Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | 2U, Inc. | |
Entity Central Index Key | 1,459,417 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 53,316,098 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 182,110 | $ 223,370 |
Accounts receivable, net | 40,290 | 14,174 |
Prepaid expenses and other assets | 15,075 | 10,509 |
Total current assets | 237,475 | 248,053 |
Property and equipment, net | 50,669 | 49,055 |
Goodwill | 75,296 | 71,988 |
Amortizable intangible assets, net | 114,696 | 90,761 |
Prepaid expenses and other assets, non-current | 25,972 | 22,205 |
Total assets | 504,108 | 482,062 |
Current liabilities | ||
Accounts payable and accrued expenses | 30,955 | 22,629 |
Accrued compensation and related benefits | 13,599 | 19,017 |
Deferred revenue | 21,625 | 7,024 |
Other current liabilities | 15,928 | 9,330 |
Total current liabilities | 82,107 | 58,000 |
Non-current lease-related liabilities | 23,485 | 22,573 |
Deferred government grant obligations | 3,500 | 3,500 |
Deferred tax liabilities, net | 9,113 | 10,087 |
Other non-current liabilities | 70 | 70 |
Total liabilities | 118,275 | 94,230 |
Commitments and contingencies (Note 5) | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued | ||
Common stock, $0.001 par value, 200,000,000 shares authorized, 52,846,016 shares issued and outstanding as of March 31, 2018; 52,505,856 shares issued and outstanding as of December 31, 2017 | 53 | 53 |
Additional paid-in capital | 596,529 | 588,289 |
Accumulated deficit | (220,707) | (205,836) |
Accumulated other comprehensive income | 9,958 | 5,326 |
Total stockholders' equity | 385,833 | 387,832 |
Total liabilities and stockholders' equity | $ 504,108 | $ 482,062 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Condensed Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 52,846,016 | 52,505,856 |
Common stock, shares outstanding | 52,846,016 | 52,505,856 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements of Operations and Comprehensive Loss | ||
Revenue | $ 92,288 | $ 64,829 |
Costs and expenses | ||
Curriculum and teaching | 4,307 | |
Servicing and support | 15,233 | 10,925 |
Technology and content development | 13,840 | 9,205 |
Marketing and sales | 53,058 | 34,670 |
General and administrative | 21,869 | 13,664 |
Total costs and expenses | 108,307 | 68,464 |
Loss from operations | (16,019) | (3,635) |
Interest income | 342 | 196 |
Interest expense | (27) | |
Other income (expense), net | (395) | |
Loss before income taxes | (16,099) | (3,439) |
Income tax benefit | 1,228 | |
Net loss | $ (14,871) | $ (3,439) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.28) | $ (0.07) |
Weighted-average shares of common stock outstanding, basic and diluted (in shares) | 52,687,299 | 47,237,341 |
Other comprehensive loss | ||
Foreign currency translation adjustments, net of tax of $0 for all periods presented | $ 4,632 | |
Comprehensive loss | $ (10,239) | $ (3,439) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Other comprehensive loss | ||
Foreign currency translation adjustments, tax | $ 0 | $ 0 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Changes in Stockholders' Equity - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Balance at Dec. 31, 2017 | $ 53 | $ 588,289 | $ (205,836) | $ 5,326 | $ 387,832 |
Balance (in shares) at Dec. 31, 2017 | 52,505,856 | 52,505,856 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Exercise of stock options | 2,120 | $ 2,120 | |||
Exercise of stock options (in shares) | 186,049 | ||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (1,002) | (1,002) | |||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | 154,111 | ||||
Stock-based compensation expense | 7,122 | 7,122 | |||
Net loss | (14,871) | (14,871) | |||
Foreign currency translation adjustment | 4,632 | 4,632 | |||
Balance at Mar. 31, 2018 | $ 53 | $ 596,529 | $ (220,707) | $ 9,958 | $ 385,833 |
Balance (in shares) at Mar. 31, 2018 | 52,846,016 | 52,846,016 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (14,871) | $ (3,439) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 7,375 | 3,648 |
Stock-based compensation expense | 7,122 | 3,895 |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable, net | (26,109) | (20,812) |
Increase in prepaid expenses and other assets | (4,306) | (545) |
Increase in accounts payable and accrued expenses | 6,010 | 8,911 |
Decrease in accrued compensation and related benefits | (5,437) | (7,668) |
Increase in deferred revenue | 14,484 | 8,582 |
Increase in payments to university clients | (3,826) | (4,514) |
Increase in other liabilities, net | 331 | 343 |
Other | 395 | |
Net cash used in operating activities | (18,832) | (11,599) |
Cash flows from investing activities | ||
Additions of amortizable intangible assets | (21,805) | (4,909) |
Purchases of property and equipment | (1,856) | (9,384) |
Net cash used in investing activities | (23,661) | (14,293) |
Cash flows from financing activities | ||
Proceeds from exercise of stock options | 2,120 | 518 |
Tax withholding payments associated with settlement of restricted stock units | (1,002) | (467) |
Net cash provided by financing activities | 1,118 | 51 |
Effect of exchange rate changes on cash | 115 | |
Net (decrease) in cash and cash equivalents | (41,260) | (25,841) |
Cash and cash equivalents, beginning of period | 223,370 | 168,730 |
Cash and cash equivalents, end of period | $ 182,110 | $ 142,889 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2018 | |
Organization | |
Organization | 1. Organization 2U, Inc. (the “Company”) is a leading education technology company that well-recognized nonprofit colleges and universities trust to bring them into the digital age. The Company’s comprehensive platform of tightly integrated technology and services provides the digital infrastructure universities need to attract, enroll, educate and support students at scale. With the Company’s platform, students can pursue their education anytime, anywhere, without quitting their jobs or moving; and university clients can improve educational outcomes, skills attainment and career prospects for a greater number of students. The Company’s operations consist of two operating segments and two reportable segments: the Graduate Program Segment and the Short Course Segment. The Company’s Graduate Program Segment provides services to well-recognized nonprofit colleges and universities, primarily in the United States, to enable the online delivery of graduate programs. The Company’s Short Course Segment provides premium online short courses to working professionals around the world through relationships with leading universities in the United States, the United Kingdom and South Africa. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information; (ii) the instructions to Form 10-Q; and (iii) the guidance of Rule 10-01 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, for financial statements required to be filed with the Securities and Exchange Commission (“SEC”). They include the assets, liabilities, results of operations and cash flows of the Company, including its wholly owned subsidiaries. As permitted under such rules, certain notes and other financial information normally required by U.S. GAAP have been condensed or omitted. The Company believes the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the three months ended March 31, 2018 and 2017 may not be indicative of the Company’s future results. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. All significant intercompany accounts and transactions have been eliminated in consolidation. The year-end condensed consolidated balance sheet data was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP. Reclassifications The Company has reclassified capitalized technology and content development, as well as other amortizable intangible assets, into amortizable intangible assets, net on the condensed consolidated statements of cash flows for the three months ended March 31, 2017. In addition, certain other prior period amounts on the condensed consolidated statements of cash flows have been reclassified to conform to the current period’s presentation. These reclassifications had no impact on cash flows from operating, investing or financing activities previously reported for any periods presented. Use of Estimates The preparation of the condensed consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported herein. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. The Company evaluates its estimates and assumptions on an ongoing basis. Revenue Recognition, Accounts Receivable and Allowance for Doubtful Accounts On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) and the related amendments using the modified retrospective transition method and has concluded that doing so did not have a material impact on the amount and timing of either its revenue or costs. As part of its assessment, the Company completed reviews of its contracts and evaluated its costs, including costs of obtaining contracts with its university clients and costs associated with content development. Certain of these contract and content costs will be capitalized under the new standard. The adoption of ASU 2014-09 did not have a material impact as of January 1, 2018, and no cumulative adjustment was recorded. Further, the amounts reported as of March 31, 2018 on the accompanying condensed consolidated balance sheet and the results of operations for the three months ended March 31, 2018 reported on the accompanying condensed consolidated statement of operations and comprehensive loss would not have been materially different than under legacy U.S. GAAP (i.e., Topic 605). The Company generates substantially all of its revenue from contractual arrangements with either its university clients or students to provide a comprehensive platform of tightly integrated technology and technology enabled services related to graduate programs and short courses. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Graduate Program Segment derives revenue primarily from contractually specified percentages of the amounts the Company’s university clients receive from their students in 2U-enabled graduate programs for tuition and fees, less credit card fees and other specified charges the Company has agreed to exclude in certain university client contracts. The Company’s contracts with university clients in this segment have 10 to 15 year initial terms and have a single performance obligation, as the promises to provide a platform of tightly integrated technology and services university clients need to attract, enroll, educate and support students are not distinct within the context of the contracts. The single performance obligation is delivered as the university clients receive and consume benefits, which occurs ratably over a series of academic terms. The fees received from university clients over the term of the arrangement are variable in nature in that they are dependent upon the number of students that are enrolled in the program within each academic term. The fees are allocated to and are recognized ratably over the related academic term, defined as the period beginning on the first day of classes through the last. A refund allowance is established for the Company’s share of tuition and fees ultimately uncollected by university clients. The Short Course Segment derives revenue directly from contracts with students for the tuition and fees paid to enroll in and progress through the Company’s short courses which run between six and 16 weeks. The Company’s contracts with students in this segment have multiple performance obligations as the delivery of the short course and student support services are each considered distinct performance obligations. These performance obligations are each satisfied ratably over the same short course presentation period, which is defined as the period beginning on the first day of the course through the last. The Company recognizes the gross proceeds received from the students and shares contractually specified percentages with its university clients, for providing short course content and certification, in the form of a royalty recognized as curriculum and teaching costs on the Company’s condensed consolidated statements of operations and comprehensive loss. The Company’s contracts with university clients in this segment are typically shorter and less restrictive than the Company’s contracts with university clients in the Graduate Program Segment. The Company does not disclose the value of unsatisfied performance obligations for the Graduate Program Segment because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation. The Company does not disclose the value of unsatisfied performance obligations for the Short Course Segment because the performance obligation is part of a contract that has an original duration of less than one year. Contract Acquisition Costs The Company incurs certain acquisition costs related to obtaining its contracts in the Graduate Program Segment. These costs are capitalized and recorded on a contract-by-contract basis and amortized using the straight-line method over the length of the contract. With respect to contract acquisition costs in the Short Course Segment, the Company has elected a practical expedient to expense these costs as incurred, as the terms of contracts with students in this segment are less than one year. Payments to University Clients The Company is contractually obligated to make payments to certain of its university clients in exchange for contract extensions and various marketing and other rights. Generally, these amounts are capitalized and amortized as contra revenue over the life of the contract, commencing on the later of when payment is due or when contract revenue recognition begins. Accounts Receivable, Contract Assets and Liabilities Balance sheet items related to contracts consist of accounts receivable, net and deferred revenue on the Company’s condensed consolidated balance sheets. The Company’s accounts receivable, net also includes unbilled revenue. Accounts receivable, net is stated at net realizable value, and the Company utilizes the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of the amounts due. The Company’s estimates are reviewed and revised periodically based on historical collection experience and a review of the current status of accounts receivable, net. Historically, actual write-offs for uncollectible accounts have not significantly differed from prior estimates. The Company recognizes unbilled revenue when revenue recognition occurs in advance of billings. Unbilled revenue is recognized in the Graduate Program Segment because billings to university clients do not occur until after the academic term has commenced and final enrollment information is available. Deferred revenue as of each balance sheet date represents the excess of amounts billed or received as compared to amounts recognized in revenue on the condensed consolidated statements of operations and comprehensive loss as of the end of the reporting period, and such amounts are reflected as a current liability on the Company’s condensed consolidated balance sheets. The Company generally receives payments for its share of tuition and fees from graduate program university clients early in each academic term and from short course students, either in full upon registration for the course or in full before the end of the course based on a payment plan, prior to completion of the service period. These payments are recorded as deferred revenue until the services are delivered or until the Company’s obligations are otherwise met, at which time revenue is recognized. Capitalized Content Development The Company develops content for each offering on a course-by-course basis in conjunction with the faculty for each graduate program and short course. University clients and their faculty generally provide materials used for the course in an on-campus setting, including curricula, case studies and other reading materials, and presentations. The Company is responsible for the conversion of the materials into a format suitable for delivery through its online learning platform, including all expenses associated with this effort. With regard to the Graduate Program Segment, the development of content is part of the Company’s single performance obligation and is considered a contract fulfillment cost. The content development costs that qualify for capitalization are third-party direct costs, such as videography, editing and other services associated with creating digital content. Additionally, we capitalize internal payroll and payroll-related costs incurred to create and produce videos and other digital content utilized in the university clients’ programs for delivery via the Company’s online learning platform. Capitalization ends when content has been fully developed by both the Company and the university client, at which time amortization of the capitalized content development costs begin. The capitalized costs for each offering are recorded on a course-by-course basis and included in capitalized content costs in amortizable intangible assets, net on the Company’s condensed consolidated balance sheets. These costs are amortized using the straight-line method over the estimated useful life of the respective course, which is generally five years. The estimated useful life corresponds with the planned curriculum refresh rate. This refresh rate is consistent with expected curriculum refresh rates as cited by program faculty members for similar on-campus programs. It is reasonably possible that developed content could be refreshed before the estimated useful lives are complete or be expensed immediately in the event that the development of a course is discontinued prior to launch. Marketing and Sales Costs The majority of the marketing and sales costs incurred by the Company are directly related to acquiring students for its university clients’ graduate programs, with lesser amounts related to the Company’s own marketing and advertising efforts. For the three months ended March 31, 2018, costs related to the Company’s own marketing and advertising efforts were not material. All such costs are expensed as incurred and reported in marketing and sales expense on the Company’s condensed consolidated statements of operations and comprehensive loss. As of March 31, 2018 and December 31, 2017, the Company had $11.3 million and $11.7 million, respectively, of accrued marketing costs included in accounts payable and accrued expenses on the Company’s condensed consolidated balance sheets. Non-Cash Long-Lived Asset Additions During the three months ended March 31, 2018, the Company had capital asset additions of $31.0 million in property and equipment and capitalized technology and content development, of which $7.4 million consisted of non-cash capital expenditures, primarily related to the acquisition of certain long-lived assets for which we have an accrued liability. During the three months ended March 31, 2017, the Company had capital asset additions of $20.0 million, which were comprised of $11.1 million of leasehold improvements, $4.8 million in capitalized technology and content development costs and $4.1 million of other property and equipment. The $20.0 million increase primarily consisted of $14.3 million in cash capital expenditures and $5.4 million in landlord funded leasehold improvements. Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates step two from the goodwill impairment test and requires an entity to recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value, up to the amount of goodwill allocated to that reporting unit. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact that this standard will have on its consolidated financial position or related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice surrounding how certain transactions are classified in the statement of cash flows. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2017. The Company adopted this ASU on January 1, 2018. Adoption of this standard did not have a material impact on the Company’s condensed consolidated statements of cash flows or related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The ASU introduces a model for lessees requiring most leases to be reported on the balance sheet. Lessor accounting remains substantially similar to current U.S. GAAP. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018. The Company is currently evaluating the effect that this ASU will have on its consolidated financial position and related disclosures, and believes that this standard may materially increase its other non-current assets and non-current liabilities on the consolidated balance sheets in order to record right-of-use assets and related liabilities for its existing operating leases. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2018 | |
Business Combination | |
Business Combination | 3. Business Combination On July 1, 2017, the Company, through a wholly owned subsidiary (“2U South Africa”), completed its acquisition of all of the outstanding equity interests of GetSmarter pursuant to a Share Sale Agreement, dated as of May 1, 2017 (the “Share Sale Agreement”), as amended by an addendum, dated as of June 29, 2017, for a net purchase price of $98.7 million in cash. In addition, 2U South Africa agreed to pay a potential earn out payment of up to $20.0 million, subject to the achievement of certain financial milestones in calendar years 2017 and 2018. The valuation of the assets acquired and liabilities assumed (i.e., purchase price allocation) was completed as of December 31, 2017. As of March 31, 2018, there has been no material change in the expected earnout payment from the final valuation of the purchase price allocation since December 31, 2017. The unaudited pro forma combined financial information below is presented for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combination occurred as of the dates indicated or what the results would be for any future periods. The following table presents the Company’s unaudited pro forma combined revenue and pro forma combined net loss, for the three months ended March 31, 2017 as if the acquisition of GetSmarter had occurred on January 1, 2017: Three Months Ended (in thousands, except per share Pro forma revenue $ Pro forma net loss ) Pro forma net loss per share, basic and diluted $ ) |
Goodwill and Amortizable Intang
Goodwill and Amortizable Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Amortizable Intangible Assets | |
Goodwill and Amortizable Intangible Assets | 4. Goodwill and Amortizable Intangible Assets The table below summarizes the changes in the carrying amount of goodwill by reportable segment: Graduate Short Course Total (in thousands) Balance as of December 31, 2017 $ — $ $ Foreign currency translation adjustments — Balance as of March 31, 2018 $ — $ $ Amortizable intangible assets consisted of the following as of: March 31, 2018 December 31, 2017 Estimated Gross Accumulated Net Gross Accumulated Net (in thousands) Capitalized technology 3 $ $ ) $ $ $ ) $ Capitalized content development 4 ) ) University client relationships 9 ) ) Trade names and domain names 10 ) ) Total amortizable intangible assets, net $ $ ) $ $ $ ) $ Included in the amounts presented above are $29.5 million and $15.6 million of in process capitalized technology and content development as of March 31, 2018 and December 31, 2017, respectively. In the first quarter of 2018, the Company entered into an agreement with WeWork Companies, Inc. (“WeWork”) and Flatiron School, Inc., a wholly owned subsidiary of WeWork, to purchase a perpetual source code license for the Learn.co platform and certain integration software development services for $14.5 million. As of March 31, 2018, the Company has recorded capitalized technology of $13.2 million related to this agreement in amortizable intangible assets, net on the Company’s condensed consolidated balance sheets, of which $4.2 million has been accrued as a current liability. The remaining $1.3 million is payable under the agreement upon the achievement of certain milestones related to the software development services. In addition, the Company entered into a multi-year agreement to purchase Global Access Memberships to WeWork spaces around the world that will be provided to students in 2U-powered online graduate programs, an agreement to offer $5 million in scholarships to certain WeWork community members and employees for the Company’s graduate programs and short courses. In addition, WeWork and the Company plan to co-create a Future of Learning and Work space. Also in the first quarter of 2018, the Company purchased an active website and 11 additional domains for $5.7 million to support the marketing efforts of certain graduate programs. As of March 31, 2018, these acquired assets are included in trade names and domain names in amortizable intangible assets, net, on the Company’s condensed consolidated balance sheets. The Company recorded amortization expense related to amortizable intangible assets of $5.1 million and $2.4 million for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, the estimated future amortization expense for amortizable intangible assets placed in service is as follows (in thousands): Remainder of 2018 $ 2019 2020 2021 2022 Thereafter Total $ |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 5. Commitments and Contingencies Legal Contingencies From time to time, the Company may become involved in legal proceedings or other contingencies in the ordinary course of its business. The Company is not presently involved in any legal proceeding or other contingency that, if determined adversely to it, would individually or in the aggregate have a material adverse effect on its business, operating results, financial condition or cash flows. Accordingly, the Company does not believe that there is a reasonable possibility that a material loss exceeding amounts already recognized may have been incurred as of the date of the balance sheets presented herein. Marketing and Sales Commitments Certain of the agreements entered into between the Company and its university clients require the Company to commit to meet certain staffing and spending investment thresholds related to marketing and sales activities. In addition, certain of the agreements require the Company to invest up to agreed upon levels in marketing the programs to achieve specified program performance. The Company believes it is currently in compliance with all such commitments. Future Minimum Payments to University Clients The Company is contractually obligated to make payments to certain of its university clients in exchange for contract extensions and various marketing and other rights. As of March 31, 2018, the future minimum payments due to university clients has not materially changed relative to the amounts provided in the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Contingent Payments to University Clients Under certain of the Company’s contracts in the Graduate Program Segment, the Company would be obligated to make future minimum program payments to a university client in the event that certain program metrics, partially associated with programs not yet launched, are not achieved. Due to the dependency of these calculations on future program launches, the amounts of any associated contingent payments cannot be reasonably estimated at this time. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt | |
Debt | 6. Debt Lines of Credit In the first quarter of 2018, the Company amended its $25.0 million revolving line of credit agreement to extend the maturity date through May 31, 2018. No amounts were outstanding under this credit agreement as of March 31, 2018 or December 31, 2017. The Company intends to extend this agreement under comparable terms, prior to expiration. Certain of the Company’s operating lease agreements entered into prior to March 31, 2018 require security deposits in the form of cash or an unconditional, irrevocable letter of credit. As of March 31, 2018, the Company has entered into standby letters of credit totaling $15.0 million as security deposits for the applicable leased facilities and in connection with government grants. These letters of credit reduced the aggregate amount the Company may borrow under its revolving line of credit to $10.0 million. The Company’s $1.9 million revolving debt facilities related to the Short Course Segment expired and were not renewed as of March 31, 2018. Government Grants The Company has two outstanding conditional loan agreements with Prince George’s County, Maryland and the State of Maryland, respectively, for an aggregate amount of $3.5 million, each bearing an interest rate of 3% per annum. These agreements are conditional loan obligations that may be forgiven provided that we attain certain conditions related to employment levels at our Lanham, Maryland headquarters. The loan with the State of Maryland has a maturity date of December 31, 2026, and the loan with Prince George’s County, Maryland has a maturity date of June 22, 2027. The interest expense related to these loans for the three months ended March 31, 2018 is immaterial. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes | |
Income Taxes | 7. Income Taxes The Company’s income tax provisions for all periods consist of federal, state and foreign income taxes. The tax provisions for the three months ended March 31, 2018 and 2017 were based on estimated full-year effective tax rates, including the mix of income for the period between higher-taxed and lower-taxed jurisdictions, after giving effect to significant items related specifically to the interim periods, and loss-making entities for which it is not more likely than not that a tax benefit will be realized. The Company’s effective tax rate was approximately 8% and 0% for the three months ended March 31, 2018 and 2017, respectively. The Company’s tax benefit of $1.2 million for the three months ended March 31, 2018 primarily relates to the amortization of acquired intangible assets and losses generated in the Short Course Segment. The Company expects to continue to recognize a tax benefit in the future for the Short Course Segment to the extent that (i) the segment continues to generate pre-tax losses and (ii) the Short Course Segment’s deferred tax liabilities are in excess of deferred tax assets. To date, the Company has not been required to pay U.S. federal income taxes because of its current and accumulated net operating losses. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act of 2017 (“Tax Act”). As of March 31, 2018, the Company is still evaluating certain components of the Tax Act; however, it has finalized its determination that no transitional tax is required. As the Company collects and compares necessary data and interprets the Tax Act and any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service, and other standard-setting bodies, the Company may make adjustments to the provisional amounts recorded. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders’ Equity As of March 31, 2018, the Company was authorized to issue 205,000,000 total shares of capital stock, consisting of 200,000,000 shares of common stock and 5,000,000 shares of preferred stock. As of March 31, 2018, the Company had reserved a total of 13,673,324 of its authorized shares of common stock for future issuance as follows: Outstanding stock options Possible future issuance under 2014 Equity Incentive Plan Outstanding restricted stock units Available for future issuance under employee stock purchase plan Total shares of common stock reserved for future issuance The shares available for future issuance increased by 2,625,292 and 2,357,579 on January 1, 2018 and 2017, respectively, pursuant to the automatic share reserve increase provision under the 2014 Equity Incentive Plan (the “2014 Plan”). |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation | |
Stock-Based Compensation | 9. Stock-Based Compensation The Company provides equity-based compensation awards to employees, independent contractors and directors as an effective means for attracting, retaining and motivating such individuals. The Company maintains two share-based compensation plans: the 2014 Equity Incentive Plan and the 2008 Stock Incentive Plan (the “2008 Plan”). Upon the effective date of the 2014 Plan in January 2014, the Company ceased using the 2008 Plan to grant new equity awards and began using the 2014 Plan for grants of new equity awards. Employee Stock Purchase Plan The Company’s 2017 Employee Stock Purchase Plan (the “ESPP”) provides (i) for two offering periods each year and (ii) that the purchase price for shares of the Company’s common stock purchased under the ESPP will be 90% of the lesser of the fair market value of 2U’s common stock on the purchase date or the fair market value of 2U’s common stock on the first day of the offering period. Eligible employees will be able to select a rate of payroll deduction between 1% and 15% of their salary or wage compensation received from the Company as in effect at the start of the offering period, subject to a maximum payroll deduction per calendar year of $25,000. The first offering period began on January 1, 2018. Stock-Based Compensation Expense Stock-based compensation expense related to stock-based awards is included in the following line items in the accompanying condensed consolidated statements of operations and comprehensive loss: Three Months Ended 2018 2017 (in thousands) Curriculum and teaching $ $ — Servicing and support Technology and content development Program marketing and sales General and administrative Total stock-based compensation expense $ $ Stock Options The following is a summary of the stock option activity for the three months ended March 31, 2018: Number of Weighted-Average Outstanding balance at December 31, 2017 $ Granted Exercised ) Forfeited ) Expired — — Outstanding balance at March 31, 2018 Exercisable at March 31, 2018* * As of March 31, 2018, the aggregate intrinsic value of options exercisable was $244.3 million and such shares had a weighted-average remaining contractual term of 4.71 years. Restricted Stock Units The following is a summary of restricted stock unit activity for the three months ended March 31, 2018: Number of Weighted- Outstanding balance at December 31, 2017 $ Granted Vested ) Forfeited ) Outstanding balance at March 31, 2018 |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2018 | |
Net Loss per Share | |
Net Loss per Share | 10. Net Loss per Share Diluted net loss per share is the same as basic net loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive, given the Company’s net loss. The following securities have been excluded from the calculation of weighted-average shares of common stock outstanding because the effect is anti-dilutive for the three months ended March 31, 2018 and 2017: Three Months Ended 2018 2017 Stock options Restricted stock units Basic and diluted net loss per share is calculated as follows: Three Months Ended 2018 2017 Numerator (in thousands): Net loss $ ) $ ) Denominator: Weighted-average shares of common stock outstanding, basic and diluted Net loss per share, basic and diluted $ ) $ ) |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment and Geographic Information | |
Segment and Geographic Information | 11. Segment and Geographic Information The Company’s operations consist of two operating segments and two reportable segments: the Graduate Program Segment and the Short Course Segment. The Company’s Graduate Program Segment provides services to well-recognized nonprofit colleges and universities, primarily in the United States, to enable the online delivery of graduate programs. The Company’s Short Course Segment provides premium online short courses to working professionals around the world through relationships with leading universities in the United States, the United Kingdom and South Africa. During the three months ended March 31, 2018, three university clients in the Graduate Program Segment each accounted for 10% or more of the Company’s consolidated revenue, as follows: $20.7 million, $13.5 million and $9.6 million, which equals 22%, 15% and 10% of the Company’s consolidated revenue, respectively. During the three months ended March 31, 2017, four university clients in the Graduate Program Segment each accounted for 10% or more of the Company’s consolidated revenue, as follows: $19.7 million, $11.7 million, $6.8 million and $6.5 million, which equals 30%, 18%, 11% and 10% of the Company’s consolidated revenue, respectively. As of March 31, 2018, one university client in the Graduate Program Segment accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, as follows: $20.6 million, which equals 51% of the Company’s consolidated accounts receivable, net balance. As of December 31, 2017, two university clients in the Graduate Program Segment each accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, as follows: $9.4 million and $2.0 million, which equals 67% and 14% of the Company’s consolidated accounts receivable, net balance, respectively. For the Company’s Short Course Segment, revenue and accounts receivable are derived from individual students or third parties paying on their behalf, rather than directly from university clients. For the three months ended March 31, 2018, revenue associated with the short courses offered with the Company’s three largest university clients in this segment accounted for approximately 83% of the segment’s revenue and approximately 11% of the Company’s consolidated revenue on a combined basis. In this segment, no individual university client had revenue associated with it that accounted for 10% or more of the Company’s consolidated revenue for the three months ended March 31, 2018. As of March 31, 2018 and December 31, 2017, none of the receivable, net balances in this segment accounted for more than 10% of the Company’s consolidated accounts receivable, net balance. Segment Performance The following table summarizes financial information regarding each reportable segment’s results of operations for the periods presented: Three Months Ended 2018 2017 (dollars in thousands) Revenue by segment* Graduate Program Segment $ $ Short Course Segment** — Total revenue $ $ Segment profitability** Graduate Program Segment $ ) $ Short Course Segment ) — Total segment profitability $ ) $ Segment profitability margin*** Graduate Program Segment )% % Short Course Segment ) — Total segment profitability margin )% % * The Company did not have any material intersegment revenues for any periods presented. ** The Company evaluates segment profitability as net income or net loss, as applicable, before net interest income (expense), taxes, depreciation and amortization, foreign currency gains or losses, acquisition-related gains or losses and stock-based compensation expense. Some or all of these items may not be applicable in any given reporting period. *** The Company defines segment profitability margin as segment profitability as a percentage of consolidated revenue. The following table reconciles net loss to total segment profitability: Three Months Ended 2018 2017 (in thousands) Net loss $ ) $ ) Adjustments: Interest income ) ) Interest expense — Foreign currency loss — Depreciation and amortization expense Income tax benefit ) — Stock-based compensation expense Total adjustments Total segment profitability $ ) $ The Company’s total assets by segment are as follows: March 31, December 31, (in thousands) Total assets Graduate Program Segment $ $ Short Course Segment Total assets $ $ Contract Assets and Liabilities The Company’s contract assets and liabilities in each segment are as follows: March 31, December 31, (in thousands) Contract assets Graduate Program Segment accounts receivable, net $ $ Graduate Program Segment unbilled revenue Short Course Segment accounts receivable, net Total contract assets $ $ Contract liabilities Graduate Program Segment deferred revenue $ $ Short Course Segment deferred revenue Total contract liabilities $ $ Revenue recognized during the three months ended March 31, 2018 that was included in the deferred revenue balance at the beginning of the year was $2.5 million and $4.5 million related to the Graduate Program Segment and Short Course Segment, respectively. Contract Acquisition Costs The Graduate Program Segment had $0.1 million of net capitalized contract acquisition costs as of March 31, 2018. For the three months ended March 31, 2018, the Graduate Program Segment capitalized $0.1 million and recorded no amortization expense. Geographical Information The Company’s non-U.S. revenue for the three months ended March 31, 2018, determined based upon the university client’s functional currency, was $7.4 million, entirely from the Short Course Segment’s operations outside of the U.S. The Company did not have non-U.S. revenue for the three months ended March 31, 2017. The Company’s long-lived assets in non-U.S. countries as of March 31, 2018 and December 31, 2017 totaled approximately $0.9 million and $0.7 million, respectively. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information; (ii) the instructions to Form 10-Q; and (iii) the guidance of Rule 10-01 of Regulation S-X under the Securities and Exchange Act of 1934, as amended, for financial statements required to be filed with the Securities and Exchange Commission (“SEC”). They include the assets, liabilities, results of operations and cash flows of the Company, including its wholly owned subsidiaries. As permitted under such rules, certain notes and other financial information normally required by U.S. GAAP have been condensed or omitted. The Company believes the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows as of and for the periods presented herein. The Company’s results of operations for the three months ended March 31, 2018 and 2017 may not be indicative of the Company’s future results. These condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. All significant intercompany accounts and transactions have been eliminated in consolidation. The year-end condensed consolidated balance sheet data was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP. |
Reclassifications | Reclassifications The Company has reclassified capitalized technology and content development, as well as other amortizable intangible assets, into amortizable intangible assets, net on the condensed consolidated statements of cash flows for the three months ended March 31, 2017. In addition, certain other prior period amounts on the condensed consolidated statements of cash flows have been reclassified to conform to the current period’s presentation. These reclassifications had no impact on cash flows from operating, investing or financing activities previously reported for any periods presented. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported herein. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. The Company evaluates its estimates and assumptions on an ongoing basis. |
Revenue Recognition, Accounts Receivable and Allowance for Doubtful Accounts | Revenue Recognition, Accounts Receivable and Allowance for Doubtful Accounts On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) and the related amendments using the modified retrospective transition method and has concluded that doing so did not have a material impact on the amount and timing of either its revenue or costs. As part of its assessment, the Company completed reviews of its contracts and evaluated its costs, including costs of obtaining contracts with its university clients and costs associated with content development. Certain of these contract and content costs will be capitalized under the new standard. The adoption of ASU 2014-09 did not have a material impact as of January 1, 2018, and no cumulative adjustment was recorded. Further, the amounts reported as of March 31, 2018 on the accompanying condensed consolidated balance sheet and the results of operations for the three months ended March 31, 2018 reported on the accompanying condensed consolidated statement of operations and comprehensive loss would not have been materially different than under legacy U.S. GAAP (i.e., Topic 605). The Company generates substantially all of its revenue from contractual arrangements with either its university clients or students to provide a comprehensive platform of tightly integrated technology and technology enabled services related to graduate programs and short courses. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Graduate Program Segment derives revenue primarily from contractually specified percentages of the amounts the Company’s university clients receive from their students in 2U-enabled graduate programs for tuition and fees, less credit card fees and other specified charges the Company has agreed to exclude in certain university client contracts. The Company’s contracts with university clients in this segment have 10 to 15 year initial terms and have a single performance obligation, as the promises to provide a platform of tightly integrated technology and services university clients need to attract, enroll, educate and support students are not distinct within the context of the contracts. The single performance obligation is delivered as the university clients receive and consume benefits, which occurs ratably over a series of academic terms. The fees received from university clients over the term of the arrangement are variable in nature in that they are dependent upon the number of students that are enrolled in the program within each academic term. The fees are allocated to and are recognized ratably over the related academic term, defined as the period beginning on the first day of classes through the last. A refund allowance is established for the Company’s share of tuition and fees ultimately uncollected by university clients. The Short Course Segment derives revenue directly from contracts with students for the tuition and fees paid to enroll in and progress through the Company’s short courses which run between six and 16 weeks. The Company’s contracts with students in this segment have multiple performance obligations as the delivery of the short course and student support services are each considered distinct performance obligations. These performance obligations are each satisfied ratably over the same short course presentation period, which is defined as the period beginning on the first day of the course through the last. The Company recognizes the gross proceeds received from the students and shares contractually specified percentages with its university clients, for providing short course content and certification, in the form of a royalty recognized as curriculum and teaching costs on the Company’s condensed consolidated statements of operations and comprehensive loss. The Company’s contracts with university clients in this segment are typically shorter and less restrictive than the Company’s contracts with university clients in the Graduate Program Segment. The Company does not disclose the value of unsatisfied performance obligations for the Graduate Program Segment because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation. The Company does not disclose the value of unsatisfied performance obligations for the Short Course Segment because the performance obligation is part of a contract that has an original duration of less than one year. Contract Acquisition Costs The Company incurs certain acquisition costs related to obtaining its contracts in the Graduate Program Segment. These costs are capitalized and recorded on a contract-by-contract basis and amortized using the straight-line method over the length of the contract. With respect to contract acquisition costs in the Short Course Segment, the Company has elected a practical expedient to expense these costs as incurred, as the terms of contracts with students in this segment are less than one year. Payments to University Clients The Company is contractually obligated to make payments to certain of its university clients in exchange for contract extensions and various marketing and other rights. Generally, these amounts are capitalized and amortized as contra revenue over the life of the contract, commencing on the later of when payment is due or when contract revenue recognition begins. Accounts Receivable, Contract Assets and Liabilities Balance sheet items related to contracts consist of accounts receivable, net and deferred revenue on the Company’s condensed consolidated balance sheets. The Company’s accounts receivable, net also includes unbilled revenue. Accounts receivable, net is stated at net realizable value, and the Company utilizes the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of the amounts due. The Company’s estimates are reviewed and revised periodically based on historical collection experience and a review of the current status of accounts receivable, net. Historically, actual write-offs for uncollectible accounts have not significantly differed from prior estimates. The Company recognizes unbilled revenue when revenue recognition occurs in advance of billings. Unbilled revenue is recognized in the Graduate Program Segment because billings to university clients do not occur until after the academic term has commenced and final enrollment information is available. Deferred revenue as of each balance sheet date represents the excess of amounts billed or received as compared to amounts recognized in revenue on the condensed consolidated statements of operations and comprehensive loss as of the end of the reporting period, and such amounts are reflected as a current liability on the Company’s condensed consolidated balance sheets. The Company generally receives payments for its share of tuition and fees from graduate program university clients early in each academic term and from short course students, either in full upon registration for the course or in full before the end of the course based on a payment plan, prior to completion of the service period. These payments are recorded as deferred revenue until the services are delivered or until the Company’s obligations are otherwise met, at which time revenue is recognized. |
Capitalized Content Development | Capitalized Content Development The Company develops content for each offering on a course-by-course basis in conjunction with the faculty for each graduate program and short course. University clients and their faculty generally provide materials used for the course in an on-campus setting, including curricula, case studies and other reading materials, and presentations. The Company is responsible for the conversion of the materials into a format suitable for delivery through its online learning platform, including all expenses associated with this effort. With regard to the Graduate Program Segment, the development of content is part of the Company’s single performance obligation and is considered a contract fulfillment cost. The content development costs that qualify for capitalization are third-party direct costs, such as videography, editing and other services associated with creating digital content. Additionally, we capitalize internal payroll and payroll-related costs incurred to create and produce videos and other digital content utilized in the university clients’ programs for delivery via the Company’s online learning platform. Capitalization ends when content has been fully developed by both the Company and the university client, at which time amortization of the capitalized content development costs begin. The capitalized costs for each offering are recorded on a course-by-course basis and included in capitalized content costs in amortizable intangible assets, net on the Company’s condensed consolidated balance sheets. These costs are amortized using the straight-line method over the estimated useful life of the respective course, which is generally five years. The estimated useful life corresponds with the planned curriculum refresh rate. This refresh rate is consistent with expected curriculum refresh rates as cited by program faculty members for similar on-campus programs. It is reasonably possible that developed content could be refreshed before the estimated useful lives are complete or be expensed immediately in the event that the development of a course is discontinued prior to launch. |
Marketing and Sales Costs | Marketing and Sales Costs The majority of the marketing and sales costs incurred by the Company are directly related to acquiring students for its university clients’ graduate programs, with lesser amounts related to the Company’s own marketing and advertising efforts. For the three months ended March 31, 2018, costs related to the Company’s own marketing and advertising efforts were not material. All such costs are expensed as incurred and reported in marketing and sales expense on the Company’s condensed consolidated statements of operations and comprehensive loss. As of March 31, 2018 and December 31, 2017, the Company had $11.3 million and $11.7 million, respectively, of accrued marketing costs included in accounts payable and accrued expenses on the Company’s condensed consolidated balance sheets. |
Non-Cash Long-Lived Asset Additions | Non-Cash Long-Lived Asset Additions During the three months ended March 31, 2018, the Company had capital asset additions of $31.0 million in property and equipment and capitalized technology and content development, of which $7.4 million consisted of non-cash capital expenditures, primarily related to the acquisition of certain long-lived assets for which we have an accrued liability. During the three months ended March 31, 2017, the Company had capital asset additions of $20.0 million, which were comprised of $11.1 million of leasehold improvements, $4.8 million in capitalized technology and content development costs and $4.1 million of other property and equipment. The $20.0 million increase primarily consisted of $14.3 million in cash capital expenditures and $5.4 million in landlord funded leasehold improvements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates step two from the goodwill impairment test and requires an entity to recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value, up to the amount of goodwill allocated to that reporting unit. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact that this standard will have on its consolidated financial position or related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice surrounding how certain transactions are classified in the statement of cash flows. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2017. The Company adopted this ASU on January 1, 2018. Adoption of this standard did not have a material impact on the Company’s condensed consolidated statements of cash flows or related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The ASU introduces a model for lessees requiring most leases to be reported on the balance sheet. Lessor accounting remains substantially similar to current U.S. GAAP. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018. The Company is currently evaluating the effect that this ASU will have on its consolidated financial position and related disclosures, and believes that this standard may materially increase its other non-current assets and non-current liabilities on the consolidated balance sheets in order to record right-of-use assets and related liabilities for its existing operating leases. |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combination | |
Schedule of unaudited pro forma combined revenue and net loss | Three Months Ended (in thousands, except per share Pro forma revenue $ Pro forma net loss ) Pro forma net loss per share, basic and diluted $ ) |
Amortizable Intangible Assets (
Amortizable Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Amortizable Intangible Assets | |
Schedule of Changes in goodwill | Graduate Short Course Total (in thousands) Balance as of December 31, 2017 $ — $ $ Foreign currency translation adjustments — Balance as of March 31, 2018 $ — $ $ |
Schedule of amortizable intangible assets | March 31, 2018 December 31, 2017 Estimated Gross Accumulated Net Gross Accumulated Net (in thousands) Capitalized technology 3 $ $ ) $ $ $ ) $ Capitalized content development 4 ) ) University client relationships 9 ) ) Trade names and domain names 10 ) ) Total amortizable intangible assets, net $ $ ) $ $ $ ) $ |
Schedule of estimated future amortization expense for amortizable intangible assets | As of March 31, 2018, the estimated future amortization expense for amortizable intangible assets placed in service is as follows (in thousands): Remainder of 2018 $ 2019 2020 2021 2022 Thereafter Total $ |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity | |
Schedule of shares of common stock reserved for future issuance | As of March 31, 2018, the Company had reserved a total of 13,673,324 of its authorized shares of common stock for future issuance as follows: Outstanding stock options Possible future issuance under 2014 Equity Incentive Plan Outstanding restricted stock units Available for future issuance under employee stock purchase plan Total shares of common stock reserved for future issuance |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation | |
Schedule of stock-based compensation expense included in the consolidated statements of operations and comprehensive loss | Three Months Ended 2018 2017 (in thousands) Curriculum and teaching $ $ — Servicing and support Technology and content development Program marketing and sales General and administrative Total stock-based compensation expense $ $ |
Summary of stock option activity | Number of Weighted-Average Outstanding balance at December 31, 2017 $ Granted Exercised ) Forfeited ) Expired — — Outstanding balance at March 31, 2018 Exercisable at March 31, 2018* * As of March 31, 2018, the aggregate intrinsic value of options exercisable was $244.3 million and such shares had a weighted-average remaining contractual term of 4.71 years. |
Restricted Stock Units | |
Stock-Based Compensation | |
Summary of restricted stock unit activity | Number of Weighted- Outstanding balance at December 31, 2017 $ Granted Vested ) Forfeited ) Outstanding balance at March 31, 2018 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Net Loss per Share | |
Schedule of potential dilutive securities that would have been anti-dilutive due to net loss | Three Months Ended 2018 2017 Stock options Restricted stock units |
Schedule of calculation of basic and diluted net loss per share | Three Months Ended 2018 2017 Numerator (in thousands): Net loss $ ) $ ) Denominator: Weighted-average shares of common stock outstanding, basic and diluted Net loss per share, basic and diluted $ ) $ ) |
Segment and Geographic Inform25
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment and Geographic Information | |
Schedule of revenue, segment profitability and segment profitability margin by segment | Three Months Ended 2018 2017 (dollars in thousands) Revenue by segment* Graduate Program Segment $ $ Short Course Segment** — Total revenue $ $ Segment profitability** Graduate Program Segment $ ) $ Short Course Segment ) — Total segment profitability $ ) $ Segment profitability margin*** Graduate Program Segment )% % Short Course Segment ) — Total segment profitability margin )% % * The Company did not have any material intersegment revenues for any periods presented. ** The Company evaluates segment profitability as net income or net loss, as applicable, before net interest income (expense), taxes, depreciation and amortization, foreign currency gains or losses, acquisition-related gains or losses and stock-based compensation expense. Some or all of these items may not be applicable in any given reporting period. *** The Company defines segment profitability margin as segment profitability as a percentage of consolidated revenue. |
Schedule of reconciliation of net loss to total segment profitability | Three Months Ended 2018 2017 (in thousands) Net loss $ ) $ ) Adjustments: Interest income ) ) Interest expense — Foreign currency loss — Depreciation and amortization expense Income tax benefit ) — Stock-based compensation expense Total adjustments Total segment profitability $ ) $ |
Schedule of total assets by segment | March 31, December 31, (in thousands) Total assets Graduate Program Segment $ $ Short Course Segment Total assets $ $ |
Schedule of contract assets and liabilities | March 31, December 31, (in thousands) Contract assets Graduate Program Segment accounts receivable, net $ $ Graduate Program Segment unbilled revenue Short Course Segment accounts receivable, net Total contract assets $ $ Contract liabilities Graduate Program Segment deferred revenue $ $ Short Course Segment deferred revenue Total contract liabilities $ $ |
Organization, Basis of Presenta
Organization, Basis of Presentation and Recent Accounting Pronouncements (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Organization | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Amortizable Intangible Assets | |||
Useful life of capitalized content development costs | 5 years | ||
Non-Cash Long-Lived Asset Additions | |||
Capital asset additions during the period | $ 31 | $ 20 | |
Cash capital expenditure | 14.3 | ||
Accounts payable and accrued expenses | |||
Marketing and Sales Costs | |||
Accrued marketing costs | 11.3 | $ 11.7 | |
Leasehold improvements | |||
Non-Cash Long-Lived Asset Additions | |||
Capital asset additions during the period | 11.1 | ||
Capitalized technology and content development | |||
Non-Cash Long-Lived Asset Additions | |||
Capital asset additions during the period | 4.8 | ||
Other property and equipment | |||
Non-Cash Long-Lived Asset Additions | |||
Capital asset additions during the period | 4.1 | ||
Landlord funded leasehold improvements | |||
Non-Cash Long-Lived Asset Additions | |||
Non-cash capital expenditure | $ 7.4 | $ 5.4 | |
Graduate Program Segment | Minimum | |||
Performance Obligations | |||
Period of contract with university clients | 10 years | ||
Graduate Program Segment | Maximum | |||
Performance Obligations | |||
Period of contract with university clients | 15 years | ||
Short Course Segment | Minimum | |||
Performance Obligations | |||
Period of contract with university clients | 42 days | ||
Short Course Segment | Maximum | |||
Performance Obligations | |||
Period of contract with university clients | 112 days |
Business Combination - Estimate
Business Combination - Estimated fair values of the assets acquired and liabilities assumed (Details) - GetSmarter $ in Millions | Jul. 01, 2017USD ($) |
Acquisition | |
Cash consideration | $ 98.7 |
Potential earn-out payment | $ 20 |
Business Combination - Pro form
Business Combination - Pro forma combined revenue and net loss (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($)$ / shares | |
Business Combination | |
Pro forma revenue | $ 69,037 |
Pro forma net loss | $ (4,941) |
Pro forma net loss per share, basic and diluted | $ / shares | $ (0.10) |
Goodwill and Amortizable Inta30
Goodwill and Amortizable Intangible Assets - Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Amortizable Intangible Assets | ||
Balance as of December 31, 2017 | $ 71,988 | |
Foreign currency translation adjustments | 3,308 | |
Balance as of March 31, 2018 | 75,296 | |
Gross Carrying Amount | 153,301 | $ 124,542 |
Accumulated Amortization | (38,605) | (33,781) |
Net Carrying Amount | $ 114,696 | 90,761 |
Capitalized technology | ||
Goodwill and Amortizable Intangible Assets | ||
Estimated Average Useful Life (in years) | 3 years | |
Gross Carrying Amount | $ 43,569 | 27,108 |
Accumulated Amortization | (10,820) | (9,486) |
Net Carrying Amount | $ 32,749 | 17,622 |
Capitalized content development | ||
Goodwill and Amortizable Intangible Assets | ||
Estimated Average Useful Life (in years) | 4 years | |
Gross Carrying Amount | $ 60,815 | 55,872 |
Accumulated Amortization | (23,525) | (21,417) |
Net Carrying Amount | $ 37,290 | 34,455 |
University client relationships | ||
Goodwill and Amortizable Intangible Assets | ||
Estimated Average Useful Life (in years) | 9 years | |
Gross Carrying Amount | $ 30,692 | 29,443 |
Accumulated Amortization | (2,558) | (1,636) |
Net Carrying Amount | $ 28,134 | 27,807 |
Trade names and domain names | ||
Goodwill and Amortizable Intangible Assets | ||
Estimated Average Useful Life (in years) | 10 years | |
Gross Carrying Amount | $ 18,225 | 12,119 |
Accumulated Amortization | (1,702) | (1,242) |
Net Carrying Amount | 16,523 | 10,877 |
In process capitalized technology and content development | ||
Goodwill and Amortizable Intangible Assets | ||
Net Carrying Amount | 29,500 | $ 15,600 |
Short Course Segment | ||
Goodwill and Amortizable Intangible Assets | ||
Balance as of December 31, 2017 | 71,988 | |
Foreign currency translation adjustments | 3,308 | |
Balance as of March 31, 2018 | $ 75,296 |
Goodwill and Amortizable Inta31
Goodwill and Amortizable Intangible Assets - Estimated Future Amortization Expense (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)item | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||
Number of domains purchased | item | 11 | ||
Purchase of website and domains | $ 5,700 | ||
Amortization expense | 5,100 | $ 2,400 | |
Future amortization expense | |||
Net Carrying Amount | 114,696 | $ 90,761 | |
Excluding in process capitalized technology and content development | |||
Future amortization expense | |||
Remainder of 2018 | 14,241 | ||
2,019 | 17,247 | ||
2,020 | 14,255 | ||
2,021 | 10,660 | ||
2,022 | 7,260 | ||
Thereafter | 21,537 | ||
Net Carrying Amount | 85,200 | ||
WeWork Companies, Inc. | |||
Finite-Lived Intangible Assets [Line Items] | |||
Agreement to offer scholarships | 5,000 | ||
Flatiron School, Inc | Software development license and services agreement | |||
Finite-Lived Intangible Assets [Line Items] | |||
License and service cost | 14,500 | ||
Payments made for acquisition of software | 13,200 | ||
Accrued liability current | 4,200 | ||
Outstanding license and software services Consideration | $ 1,300 |
Debt (Details)
Debt (Details) $ in Thousands | Mar. 31, 2018USD ($)item | Dec. 31, 2017USD ($) |
Lines of Credit | ||
Aggregate borrowing base | $ 25,000 | |
Amount outstanding | 0 | $ 0 |
Security deposit | $ 15,000 | |
Government Grants | ||
Number of government grants | item | 2 | |
Amount of loan | $ 3,500 | 3,500 |
Prince George's County, Maryland | ||
Government Grants | ||
Loan interest rate (in percentage) | 3.00% | |
Department of Commerce | ||
Government Grants | ||
Loan interest rate (in percentage) | 3.00% | |
Standby letters of credit | ||
Lines of Credit | ||
Aggregate borrowing base | $ 10,000 | |
Short Course Segment | Revolving working capital facility | ||
Lines of Credit | ||
Aggregate borrowing base | $ 1,900 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Taxes | ||
Income tax benefit | $ (1,228) | |
U.S. statutory federal income tax rate (as a percent) | 8.00% | 0.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | Jan. 01, 2018 | Jan. 01, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Stockholders' Equity | ||||
Authorized shares of capital stock | 205,000,000 | |||
Authorized shares of common stock | 200,000,000 | 200,000,000 | ||
Authorized shares of preferred stock | 5,000,000 | 5,000,000 | ||
Shares of common stock reserved for future issuance | ||||
Outstanding stock options | 4,334,612 | |||
Possible future issuance under 2014 Equity Incentive Plan | 7,056,832 | |||
Outstanding restricted stock units | 1,281,880 | |||
Available for future issuance under employee stock purchase plan | 1,000,000 | |||
Total shares of common stock reserved for future issuance | 13,673,324 | |||
Stock options | ||||
Stockholders equity compensation | ||||
Granted (in shares) | 8,731 | |||
Weighted-average exercise price (in dollars per share) | $ 64.51 | |||
Equity Incentive Plan 2014 | Stock options | ||||
Stockholders equity compensation | ||||
Granted (in shares) | 2,625,292 | |||
Weighted-average exercise price (in dollars per share) | $ 2,357,579 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) | Jun. 05, 2017USD ($) | Mar. 31, 2018USD ($)item | Mar. 31, 2017USD ($) |
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||
Number of share-based employee compensation plans | item | 2 | ||
Percentage of purchase price to fair market value | 90.00% | ||
Maximum payroll deduction amount per calendar year | $ 25,000 | ||
Stock-based compensation expense | $ 7,122,000 | $ 3,895,000 | |
Curriculum and teaching | |||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||
Stock-based compensation expense | 2,000 | ||
Servicing and support | |||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||
Stock-based compensation expense | 872,000 | 695,000 | |
Technology and content development | |||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||
Stock-based compensation expense | 711,000 | 646,000 | |
Program marketing and sales | |||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||
Stock-based compensation expense | 489,000 | 342,000 | |
General and administrative | |||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||
Stock-based compensation expense | $ 5,048,000 | $ 2,212,000 | |
Minimum | |||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||
Percentage of payroll deduction | 1.00% | ||
Maximum | |||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||
Percentage of payroll deduction | 15.00% |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Stock options | |
Number of Options | |
Outstanding balance at the beginning of the period (in shares) | shares | 4,559,176 |
Granted (in shares) | shares | 8,731 |
Exercised (in shares) | shares | (186,049) |
Forfeited (in shares) | shares | (47,246) |
Outstanding balance at the end of the period (in shares) | shares | 4,334,612 |
Exercisable at the end of the period (in shares) | shares | 3,265,262 |
Weighted Average Exercise Price per Share | |
Outstanding balance at the beginning of the period (in dollars per share) | $ / shares | $ 15.10 |
Granted (in dollars per share) | $ / shares | 64.51 |
Exercised (in dollars per share) | $ / shares | 11.40 |
Forfeited (in dollars per share) | $ / shares | 36.50 |
Outstanding balance at the end of the period (in dollars per share) | $ / shares | 15.12 |
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 9.21 |
Weighted Average Remaining Contractual Term (in years) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 4 years 8 months 16 days |
Aggregate Intrinsic Value | |
Exercisable at the end of the period | $ | $ 244.3 |
Restricted Stock Units | |
Summary of restricted stock unit activity | |
Outstanding balance at the beginning of the period (in shares) | shares | 1,413,423 |
Granted (in shares) | shares | 64,184 |
Vested (in shares) | shares | (167,595) |
Forfeited (in shares) | shares | (28,132) |
Outstanding balance at the end of the period (in shares) | shares | 1,281,880 |
Weighted-Average Grant-Date Fair value | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 29.95 |
Granted (in dollars per share) | $ / shares | 64.51 |
Vested (in dollars per share) | $ / shares | 11.45 |
Forfeited (in dollars per share) | $ / shares | 35.67 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 33.97 |
Net Loss per Share - Antidiluti
Net Loss per Share - Antidilutive (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restricted Stock Units | ||
Potential dilutive securities that would have been anti-dilutive | ||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 1,281,880 | 1,244,229 |
Stock options | ||
Potential dilutive securities that would have been anti-dilutive | ||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 4,334,612 | 4,803,073 |
Net Loss per Share - Other (Det
Net Loss per Share - Other (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator (in thousands): | ||
Net loss | $ (14,871) | $ (3,439) |
Denominator: | ||
Weighted-average shares of common stock outstanding, basic and diluted | 52,687,299 | 47,237,341 |
Net loss per share, basic and diluted (in dollars per share) | $ (0.28) | $ (0.07) |
Segment and Geographic Inform39
Segment and Geographic Information - Concentration Risk (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)segmentclient | Mar. 31, 2017USD ($)client | Dec. 31, 2017USD ($)client | |
Segment Information | |||
Number of operating segments | segment | 2 | ||
Number of reportable segments | segment | 2 | ||
Revenue | $ 92,288 | $ 64,829 | |
Accounts receivable, net | 40,290 | $ 14,174 | |
Graduate Program Segment | |||
Segment Information | |||
Revenue | 80,559 | $ 64,829 | |
Accounts receivable, net | 32,766 | 12,520 | |
Short Course Segment | |||
Segment Information | |||
Revenue | 11,729 | ||
Accounts receivable, net | $ 1,350 | 988 | |
Customer concentration risk | Revenue | Graduate Program Segment | |||
Segment Information | |||
Number of clients who account for more then 10% | client | 3 | 4 | |
Percentage of concentration of credit risk | 10.00% | 10.00% | |
Customer concentration risk | Revenue | Short Course Segment | |||
Segment Information | |||
Number of clients who account for more then 10% | client | 0 | ||
Percentage of concentration of credit risk | 10.00% | ||
Customer concentration risk | Accounts receivable, net | Short Course Segment | |||
Segment Information | |||
Accounts receivable, net | $ 0 | $ 0 | |
Customer concentration risk | Revenue Segment | Short Course Segment | |||
Segment Information | |||
Number of clients who account for more then 10% | client | 3 | ||
Credit concentration risk | Accounts receivable, net | Graduate Program Segment | |||
Segment Information | |||
Number of clients who account for more then 10% | client | 1 | 2 | |
Percentage of concentration of credit risk | 10.00% | 10.00% | |
Credit concentration risk | Accounts receivable, net | Short Course Segment | |||
Segment Information | |||
Percentage of concentration of credit risk | 10.00% | 10.00% | |
University client A | Customer concentration risk | Revenue | Graduate Program Segment | |||
Segment Information | |||
Revenue | $ 20,700 | $ 19,700 | |
Percentage of concentration of credit risk | 22.00% | 30.00% | |
University client A | Customer concentration risk | Revenue | Short Course Segment | |||
Segment Information | |||
Percentage of concentration of credit risk | 11.00% | ||
University client A | Customer concentration risk | Revenue Segment | Short Course Segment | |||
Segment Information | |||
Percentage of concentration of credit risk | 83.00% | ||
University client A | Credit concentration risk | Accounts receivable, net | Graduate Program Segment | |||
Segment Information | |||
Accounts receivable, net | $ 20,600 | $ 9,400 | |
Percentage of concentration of credit risk | 51.00% | 67.00% | |
University client B | Customer concentration risk | Revenue | Graduate Program Segment | |||
Segment Information | |||
Revenue | $ 13,500 | $ 11,700 | |
Percentage of concentration of credit risk | 15.00% | 18.00% | |
University client B | Credit concentration risk | Accounts receivable, net | Graduate Program Segment | |||
Segment Information | |||
Accounts receivable, net | $ 2,000 | ||
Percentage of concentration of credit risk | 14.00% | ||
University client C | Customer concentration risk | Revenue | Graduate Program Segment | |||
Segment Information | |||
Revenue | $ 9,600 | $ 6,800 | |
Percentage of concentration of credit risk | 10.00% | 11.00% | |
University client D | Customer concentration risk | Revenue | Graduate Program Segment | |||
Segment Information | |||
Revenue | $ 6,500 | ||
Percentage of concentration of credit risk | 10.00% |
Segment Information - Revenue a
Segment Information - Revenue and Total assets by segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Revenue by segment | |||
Total segment revenue | $ 92,288 | $ 64,829 | |
Adjusted EBITDA (loss) by segment | |||
Total adjusted EBITDA (loss) | (1,522) | 3,908 | |
Net loss | |||
Net loss | (14,871) | (3,439) | |
Adjustments | |||
Interest income | 342 | 196 | |
Interest expense | 27 | ||
Foreign currency loss | 395 | ||
Depreciation and amortization expense | 7,375 | 3,648 | |
Income tax benefit | (1,228) | ||
Stock-based compensation expense | 7,122 | 3,895 | |
Total adjustments | $ 13,349 | $ 7,347 | |
Segment profitability margin | |||
Total segment profitability margin | (1.60%) | 6.00% | |
Total assets | |||
Total assets | $ 504,108 | $ 482,062 | $ 482,062 |
Contract assets | |||
Accounts receivable, net | 40,290 | 14,174 | |
Contract assets | 40,246 | 14,174 | |
Contract liabilities | |||
Contract liabilities | 21,625 | 7,024 | |
Graduate Program Segment | |||
Revenue by segment | |||
Total segment revenue | 80,559 | 64,829 | |
Adjusted EBITDA (loss) by segment | |||
Total adjusted EBITDA (loss) | $ (274) | $ 3,908 | |
Segment profitability margin | |||
Total segment profitability margin | (0.30%) | 6.00% | |
Total assets | |||
Total assets | $ 372,405 | $ 359,597 | |
Contract assets | |||
Accounts receivable, net | 32,766 | 12,520 | |
unbilled revenue | 6,130 | 666 | |
Contract liabilities | |||
Contract liabilities | 12,931 | 2,523 | |
Movement from deferred revenue | |||
Deferred revenue reclassified to revenue | 2,500 | ||
Contract Acquisition Costs | |||
Capitalized contract acquisition costs | 100 | ||
Amortization expense of capitalized contract cost | 0 | ||
Short Course Segment | |||
Revenue by segment | |||
Total segment revenue | 11,729 | ||
Adjusted EBITDA (loss) by segment | |||
Total adjusted EBITDA (loss) | $ (1,248) | ||
Segment profitability margin | |||
Total segment profitability margin | (1.30%) | ||
Total assets | |||
Total assets | $ 131,703 | $ 122,465 | |
Contract assets | |||
Accounts receivable, net | 1,350 | 988 | |
Contract liabilities | |||
Contract liabilities | 8,694 | $ 4,501 | |
Movement from deferred revenue | |||
Deferred revenue reclassified to revenue | $ 4,500 |
Segment and Geographic Inform41
Segment and Geographic Information - Geographical Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Geographical Information | |||
Revenue | $ 92,288 | $ 64,829 | |
Short Course Segment | |||
Geographical Information | |||
Revenue | 11,729 | ||
Short Course Segment | Non-US | |||
Geographical Information | |||
Revenue | 7,400 | ||
Long-lived assets | $ 900 | $ 700 |