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2U (TWOU)

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

Good day and thank you for standing by. Welcome to the Second Quarter 2021 Earnings Report Conference Call. At this time all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session [Operator Instructions]. I would now like to hand the conference over to your speakers today Mr. President, Vice Senior Goff, Investor Relations. Ken may you begin. Sir,

Ken Goff

XU, and Thank Call. Second XU's Co-Founder Good and Relations I'm Paucek, Paul by everyone you, afternoon, welcome at Investor Quarter of our Goff, CEO; Vice to I'm our Senior joined Chip operator. Ken President and Lalljie, XXXX CFO. and Earnings Conference

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

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

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

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

Chip Paucek

become right programs our universities the of done connected, education scale, Nearly have industry-leading for education online core half driving XXX-plus we a accessible, what at and we're be blended, higher later, can proving in brands lives retention With in and transform and tuition we've institutions, XXX,XXX and we've outcomes sustainable. helped building students, delivering over while for From billion $X increasing their our graduation XXXX future. the Thanks It a start online to create wasn't -- our high-quality been create on Back relationships, Ken. started been started, couldn't whole with edX world's odds same where bad. to outcomes, for given quality. call then today's where defined in the XU has and education the ever the reflections education great. we've online want was what be some We It that bold holds, I and vision bookings beginning generated partners' over invested life-changing the had at the do, of that said non-profit vision same always outcomes news. this People company thing. online all we've since. we've future as best same rates. affordable couldn't decade education examples great the the a the the people. and of

offerings. marketing the engine along we scale You find placements XU been to our XXX-plus We got would positive machine built report at any scaled degree very students and XX% good in see Research. proprietary and We but just student journey, and evolving. over career again. At programs XX% every XU-powered impact of We step has in it clinical outcomes figured at all Gallup what growing our we student. degree per this right do. out not learning-based do our

As we to degree. that needed beyond learning lifelong non-profit saw we the recognize for market and universities demand move increase, the evolved the

we more the tech provided in a for a referrals, months us United past imperative, students acquisition reached So, new boot acquisition pathways as made while space upskilling the skills enter education free training XX,XXX And recently, the States. university-led alone, job as historically course. partner's communities than strategic camp become worldwide In provider to have and our rescaling boot and executive our has all tech of industry. with short XX entered established XX,XXX have largest creating more the and camps underrepresented the over

part largest of bring our And first most some are College programs. to launching we recently, online our higher help now degree borders experience a beyond move vision fastest-growing Simmons entire the of for history. economics, the a school programs learning launched We life one online and with undergrad. in into the built launched which of their becoming scaling us Morehouse XU. first continued its then education journey and into largest Our campus We degree, of by

partnership without also out We an a brand. consumer including courses Netflix. first as boot establishing our then channel, XU our started with with camps, We short program groundbreaking our all did enterprise with building quietly of this

XU the of most NASDAQ result, a matters and our people they motivations see this doing when is aggregate the of brand. is they're the regardless businesses, we're profit-making The outcomes. activity right, importantly, intentions, don't scale As right region our right don't the because around What ticker. often right about that TWOU skeptics impact, our XU only appreciate fully they thinking the time

We eliminate higher and are delivering the to mission on education. our

all the and And And lives. both and around transformation recognized Anant educated. missions. closes, to higher of nearly for online Founder consumer of evolve. the edX MOOC get to the pieces. company set degree lightning CEO it They and an comprehensive in campus with And of We drove vision then, perfectly of and we edX, the powerhouse X,XXX the world's with platform and of MOOC ed, be believe signed necessary fuel Back course, the a platform brand, vision that the our happened. COVID But built online founded and bring access to born ed greater transformation online open a industry. pandemic on the and strategic XU moment universities overnight. in brands a Agarwal, to to world campus. combined tech-enabled And importantly, started more access than offering, millions all unmatched edX journey, our offerings transaction, complementary it creating non-profit to to XU schools and around to globe the learners revolution worldwide happening course on XXXX world education. they were yes, that, and of Of of fitting during ingredients for caught XXXX, digital of companies added high-quality the higher continue MOOC the we'll a non-profit, people the impact learners. transformational ed the really the the were into had its alignment of free to bottle. education, story created they edX will high-quality model reinforced They One to masses. impact. digital learners their will They both to saw impact. in long imperative together, the education services. we're on have Their massive the edX attention, companies scale the drive following, and that puzzle deal also were to to story. the most value the millions to and accelerate global sustainable higher us, are bundle affordable will tax When for additional our worldwide we and status this alone in from supercharge became huge and a around a happened, our education, turning and reality. most higher believe a XU's we company leading courses redefine higher pathways millions worldwide opportunity of shared have nice clear base and generated When our will teach one taking allowing to worldwide about is, talking big up supercharge global new impact two for platforms. I isn't but both a There in the for approach helps the building edX however also ed we profit, both a MOOC. to a additional

is about bit a learning leading everyone. education edX how. brand tremendous brand, massive about five more education opinion, edX huge word creates anything relationships for is let's for my than in more top a as Yes, talk global traffic. has But a platform So, opportunities the a else. brand. it

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as worth a will but overnight. repeating, us Finally, said brand I consumer before, global it's make edX

Now, let's industry. talk about the

XU that transaction, be transformation of education. positioned no of than a closing higher the Following worldwide the digital lead basis to company the better believe we edX will on

XX the system community, backs and mission of institutions Purpose status. will digital with XU more a and We a on this transformation. MIT, edX hard of approach aligned effort bring in is built true to We're full the tax the of community. partner work complete important than great the one Harvard, for years partner and build

to this to But In alignment that. fact the best efficiency deal more a Mission our outcomes competitive universities ability provide drive for and clear will that than is help a great non-profit It and signals students. innovation drive race. advantage era new matters.

products and years? We scale will is impact an world-class reach offering changing learning space it primary product partner and to the together learning the market. in the center. XX race at top system. a a will and every captured across student what tech, system coming like deliver to putting of outcomes-driven We employers become brand and universities global about this In this and will consumer universities and products network. world. and marketing marketplace win and everyone's proven redefines on us attention. approach scale. to faculty our our outcomes the high-quality With world-class that race believe career built race we Who universities, great Learners their next our This placement built world-class and platform, serve do building ability the services to a of We're edX worldwide the with We of learners. between engagement machine While matters at a to comprehensive matters possible platform unmatched, layer approach million have because the portfolio engagement takes it their and brands solidify we odds. on has XX quality certainly as I

it size And saw digital margin to driven more with advertising part significant knows expansion, we last provides out we how line, the with not for momentum board, I the you pretty current impact people easy. on of the are all Google's And Driving stellar. results. is size Yes, tech generation turn been to degree some no we at side. have Ed touch given will that in impact year, There's this thrilled. real much XXXX, year these particularly if their with comps hard and credit a given would the into higher of earnings, briefly our short-term COVID I business XX% of digits over clearly But global profit. across cash Before consumption knew single COVID in the free in were coming let for as would Paul, grow in lumpiness all really this are than by XX% education. at year. profit. getting top more the one clearly thought growth in our costs high QX larger-than-expected houses. XX% growth me

quarters schedule Our with strong six did acceleration launch XX-plus and of degree a year. particularly well growth and percent next very business for

strength hard business alone our the have slowing The Some single imagine. of projected to that growth to for makes year. our and degree of new digits number next launches

growth launch on schedule basis look revenue offerings degree being we XX is plus organic next rule efficiently. definitely these and with of part degree terms and year more an at XXXX we It to growth total improved profitability of of expect and solid doing margin, looks like more Looking EBITDA that. of better our in number are

We're Simmons We a MBA grad scaling for have and strong market with and new undergrad the like partners several the LSE begin Morehouse, on demand. excited expect to are meeting new a few degree programs that clearly leading indicators, other programs and their to University side and including shortly. clients Miami working of we announce

most confidence cost that all to call we've even important evolution. at importantly industry term strengths our XU the is a this thinking. Universities is enterprises, to learners before technology-related is all comes and in back in known a stakeholders, offerings. of consistently its The in and of take best and in quarter On particularly top Spain think for fruition is what edX University investors, great XXXX look Alt for a volatility we credential for And us I transform. expect of is private our new combining universities to launch step really We strong major stellar has tier degree top the The it's regardless the with have Cred, some lead globally. trajectory must Simply in partner win ranked on university a but segment. IE going with our long-term. also that should will milestone massive edX be business give for growing. is and the deal is alternative and signed you an the and and announced, us our news the be guide uncertainty Spain holding a suite COVID put and our shorter business given school agreement and IE new first you to of partner. the

We of of or row we in not the company's big promise higher original playing education. we're back the announcement, this are on delivering with eliminating edX go mission And our choice. made the home, Go around.

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

Paul Lalljie

half nutshell, XX-month credential flow resulting quarter the everyone. on We $XX.X growth the quarter, the unlevered reported over continued margin a of growing on our basis. totaled XX% and grew XXXX million, over of million, quarter, margin up Revenue year-over-year of a and a on revenue segment as $X.X XX% quarter and another Thanks, increase the well to degree unlevered the alternative XX% positive $XXX.X good very saw million. totaled million a products XXXX, a trailing free Chip, first the afternoon our XX-month second power. of million. revenues, consecutive with $XX.X and We cash Adjusted and sustainability strong business durability basis, across improvement. quarter. of revenue in outstanding In net the million, a for free a solid $XXX.X growth, $XX.X an and an XX% flow Expense strong of second for EBITDA of loss X% model quarter of a second cash trailing the strong for and we of as totaled basis EBITDA evidence earnings year had

in per a compared take XX%, FCEs FCE per X%. per quarter. for high-quality the straight verticals, FCE lasting our period it have year. quarter equivalent the demand in impact. wasn't let's revenue digital which high across we represents and degrees rates an retention per volume of curve, This that increased growth. increase remain degree for launched to decreased X%. undergrad with strength strong revenue this FCE believe products. adoption recently performance This with offerings, the a of of undergrad at accelerating Now But the higher the XX,XXX, or accelerating Full Revenue a for closer a was in FCEs revenue course enrollments we the XX%, segment just showed will and grew sixth quarter year-over-year decrease saw quarter, same cohorts due up continued number increased cost the while online XX% pandemic basis credit. to last revenue revenue totaled strength lower in the the student on Student look and

this announced on our remains see XX%, of of of which stay of a FCE. degree a credential the the put an was as by To economy driven increase revenue by university in the in the the trajectory chase Growth not we In are costs, first per many note recent revenue including framework increase with in short by University perspective, Miami XX% Across is evidenced dealing to market. driven and recently for first XX% we MBA segment as in are the reopens alternative addition, to basis, and an to in of all wins, pipeline. with into Credential we elevated XX% strength It's our the in in half advertisers particular seeing course demand the segment the a our and and digital something grew marketing XX-point at segment increase EBITDA. half businesses and and growth camp segment, Alternative boot profitable in FCEs driving this of in the acceleration that year-over-year increase year XX% revenue grew XX% XXXX. expect our companies a revenue. Revenue important increase reenter compared the with expense

back sales ago opportunities past with If acquisition million, a last has marketing we have higher expense XX% improvement, loss XX% sales year, growth. Total we fourth revenue more and least we efficiencies than against of for the consecutive for last points compared many percent growth quarter the marketing as to especially quarter. continue second a the XX Turning was there the and of over marks are operating drive and quarter year the million year. quarters of edX. And improvement This growth drive and Net to Compared percentage cost quarter over the where revenue increased $XXX.X revenue further expense $XX.X benefit than $XX.X totaled as points. quarter totaled declined discussed more XX from the scale. of as million, look at an increase of expense expense eight to to XX% expenses. to

a margin While sale much $XX.X a non-operating a came from in $XX.X this on million the a benefited totaled Education. also quarter and from expansion, improvement investment for EBITDA we revenue $XX.X last XXXX of Adjusted million the margin of from year improvement and million, of X%. gain growth Keypath

deliver the dynamics We of to expect economy. as through continue reopening to EBITDA manage we the

to growth allocate how As we disciplined profitable across the portfolio. mentioned will continue be and we I earlier, in manage

the sequentially. at Margins Moving on that segment retention initiatives. enrollments, in the segment the rates quarter Alternative I better the Credential revenue XX-point XX quarter, at the and in was year increased first points higher driven cost growth first efficiency earlier with in in of of the margin. XXXX. Headcount compared Well, than half that totaled ago segment the was XXXX Degree mentioned from for to points X,XXX a Margins the end of XX% improved came by degree coupled revenue X,XXX to quarter. margin half two acceleration improvement. the

the impacted million receivable from end million of net totaled for clients' months. acquisition. by at proceeds cash was basis is in drag increase At balance $X.X working due partially the driven million flows typical the up March by well $X.X was sheet. I capital. trailing edX increase Unlevered trailing our XX working a the activities flow as given Cash headwinds was Keypath, from million, $XX.X capital the calendar, timing-related primarily of a significantly the the closed by particularly accounts million, for quarter. This This in of the quarter, up by growth. which the investing the with connection $XXX.X use the totaled of to free our million. as to in signing in from in the was of the net Operating was quarter. on at accounts revenue alone the the increase impressive, of end purchase primarily $XX.X quarter $XX.X investment from flow we cash agreement of $XXX academic driven receivable just Turning previous was cash increases of million quarter cash the $XXX.X for million sale discussed. the end provided loan and June $XXX.X that by the equivalents This in receivable million million, in free XX-month a increase totaled capital cash $XX.X The timing expenditures. end Accounts offset

discussion guidance. of a for Now,

of the are acutely to that in of cases facing the aware uncertainties face year, with the spike companies In are We the guidance. COVID withdrew uncertainty due we variant. similar last our Delta

However, this year, we guidance levels. at prudent our maintain we believe can

around industries across the XX. variant carefully our and behavior. handle of and get We At business. business goes for operating the it have quarter considering same momentum on quarters, it build a try momentum. world for we And degree economies partnerships originally we're of and might of the call a we leading environment we earnings reopening path degree the our good affirmed that in Based new range our in while. going, Delta provided for to sustainable. other on pace seeing as reaffirming see the up first June it businesses a a I've After said is time, for when and business time is on XXXX, and what indicators, factors, in gets consumer takes But guidance to momentum are believe it prior the other that mean and the on

million $XX revenue. the adjusted and range of to million, $XXX is to margin at EBITDA X% $XX midpoint. revenue expect at We growth million million, midpoint a the expected of range of to from XX% Adjusted $XXX from to EBITDA

initial expenditures able shares. is sustainability been of Weighted drive for to expect million, adding million in and proof business to we've the improvements coming $XX launches, points our year. our quarter, which another efficiency reported be the approximately to projections conclude, XX average than strong Given slightly durability shares approximately lower capital be expected new is we we outstanding, To the model. into more

of Moreover, may efficiency see believe to improved we long margins, be that, the over cash which rate long-term a and overall but we in that line will costs, we'll delivering that below in things closing questions. our edX the Delta the trend strategic fundamentally as are the the will term. variability improvements expense variant flow. our revenue quarter-to-quarter, well with transaction, And the tech costs and growth and of revenue from growth, growth into Operator? around all open new translating like and advertising some towards variability strong ad is work And edX position we You call space. for launch profitability due enhance

Operator

your comes from line [Operator Sheldon with Blair. Instructions] the of And first question William Stephen

Stephen Sheldon

Hey that thanks. looking I XXXX in terms Chip, like of, the launches. you made comment program it's think,

frame to program launches So potential at help quarters high the that and little new could that us more into bit can and you maybe impact understand few the as growth have about a think next a XXXX? level we

Paul Lalljie

mute. I think Hey, Chip you're in

Chip Paucek

Thank you Paul.

Sorry.

thank question. Sheldon So for you the

And would start that very And days in is to outstanding way right a sizable and we we'll like have an us. is. of couple XXXX launch seen we which might is you demand January, So program about example we now an what's that's it a strong. program is pipeline the looks the DGP more days that called of of a ago think old what is announced, the great University in have Miami it for MBA and

we've benefit term so that they're longer the just and to own. we're the last built on one partner. doesn't less degree they And lost schools think like seen digital XU. your is focusing we've decade pandemic pandemic underappreciated over universities is fact schools Chronical the was transform. build the It across work the degree there in definitely doing article do Higher of not activity And hard. are that the reaping how something And response digital that are yesterday proud that in that of haven't well reality I that on an complicated. the have schools without that. -- Many and presence about a Education And is stakeholders to still, we if times a today program, it's great our partners never It's expensive. a It's very more

partner since with still offers that agrees XXXX. with XU, university we're everybody a So

year themselves. next how about means excited the as look program delivering people we're to out figure pipeline business and transform continuing for to they So what degree forward for to the

tell these Now pretty I our a out efficiency to that we from long-term do standpoint, also footprint in at this. that's better you important would doing and more cash how And an with we're getting to lower objectives. a manner figuring are efficient

Stephen Sheldon

spend the And if announced. months side, usually year, in launching year, some advance running? guess, is you these some of it. a that a I year when XXXX? spending program and think we're some all know we program to I guess you're about next launched, as on those is the deal these this second asking how interest efficiency is more of, where you to half spending should think when you I programs guess you've of after the this trying programs think get program I'm of get I marketing up getting going kind revenue spend, the that to kind the be launches? related to the And I Got think will about be hitting of are generation got second in including about half

Chip Paucek

state a we degree business three say five-year drive the do a the depending invest spend As we period over in works see to you model way and program. we the know it program on steady the to is -- let's that

with programs, undergrad six over next undergrad we our at course to amazing to look business. the you if of happening do what's And programs expect announce months. pretty more undergrad Now the it's see the

be well. will year the those for as of some in pipeline next And

So means. that excited about what we're pretty

ago degree have rolling. we to did invest pace. couple a years business And the to get the slow down do You of

grad undergrad the up. probably pace offerings you Paul, across I that picked past. appreciate don't offerings more look and at to -- launching want both years think add like degree our size We're anything? that from people today really do has

Paul Lalljie

that we combine have. believe you I line to type The et spend think the And the top mean, cetera, We're this with I going back test game it. the of is, endure then, a is growth of And going of balance. while are edX, we that of going spending positioning we combination No. out we're we ahead for of our the have numbers time. be we're launches sustainable touched And prudent. there with when that to name on have in you half we Profitable margins. with business us. can the strong and bottom-line year that balance EBITDA that growth to includes the

Stephen Sheldon

it. Got you. Thank

Operator

of question Your with Ryan line comes from next the Needham. MacDonald

Ryan MacDonald

sense taking Hi. Chip, heading be question. enrollments understand the semester. for Thanks and curious to would my of into the trajectory fall

you at think far those just look some those and thus in XXXX of student you're really about applications those talk grad applications international verticals in see conversion in I generally applications undergrad. seen across about, programs? major the starting XU healthy of when we've enrollments some degree enrollment in feeling how Can recovery to we growth the into

Chip Paucek

mentioned strong like, degree on got passed we credit Yeah. I students. I don't really mean, the the as total else side in we think old doing a And now very at XXX,XXX is we side feel anybody this in we've trajectory. scale on We're edX. that

is quality. with the pace. many strong over run continue of decade. at to seen So, the enrollment And levels Ryan the the that that the for outstanding been benefit partners on and many the just with of that record look the you at improved degree see have conversions last really get to a how our online experience brands And have side been conversions. Their environment see company programs in what's fascinating we've longtime a the

way. bevy the still conversions courses we've degree are and levels. than pre-COVID higher our short And is So new strong. Demand of on boot got a real running whole camps

really topics the just short are of some incredible. And course

it incredible. we to activity. I And to that than that the more I that here So -- technical our been the founder. then, to from opening much means certainly the will I or to years with together had it's to or we I needs tell The in because about a you be stakeholders on response edX or pretty meet that to spent and of be do doctor a And smarter, boot time an with have non-profit comes us, met create the it degree. seeing there's in you been industry. that, get I was a course love, close to where all the back to acquisition haven't for degree substantial this to a think we And talk of in we've center pretty in busy going that training be And short community. on access transaction And would more to incredible your an terms quite what program. it overnight with what's you an far. this and incredible important call the -- when reason opportunity in we around whether marketplace. the impact going doors can to four I And has to a will to camp start do on and of be mean, become the learning all go universities incredible when a it incredible. team edX, getting layer to in are the a think from great diversity beyond therapy women's corner it's people And learner, we happen really did so learner do to a platform able physical need -- more do you see if it that And it succeed. about have leadership we been of evolve great change believe partners at university think programs, university to our the

Ryan MacDonald

to of guess edX. the guess, as close I a lot areas I follow-up of about the -- a investment in moving had with talk of it's fruit that excited where few view or the most you the around you've of of to of towards Yes existing which edX, thinking move terms partners excitement university great sort given components as Obviously, of that's sort Thanks. business? you sort my scale you're that of low-hanging transaction. clearly you're a can about from conversations is

Chip Paucek

very of and PhD. is mean new could to because and that low-cost to was you numbers opportunity alignment. the the to solution, I actually such mission to free marketplace. to Well, for easy just say options XU We've large of there organization the deep that do we're mission the reasonably free grow And the complete we're free-to-degree be going about committed build excited

will courses. offer free more We

base to opportunities offer think XX Ryan. -- our built. both XXX. We to and of all access partner programs And people will we for to have competencies from We great go about that the

We anything. to have the XX%. XX% of XX XX% world, the in universities It's top hard to It's of get hard to to vaccination. get XX%

for X.X argue So X,XXX something we've last it's million fastest-growing out And and talking built been very of And for with if do form puzzle -- some about is solution you channel. the got right years XU That's offerings, you've think the brand. in the worldwide I our perfectly now. about us. you're can XXX-plus a enterprise that quietly a is the thing that is one XXXX-plus fitting I the And we clients. global brand, edX XX think activity think engaged you of enterprise doing to part then learning partners, sort piece XU. learners this that of

for adoption marketplace that our mean, we high-quality market excited a we of the what mean bringing leader business I this, can improving So -- component close about this technology learning, a once greater to extraordinarily is today. are and what

Operator

the with from Brent question Thill next And comes Jefferies. of line your

Brent Thill

you? struck that a most highlighted can is strategy. two really we transform? time on that that really you just edX. you lot of one Thanks. Kind kind can there of help maybe What's core all in surprising thing things you for the Chip But see know capabilities or over I think the the of

Chip Paucek

me cut-off, I'm hear you you Yes. if not can still ken. sure,

combination below. I two It's joking incredible. us you day these is edX we it been. has it just sort Jerry together, just say is two entities Brent, does. you is of incredible The opportunity. -- when had of Maguire, the It's a what would been that Every learn So just something the like bring at new of huge me

And was of powering edX we built offering we're with XXX the that very nature would Obviously, that the tell you campus it content. transaction I XXX would and significant most folks were and say when the programs have opportunity combine and terms enterprise the response we dealing just for the for huge people done, at types number that, with it by to enterprise so we where came was the their the intensely prepared for process by all synergy. they a universities had very world worldwide learned it that campus edX were very, is one When programs for we has And are. And one got point are because been surprised who that the The partners. the edX has partner just outcomes example. library combine so time what you of campus how from you using had university edX I of of the incredible. And we for different respond. in edX shocking would we

response this for prepared is the that third would best So We a the ways I surprised we've me been Brent. had this partner three from has say the our -- in standpoint. -- of to some acquisition. And

a the the and there's partners few full we us partners. then with that on there's a There for courses partners their And world's So a opportunity companies combined would and partner the be XU marketplace. do share. quite one those very by to great to community, the great right just final for lot that's the going edX thing best and content. companies demand relationships are has some the of well offer edX edX And of

leading so great from we IBM, And world's economist. recently whether our might seen short some And it with of AWS Google, be the have content the first launched companies. you that course

lot worldwide One maybe grow love a we the so there's suite. final option It's -- we opportunity. think that entire there. we'll would the point And also and be

the XU they better have we than it And when because masters years -- we really programs. people we that over long-form our think think we it history, of do do think long I XU the But and well. of diversified high-quality really of So anybody. do company. And

outside learners more States than today. our come the of from half So United

the learners opportunity edX as And XU traffic and India purely States is just from as untapped that many as the in alone, much for United the has side. they so and do from India

that about excited quite are we So means. what

Brent Thill

flow, cash for you time. the a if just just just could free sounds alleviate should just stop and had know pit but has bit quickly quarters around I you covered line detail. really make a that been row you address it It Thanks short-term a you like I in sure five Great. over a little working the Thank of and quarter. that questions for took this improving some of you. there's -- question mechanics capital there Can that.? itself a couple Paul

Paul Lalljie

drag calendar $X.X Yes. million the partners. And I simply the on timing it's based academic very from the accounts the that mean of directly our is receivable. --

So collect. it's a matter of when we

windfall which if point of of to time get our we in you have current key working is all percent the that next quarter that net the capital will. we'll the in by XX-plus think means AR I

collections It So it's not something from more that is is just systemic. of timing a something perspective. matter of a

Brent Thill

you. Thank Great.

Operator

next line comes the Havemeyer question. your is ahead Fred with open. line Your question Please Fred, Macquarie. with your go from of

Chip Paucek

Maybe move to the one next operator.

Fred Havemeyer

guys Apologies. me? you Can I was hear there. muted

Chip Paucek

Yes we can.

Fred Havemeyer

of hang sometimes Sorry working about having the remotely It's that. still got here.

great ask, is drawing in do to that, see in considering wave resignations credentials anticipate alternative as with learners boot considering of uncertain what This education environment? of in your though a respects. signs So, we courses? workers, any offerings online you here appreciate part time to guys thank of they landscape this new And to do switching are some I'd occurring see some like the you much. it's your be you new But and the roles well who time in very learning certainly offering as an that unique industries that to of

Chip Paucek

rescaling upskilling the I mean, need and for Well, in a everyone huge is world.

five has and university years critical I one been And say, we've with need the out in to you to edX to are XX,XXX with and can't critical else the like, our everyone's job I employers -- look boot is. camps. a incredible best career world's at single we of need. that will a feel and giving training employers people across a one have as access more they line large edX that the this. work excited scale you aggregate very spot. would going the employers no recently way rolled the in our a the aren't solution can number for tech a become pretty EdTech every referrals that partners been this XU company got technology for you network technical really You're at doing like single and more bit particular engagement of up if yourself does certainly in you Great because university people And a to learners the more a fully a high-quality the do a flywheel to going we're diversity it portfolio have in this organizations has retrain improving students and want about and that learners

the think So ultimately terms edX. all Scale credentials story this the alternative of learning of turbocharged ways. curve it the with worldwide of we big of a matters will in us And a gets base. are in and allow bend variety to cost the part back

So a courses there's of bunch coming incredible up.

about of that's out weeks sort that And debut. specialty to shorter just we announcement IE. that that now with yet, had we call an there of incredible are School the that Fred Europe, they in investors heard for on of Economics. course the in will new those only have Economics familiar London impact for the the or that press COVID London which courses rolled release a have did the about are a might make immediately you of we've three School And IE, from signed be We

in world's universities Europe, continuing best just the United school and the the outside some down the best of of States. schools march of top to of path the Spain, in One

important provide we've can last the just their people opportunities six and our a boot short camps announced both bunch for courses Over our improve and to careers do that. really months, to and

Fed Havemeyer

in employing enrollee that. guys here on better a marketing dynamics Okay. noticing. you marketing of that then marketing the digital also been in basis digital -- digital around notably landscape We've noticed spend years. Thanks than really per And the you're on your prior touched that been that for has unit strategy have you Chip the

done And can Could us to where of potentially just then walk what around think to it with like go? edX, introduction you've achieve the that that. So ask improvements? do I'd to What back that you is those is you it?

Paul Lalljie

couple of here. things a So

then Let And XU can probably add that data. me a and think start world-class offline something audiences online apparatus. the ability apparatus Look, marketing off just has is evaluate Chip this. to in has marketing to I

Our cetera. of programs data time. of et developing money, things scientist models those generate better programs, teams a of decide scale to run And algorithms come these passage with to gets have spend those forward across and two I They It's It number some it's for where time. seeing with our have channels, set like same the together years appropriate of we this wine. and fine -- good job done are a call. marketing what the models has as here we we preparing that of short been portfolio marketing department the putting ago, offerings. If for time, were At do benefits courses. broader work we our we of marketing was look XXX us. across and had

in look If Now at camp now having back end in XXX XXX XXX. degree XXX. have used of have have we our And instead we our boot over XXX. business, programs have offerings, of we We business, XXXX. we to

matured an would time scaling has business edX marketing is scale. from a same scale spending an that matter at prudently efficiently. the if of you're generate the to efficient and business address at here with that and operating perspective know I are don't us And department, very We seeing you a what Chip, infrastructure is

Chip Paucek

I think a job. did you great

question Next operator?

Operator

comes Your next of from Baer Josh line the Stanley. Morgan with question

Josh Baer

wanted does quarter XU interesting. planning future partners? question, and for edX choice because more the edX it's very partner-led it's on with more meaning the for to and flexibility exist on Thanks current going kind Great. congrats start motion of you're there market meaning edX and in the how and exists acquisition. I motion Wondering to

Chip Paucek

been Josh, corporate continue response both edX front experience. can obviously variety is to brand us edX The grow consumer ways. put edX entity, you whole expect to a becomes our but in on XU of full has sides our and outstanding. the partner center

that a very an actually you of interesting degree common. And our side. us that example look a came Trilogy partner camp of is In other of at partner that's on as And part words, Miami now is University boot if acquisition. the so to

partner, business, program at short we look course a School the run to they Economics a partner us London you GetSmarter and came now the If have every undergrad as online. across of

love a edX in the of to each of to framework. do front consumer opportunity us. has edX hard we the So in base standpoint, partners set broadly the opportunity the with amounts it's more From large very and traffic. of work overstate a huge learner

marketing. We are excellent at

We at are excellent SEO.

bring they of affordability resources They behind Master's We very programs. and substantially micro non-profit. and for product excellent have are think They large pathways Master's had get about. are admission content and credit both in grow with people number that offerings We a we We greater have Bachelor's micro them. XU into create excited as marketing. a not various will Bachelor's to

credit think we pathways those very attractive. So are

content more into free to a think of this amount for and can already to build of of and the curve. tremendous has has for and affordability degree repository exists space cost various us to build that the do will will be that We course programs. where We those and certificates create built a all let people. today other from XU pathways massive We back repurposed to think will free going university that has themselves. course every paid XU grow content open be us build university it the versions the allows then then pathways core that huge those you're the unlike the online

And make that becomes really And we're pedagogy drive terms XU. are that think edX to excited not with building the trying used note knows But is in worldwide. in in lever You a is nobody brand. improvements over enterprise and open mention that team we will next a -- business. XU is across the for not it's consumer those greater education a open source million name work to XXX brand familiar brand, with me do It's make edX our improvements community a XU finally consumer edX his very the the huge to very then opportunities intend XX substantially global heard to of world We're It both campus for by grow. for learning. years. people edX. it And but bigger and over we we consumer and to important

opportunity quarter. little with not So we I the isn't about are bit what next yes, to fold. the XX on a quarter, current great. you about on expand people personally, trying five and about to the it that anything longer-term next the do XU that's focus to the current adding and thrilled five the layered months I'm don't there's could the years. we've if opportunity edX accelerate impact And existing we to to think the like business think But

of do So And the expression and many every but well the this very presidents way. you community words, know not. XU the way do name know for edX the brand of knows the edX. other with exception will XU name very maybe in the this well to itself universities become In products world XU learners

from teach about table people. to just excited an organic to standpoint what So and more the we're brings that opportunities traffic

Josh Baer

to FY plus just the to looking Great. margin Very EBITDA That or XXXX compared growth clarification. The around better. year? revenue And XXXX FY last for organic was clear. one commentary XXXX compared

Paul Lalljie

you're Yes. to see trend around direction. fluctuations, It that but if XXXX. I to was at line it's commentary know in think generally right you part And you the that heading my spoke of going to the XXXX is look compared what

I here think applies that too.

trailing months of do XX. is that almost you XX rule the If XX

If X that's it's current XX. year the XX plus you look in guidance at it

between in So number there. a pick

how focus we're it's I trying right? continue measure basis, -- on and to think we will that's we're on That's this ballpark that that at zero trying that annual from to that in annual the improve a on look to we're we can seeing that that know business. of how perspective another is strong what marketplace edX a combination one build durable is financial And is of with then of unmatched. positioning the aspect that platform us a aspect results and long-term And sustainable to of company that. makes the you

Chip Paucek

with all as come edX, across we should our of lines. it ability improve product the convert And together to

of for exciting in combination the Rule terms in XX. very will of it what terms the do So,

Operator

question Capital. comes your Knoblauch And the Berenberg from of line last with Brett

Brett Knoblauch

first just Thanks on guys. my Maybe Hi, segment. question. AC for taking the

You improvements the seen segment? in benefits million, are see some segment the a of revenues quarterly start the At would as type approaching to AC haven't same Degree in scale there. of you margin segment $XXX we've guys to what seen expect point

Paul Lalljie

things of couple a are here. there Brett, So

very we've discussing we single manage one think been one I the a on every of of things on the that actively calls business portfolio these basis.

short The extent, allocate the segment And to leverage to Al it where let scale So what degree some through doing Cred And power. Same going time business extent mean drive will business, the XX I We're I as not course the XXX the are XXX. less margins of capital. camp side. through and demonstrate scale seeing things. to building the and having we similar they boot coming right example going of to type this. business capital loud months is now allocate go some we're efficient. out we of margin the is But the at you're same than offerings and have way We're use the believe we today we thing over ago. most time, clear. in courses

boot in revenue investing and side, in to both course can we Al businesses a are sustainable that way. We the camp of Cred continue build in those short so

sure of from favorable the want learners as at type benefit make the benefit want equation. trends. to digital of wanting spend course. marketing have those want We the side just the to to courses. fluctuate a don't going manage and growth. marketing use side And And same from variable we're We we time spending particular we So, you're sometimes on or a margins that get efficient are bottom in most to spend But is, portfolio the line we Al sometimes is wherever to. degree It the we the to something as we either see not Cred going digital side.

Brett Knoblauch

Understood. you. Thank

Chip Paucek

very think Al only obvious edX to but significant And is, will big is note. the Obviously there. would Cred obviously marketing -- the expense It's other impact important have credit Brett we side. a I add on that the do thing

Brett Knoblauch

Yes, side. And comment the on Degree that well. maybe on as then,

flat kind on like As going revenues guidance segment which it your and you never straight of of I to guess compared with sequential guys first growth be year said, together of half, your just at comments fixed are to this now pretty quarter Degree really you been second half back much right implies the the accelerating, looking your put has guys' case. history can continuing as momentum,

that is know So, kind this Just conservative variant you the comp of that about coming really a maybe tough guys being perspective? Delta from just given anything we about? in should extremely

Paul Lalljie

going things. three touch here. I'm of different to couple So, on a areas

the one situation The sure now have just it out. and is pulled in play us. guidance you you to similar right Delta first it, of that's a have top were to where was variant last we're had economy that how on What then open, is going to an we unknown year the we we was not because beginning when variant Delta

our are the us we they revenue to is there. us that? Number key current revenues and going growth sure period gave are sustainable and when someone where the are average the quarter. to sustainable kept at XX% prudence generating if out that What drove the of each perspective. students we the fundamental we're in That's it's we're number from year-over-year that partners, number enrolled look that we things a that we range back guidance one, number number thing? The two, second that enters examine drove one. have. Is that stick the And displayed have guidance of quarter the very things that the we by make need of businesses for a prudent, the courses, When segment, generates keeping things of that We at. that, for X.X those for that the the to on are years time. about around So Degree

create year last you were third make and then look in Degree year, point comps half big ancillary half on COVID-related historical activities, is the are if revenue back make the had point. had a two partners. we second from I'm at a And we where other that in of back year-over-year to of the going last The I'm the the more to Simmons tough point helping of launch of Those picture basis. going segment things is you

back used back within trends large look XU, the we that at programs generally simply year the to fourth of of half calendar the that you for given us quarter a year If year. would be historical launched higher a number half the a half in because back generate revenue of of

or which of or of instead launch of a in more leveling back the half as reduced years, a year last year know have you cadence seen the has half two would historically. up unusually the been slightly flattening that more high Our of the back of you've

those make, positioned. would three points degree is well bottom very but So the line are that is business I the

university partners. great have We

You with strong saw recent to we well the announcement XXXX. even still business as enter that do we're having to And we there. expect demand continue

Operator

management I'll no And there now time. any for are remarks. to at turn further this over closing questions back the call

Chip Paucek

Thank to you talking the look story the to about forward much, We road. you very everyone. out on

Operator

And conference disconnect. you Thank today's this now participating may for concludes call. you and