chip Paucek

Yes.

from that part operation the beginning So know historically large think, I We that call, And now. been distance built what definitely growth by a a built back-up billion higher of way a guess in has consumer of is enterprise been this $X the are at a I would that, scale the obviously you funnel on first of way. letting has I particular these differentiated revenue spending as that I snipping I our think ed dollars we're that most said isn't in marketing community.

in boot Can And part couple that hear camps and career business parts network her found to find demand Brett? courses call. We degree engagement to and so to into launched one much growing industry think on The sorry, you power of is been to leading I'm opportunity we feedback scale from getting fastest opportunity. of of of ton enterprise, create, to-date Romer is a employers. terms key very the it the excellent in can Guild Rachel of we have growth the short of Carlson story a our company me, the those is in with the partner today. into do – years programs great the and enterprise an the ago,

Brett Knoblauch

Yes, can. I

Chip Paucek

you sure having can want so the some in me. challenges make hear We're line, Okay. just to audio

part the relationships mention in standpoint the products to prepared available be think for opportunities is relevant. their engagement very our So does remarks, of build And the that network from employees. didn't creating it employer one strategically we career to we

courses that, in an increase is think to might've Norfolk oldest so of selling announcement seen there's And applicability our State powering in the our with technical We part you diversity camps Netflix that with boot of camps in and short there. workforce. part University boot Netflix's were us great

So we alumni; our now you're about partners out but and and business of XXX,XXX we our ecosystem. out enterprise all great to recruiting of sort camps opportunity of boot employer us opportunity do not talent, that of see are drive very of And ends much business. all that like degree just course growth so the our short our talking in for

Brett Knoblauch

much. so it. Thanks Okay. appreciate I

Operator

Next is question Stanley. from Baer from Josh Morgan

Josh Baer

degree Thanks results strong the congrats could and year, for of you expected are expected lines, help and launched end different for on of currently question, frame maybe year. be the across to potential by or hoping courses the launched that context either context be Any for camps enrollment FCE the boot helpful? programs to and quarter. by would the providing short ramping any or this was be next number business the growth I ranges

Paul Lalljie

I'll later this and Josh, it on. chime kick So is Chip in Paul here. off will

consistently comments, the that Chip's we're benefit a the things that be year basis mentioned scale. of he on billion – of we've truly in is said manage $X of at and that shy from the portfolio business of is we business can of a in one we're the end benefits And One of portfolio the going managing to we basis just we're the – revenue.

of maniacally short that have way friendly we side Operating rate businesses one-time activities we given a agnostic return, offerings is mention do Office, Why nature. can degree that we'll the on in I across can this in side we the team market of the cutting therefore the camp we his think an the of because and that way? is efficient That the of we of not of service we delight new Chernis the – do launched. I we better, business students calls, course in allocating That we highest is benefiting Mark that means is built, if If have the operation. free is – or cash measures, way EBITDA expenses equation that improving of reducing also camps the boot the are from number that focused flow launch of get cheaper, some programs the quarter degree or expenses we build on customer is How we of course side are trends. implement we not of And How is a larger truly because a those that and efficient business that or it way student faster? number because I than some and mentioned progression we're types a capital are scalable Chief degree And the on what of in the business. in can number a equation, not seen profit courses that because the we're short friendly. we're business we it in in boot that think are have that programs. one prior our courses or in where you've

more So line, some have us for and how profitably flows we end the grow and and day. holistically the about is top cadence our the cash of less it extent growth about at can EBITDA to

some somewhat from extent, to very perspective. different a at it So look we

of good In to and continued FCEs business. for indicator revenue of be the – terms a FCE FCEs

with the program LSE, programs fall is lower revenue business in of what degree Simmons are the enrollment within but more example, lower those we with because FCE, programs. launching just the of year, for per However, have and last cost

shifts the us per FCE becomes go mix So less forward. relevant to extent some as we the as revenue for

thing because bottom We delivered really, So line we year. line look, good good but the is the the accelerating; that in right? back time. most meaning this about through of feel proud sequential maintain current were course positive And quarter the and sooner as will able is, the feel measurement speed; increase that our year. think how we and our that. flow to around kind numbers be probably you and we expecting would as able some bottom good Chip, we're a we measure the don't we the look that's our top importantly, is of were success. at that through street investors to flow QX. year, to community the this We more know We I to the progression about I that's add success, want really have the the and off of that – cash towards our free go yardstick line we cash somewhere half quarter, And QX, that and equals if the free

Chip Paucek

thing Well, the is, got historic got degree camp Josh, we've we've add programs. at this would stage, only that relationships our are I short some course of and boot than larger

So even holistically. at cadence a from our company. you categories. yesterday to about, the really a Take new as program degrees. degree look we years three continuing all side, we're on program It's is schools do today, across of what kinds a Pepperdine, with as mean, product Keypath the and program have it we're Pepperdine. they're one degree not all with Launch announced now of marriage early the just I that different seven with to bit though our talked relevant launch I that's with the family XXth University, working Northwestern and term

getting by today. together numbers an large So is the obviously announcements in all close today. successful something appreciated to a we've But partners. expanding $X the just isn't university example are lot revenue, do you company If you how about landing that how these our that's and definition, a of just with right? guidance fully been degree have Like a that to billion to another not adding company, it's I think get of is on raise really

it this. partnership. takes opportunities. Guild in It enterprise logos It new IMD. degree it It takes our all So It takes takes takes short opportunities of course a Netflix, like like cadence. takes our

things strongest about been We together that is XXXX. create feeling these is our like IPO feel company of something pretty since good in it's right we're this now the the All company – where going.

Paul Lalljie

scale each position growing said this out, that's we our I mean, if benefit we apparatus us across think our I And this apparatus I and secure. to Josh, of such in allows is what is our to a think from faster is businesses. then be best-in-class, keep and before that's, marketing earlier, marketing mentioned there we close something for And market,

Josh Baer

If on return I versus And It it. you're understand managing – might somewhere we, just of exact biggest of Got you there be basis. that them, of is the sounds shouldn't the between guess, focused than portfolio launches other. like driver other. could growth, There else. company about or new each I be alternative huge better bigger because I there lost be might if a credentials, as drivers, this like one I could like too on analysts mean, the might biggest the follow-up, like growth, one be thinking enrollment launches, it from the number like think on focus I is, whether degrees comes

is last outside to grow and market the the So trajectory expectations that's of growth ahead trajectory about I good of guess, that of like, comment thinking going to framework a support try growth is Or kind to forward? for there it anything else look that XXXX? investors the like should around of

Chip Paucek

that doubt no have we, I go mean, I ahead. sorry, Well, Paul,

Paul Lalljie

please no, sorry. I go, No, apologize.

Chip Paucek

that somebody it's learner for the learn we now ballpark ago ecosystem is degree operating our come from meet we much about somewhere across to and to to opportunities larger have faster, those they to both. needed broaden their years create learn, opportunities for go where people degree across to the without the believe system met, alone to our segment this Alt to in needed the happen million be I XX that needed We just folks into business shorter strongly our there's the decided degree many learn XU where particular some And to and And learn. in not competitors business. of to certain today. that's we're offering most growing tie the learner question first and mean, and Cred the to candidly lifetime. better this in to of than Strategically, need to way, courses when we to at and getting they horizons Josh, to need

business. You saw the degree an acceleration in

the in tech up for XX% a schools all business Alt partner doesn't but you become end from revenue university you how in is base that really family get segment base honestly counseling. combine that that seven pretty continue, institute disciplines revenue is school we with the to Most key and the on to that the to expect for We that of alone. When them, that impressive. across range Northwestern, Cred

or those is has the you're for clear changing the love impact question what XU. president for growth undergrad you about we transformation a provost are you if no is why company that, somewhere There said happened years clear in is see which that significant that us the the So the the in is consideration because we to that set opportunities. are this than thinking of undergrad more game coming. were space they're starting most great It's expect really from education. It's undergrad COVID we in digital differently two And ago. fundamentally benefit country,

Josh Baer

thanks for insight. Awesome, the

Operator

from Your from Brent next Thill Jefferies. is question

Brent Thill

Rule the on you the you there you're to you you Chip getting But you can six and on top have view how on know I take just Thanks. get the XX. that of bottom, outline hauls guided XX, and your of the to the know I you a Rule if can team? longer-term Can how important quickly rest is and to talk you XX aspirations.

Paul Lalljie

looking for Brent, at flows. of but some and our XX hold we healthy how maintain could me I use The go I continue Rule there and get XX. the EBITDA, and start let and to use recognized the in, we think, And I the the guide growth XX jump will is to a through some growth revenue progression. going and of way, are value line margin I we're and a stick, yard look this it to as go year cash which expand as XX or forward. to line ourselves us bottom the maintaining accountable creating use and full is at on then, So, growth use off is go guess here Chip beholder, revenue we right probably improve of XX, top-line the in but to XX and you're the get the eyes lies way the Rule at And this. which to is quarter, to

there provide meant to – the a when as tasked [indiscernible], and bottom through cash basis us, was in for us positive XX right. XX hard a of in – good when For XX. half back maintain going a this there do benchmark, QX. end EBITDA crossover we improve of month We first level. our of to processes we where or at the on on tasked into cost ourselves, things ourselves basis with to very It exiting results that it the We XXXX. we it we the We're be our Instead, getting quarter. more the back teams on lower year to time for I to to marketplace. EBITDA ourselves that to that we use is business, us It that a we the to things, into are allow worked going to sit getting from continue cash with can is as did that we something in do passage improve those but flow easy focus because push on positive. can how efficiently. we're gotten at the ourselves line achieved us on. to here's laurels, We the it XX year. and the things we're all is in will not flow had was going within deliver go be the are to We benefit cash of the here to demand positive XXXX And think flow year-over-year here, important is and how is ask And XXXX. positive is we going to momentum of trailing we very very Rule We've continue become XX Rule

we to targets a Brent, but So that you can on think aggressive to ourselves of continuously XX assured. year-over-year set I look to internally, will basis. continue rest improve us Rule

Chip Paucek

are add a life. of would is stage I we I what at Yes, mean,

of is and presentation, you a pretty years, – company proud market work the will chart, what them crossing We the themselves. will We're that tell are put has of let happen seven a while to do is the speak prognostications to the accomplished not out And a public I tremendous what incredibly Slide XX as earnings and free cash look that we and of at XX results sweet as What basis. with Rule last are you, for flow simultaneously if is company over on our two amount leading a giving in growth just going years historic willing that long-term there. milestone.

we to growth revenue about thinking company. a version XX. like are is of EBITDA our clearly we we and Brent, as improving And That of as it together. continue So mature odds Rule our really

Brent Thill

from quarter, Yes, trying to to that the trying in Paul, the outperformance. take I and away reconcile just relative guide wasn't team more your on to the

the appreciate So really Thanks again. color. I

Paul Lalljie

Thanks, was All mood just trying lighten Brent. good. to here. up I the

Brent Thill

Thanks.

Operator

of next Capital Your Jeff BMO from question is Silber Markets.

Jeff Silber

Thank much. you so

in wondering know more the American it down enhancing prepared unemployed. what employers, Thanks. from attention be impact we I'm think the just could folks D.C. it. You remarks Family of alluded paying at Plan. this and got President news chance for on about to sets this you there because if Biden you look your your about in employees, business to if I skill morning any to really a some and had

Chip Paucek

Jeff. problem, No

bipartisan So on There I that would with the – would we're conversations clear focus days very the saying Biden say both and by been of administration. a is the we've on I upskilling. early and pleased having reskilling Hill start

and with for university which directly people We all plus is doing not great is the over reskilling balance that's the in workforce country meaningful the partners something upskilling have the done, university has at great a that scale. historically regional XX great way where

were positive. This think quite a a real and about building on is related And so that focus specifically a morning's graduate excited to strong We that with for been degrees. opportunity skilled announcement, the that's healthcare workers company. the healthcare we actually pipeline healthcare of

all the They a scale their that nobody quality else practice. across a Yale their get a equally example practicum, the graduate really on healthcare only education one University, look incredibly then from And is quality doing side we area with degree important. I about we're return our quality really education. at kind ultimately those so to that Yale you high local to country. of just by They think is over today, noticed program If high but getting just fabulous program assistant do students business take to healthcare attend to at program, think is come but not level, care that close. physician And

on we're we're with like overall, pleased we see. Jeff, discussions so So, and balance having the what pretty

Jeff Silber

a IPO Okay, gears great a competitive seeing States. that's bit you or had perspective? from space this competitive a a to month a hear. expanding more in from seeing perspective, Shifting Are lot so a the about We companies pretty successful we've of been ago. in intensity

Chip Paucek

honestly no. not, mean, I

that a time, were IPO, I been for very now. So the as happy them. long for in quite some they've would have company successful for been, existence long as time you're not to we referring And had that say, a but we

some doing If Jeff had folks of the this been the And in fall the you've so, competing and players. anything, more. ecosystem most with by wayside we've more general

it able be to to at scale. got You do

to high ultimately in over what a things outcomes. things. the prepared quality. standpoint that we've with retention if You've rates. improving sometimes focusing businesses at pretty decade, some remarkable mean, do of the look the going on importance we I cash to to do from you about think be of of these important, judged things flow these been They're it be and on what's able one And it's retention rates all of quality at I Rule talk our of our XX I understand when got but progression happened are and graduation the the able remarks, to on

our for better and faculty very better scores, very the promoter have about students programs for and is pass we're that feel the them better, getting is the net high. our current system getting We and rates like our So, board are the feeling better. effects strongly and

to in somebody positive in the the they're scale more from net compete we And promoter with it us. those a drive so where setting students. innovative. today work going some we been hasn't field standpoint, a totally social virtual different of practicum just I And and career We the is are did rolled the new PTSD like dealing And and before with programs. first, an of from innovations for examples a PTSD for engage virtually students called that think just players combination And feel our smaller to quite clinical anything be for a the actually to of for like or example war it's then an from actor super the allow with everything deal a that are competitive company, our live with lost off from the something who's with avatar difficult seen to The an So someone or engagement in portraying fire. clinical setting, to returning of network. out of eventually they It's might in returned we the to the charts programs. like education scores that with war lead continue couple and it. innovation more a – take based something have quality, in higher then year it's programs somebody this

wayside by So you the bit. are a folks seeing some fall

Jeff Silber

Okay. That's Thanks. really color. the helpful. Appreciate

Operator

Stephen from is Your William Sheldon next question Blair. from

Stephen Sheldon

guys thanks. the this just commentary next that think factors it? this growth as quarters? just drove Great the much into can are guess be type we to that or the the see earlier. some acceleration gave degree acceleration And playing how can in about Hi, quarter? you in few undergraduate sustainable How of continued it the But – you segment, talk I frame about programs

Chip Paucek

Lee Managing the proud we're just incredible doing So, is and business. are her Director job. Ebony of degree for degrees the team very an

percenters. any mean but it's that I would anybody, you large have we very to what these say one the won't And operations sense complicated. make that are So they're that to is internal and term XX we an by called is

student the a student. like we drive student mean? I Sheldon, graduate, bunch wins when If What factors programs. – we successful outcome we they a win. I success have that the And where enrollment. ultimately mean and our a retain of there the So they if if is great does successfully student, and the career a say that don't student I mean, are typically wins, a a business success for in university for

improvements small there's – driving one XX we really team rate, It's bunch the categories, not retention that to the improving of thing that a it. going driving a great percenters. It's dial. of is across different so from activity move a And on like say one focused collection

or Berkeley historic Science seeing our which Carolina, would at not you at strong Business bunch a are you're graduated see programs of Data you enrollment, will the high really And that combine Administration is undergrad or which why us got then but quality Master whether And so, you've opportunities, with you've you've Morehouse where student got undergrad be marks. programs launch really from, LSE highs just new those programs. And I got Simmons of all the or historic at of undergrad. it exciting Master

focused and lot actually service degree day. effort positive of every among the guiding – of It this for That just our principles. on is is what mission work place makes that driving their is just it's students. a So this a been one business not making the team is outcome

Stephen Sheldon

year changes the are into universities the Great, be a some to trying how follow where short learner degree or over boot you expand I notable concept I guess, want for just an of to the I pieced to over update of and concept can get guess, on certificate course and offerings or so? larger alternative thanks. by as stackability of the apply piecemeal And last have seen, offerings, credentials, continue specifically up. together stackability And a a then, these time? camp and they you

Chip Paucek

Yes.

take for that one So could Paul – probably you. I

from actively pathways on a for whole in are one opportunities variety universities other. different to have to working of people the product we So

in me You those able to the have improve to close being their our XX and other great lives. capacity opportunities people offer university partners mentioned some million Sheldon people, that come world heard to into with

And an And degree. from there business. across credit move think that course short opportunity interesting so involves do will be giving to a sometimes opportunities a that we somebody that to the

focused on pretty something we're pretty, today. it's So,

Stephen Sheldon

you. thank Great,

Operator

have we time of your MacDonald And Ryan Needham. And from question is for one last question.

Ryan MacDonald

thanks taking Hi, for questions. my

really clearly partners, application demand we've of we service do able we in seen am to demand ability any trends the that year? they fall are segment start think fully talked half as curious what just about grad I is one of have on for for the of spring to seeing second And your be that university to as you enrollment. some First Chip. demand Chip, the strong to and cohorts today cohorts? into the terms bleed

Chip Paucek

XU Well, ensuring are is powering – case for that that is to supported. includes program, that fully certainly job by a of our powered we and the In experience them, students definition work. are powering the

Morehouse very our a working imagine Young, has focused Chief at for talks college them been program without Adams, such program a to that we've you under ready brand be as is a operating you the the And going clearly incredible So it, And mean, with Morehouse, great some can will borders. opportunity with operate to get GM, hard Americans There at. Operations scale University very really that Officer, leadership like new Brad Karlo David is haven't credit – large the might And handle the helping today team of we're what's that university on the history. institution people black are I million President, about the scale. Morehouse that XX profound. an for time the with a Thomas completed. for first it's

really quality attend experience Morehouse a in world. high and the have anywhere from can You

of pressure job make job. is sure the under we well. to so, And our only and them degrees And seen a I world for under the which ready not get but demand And our that on under. we just tremendous well for open, stay the handled side, to undergraduate during on incredibly we on That think graduate COVID what was that liked we schools it's have not our were side as doors amount the that. have

you all, not the certainly point, that under on is our operate degree model provides, or else is And it been on in the success to can we've but there that expertise instruction sacrificing just the it things that side, a on And some everything to more interest on, doing to that how from call the of bear, large what impact is is capital component think years better process. the but are XUOS, bring than shared the capital not in ultimately is definitively demand side. the three scale And gets at the I'd and what not expanding focused now our COVID model pretty do And very out do tell of four much it note we was I one footprint quality that under but efficiently where more we we on the powering So with ago. some a just figuring you. Ryan, opportunities scale where we're bear. where university and on we

our able went quarter in So today, growth as kept to flat. year-on-year, you we of kind were heard, Paul achieve down headcount It the we mentioned, a little still XX%. this and

on Ryan. now, cylinders So, right all firing

Ryan MacDonald

the as wanted and that And I ask to win opportunity. with Pepperdine follow-up, decision Keypath about at Great. on a to the partner recent

the partnered is only Keypath this with program maybe you think on. second I

of Thanks. going the how Just delivered or anything? as partnering Keypath priced program? alone are sort solely versus XU if a just decision the does what of right how structure wondering the change And programs made with that

Chip Paucek

get your sides. we that mean, what you're our and yes in I high have a successful understand partners smart unless become to building of way operation. is strong sustainable incredibly get Pepperdine, are quality to own people you works operation a don't for no. So say a we to instead – right. at If Dean keep finding a to are can saying a these yes to And building both

able great happy. set. and be there an Keypath to our very the And – is company. been part team We've firing And with pleasure. Steve working being yes, say they're of absolute tool to has clear so been Keypath a

with someone to can the just so partner our we're like do it. expand relationship, going with to And Guild set, if we else opportunity

Ryan MacDonald

Excellent. Congrats again.

Operator

remarks. over for back Paucek call the Chip turn final now will to I

Chip Paucek

us joining on you Thank Take care. quarter appreciate the seeing we it forward look and to this We you road. everyone.

Okay.

Operator

call. Ladies concludes today's conference this gentlemen, and

now disconnect. may You