Exhibit 99.1
2U, Inc. Reports Second Quarter 2019 Financial Results
LANHAM, Md. — July 30, 2019 — 2U, Inc. (Nasdaq: TWOU), a global leader in education technology, today reported financial and operating results for the second quarter ended June 30, 2019.
Second Quarter 2019 Results
· Revenue was $135.5 million, an increase of 39% from $97.4 million in the second quarter of 2018, despite the $3.3 million unfavorable impact from a deferred revenue fair value purchase accounting adjustment in the second quarter of 2019.
· Net loss was $(28.0) million, or $(0.46) per share, compared to $(18.3) million, or $(0.33) per share, in the second quarter of 2018.
· Adjusted net loss was $(25.8) million, or $(0.43) per share, compared to $(10.3) million, or $(0.19) per share, in the second quarter of 2018.
· Adjusted EBITDA loss was $(15.0) million, compared to $(5.6) million in the second quarter of 2018.
“With the close of our Trilogy acquisition, 2U’s business is evolving to better meet marketplace demand and the transforming needs of our university partners and lifelong learners,” Co-Founder and CEO Christopher “Chip” Paucek said. “As we deliver our full portfolio of educational offerings to new and existing partners, we are also setting 2U on a defined path to profitability by tempering short-term growth projections and leveraging our scale to drive greater operational efficiencies across the business.”
Recent Developments
2U recently announced the following:
· July 30, 2019: 2U today announced a 10-year contract extension with the University of Cape Town to deliver new short courses across the university.
· July 30, 2019: 2U today announced a new partnership with Butler University to deliver a Trilogy-powered data analytics boot camp.
· July 29, 2019: A new partnership with the University of Texas at San Antonio to deliver a Trilogy-powered coding boot camp.
· July 18, 2019: A new partnership with Johns Hopkins Whiting School of Engineering to deliver a Trilogy-powered coding boot camp.
· July 2, 2019: A new partnership with the University of Manchester to deliver a Trilogy-powered coding boot camp.
· June 26, 2019: A new partnership with the University of Adelaide to deliver a Trilogy-powered coding boot camp.
· June 21, 2019: 2U was named a top workplace by The Washington Post for the fifth consecutive year.
· June 13, 2019: A new partnership with the University of Birmingham to deliver a Trilogy-powered coding boot camp. It is the first coding boot camp in the UK to be offered by a university.
· June 3, 2019: 2U announced Ebony Lee would join the company as its managing director for graduate programs to oversee the execution and growth of the graduate program business.
· May 22, 2019: The completion of 2U’s acquisition of Trilogy Education Services, Inc., a workforce accelerator that empowers the world’s leading universities to prepare professionals for high-growth careers in the digital economy. The combined company will expand 2U’s offerings across the career curriculum continuum.
· May 16, 2019: A new partnership with the University of Western Australia to deliver a Trilogy-powered coding boot camp.
· May 14, 2019: A new partnership with the University of Connecticut School of Engineering to deliver a Trilogy-powered coding boot camp.
· May 8, 2019: An expansion of a partnership with UC Davis Graduate School of Management to deliver two online short courses in leadership and strategic negotiations.
Financial Outlook
Based on information available as of today, 2U is issuing the following guidance for the third quarter and full-year of 2019. This guidance assumes foreign currency exchange rates as of June 30, 2019 remain constant, including the U.S. dollar/South African rand and the U.S. dollar/British pound.
| | 3Q 2019 | | FY 2019 | |
| | (in millions, except per share amounts) | |
Revenue | | $147.6 - $152.6 | | $565.7 - $575.7 | |
Net loss | | $(69.3) - $(66.3) | | $(157.5) - $(151.5) | |
Net loss per share | | $(1.10) - $(1.05) | | $(2.57) - $(2.47) | |
Adjusted net loss | | $(33.8) - $(30.8) | | $(76.9) - $(70.9) | |
Adjusted net loss per share | | $(0.53) - $(0.49) | | $(1.25) - $(1.16) | |
Weighted-average shares of common stock outstanding, basic | | 63.2 | | 61.3 | |
Adjusted EBITDA (loss) | | $(18.4) - $(15.4) | | $(28.0) - $(22.0) | |
Stock-based compensation expense | | $18.9 - $19.9 | | $56.0 - $58.0 | |
The revenue reflected in this guidance includes a deferred revenue fair value purchase accounting adjustment related to the Trilogy acquisition. Adding back revenue eliminated as a part of purchase accounting, our revenue guidance ranges would be $153.6 million to $158.6 million and $576.9 million to $586.9 million for the third quarter and full year, respectively.
In giving third quarter and full-year guidance, the Company’s expectations for the fourth quarter are implied. Note that the cost seasonality driven by reduced marketing spend during the holiday period in the fourth quarter typically improves margins in that quarter; fourth quarter margins therefore should not be viewed as a run rate for the first quarter of the following year.
Non-GAAP Measures
To supplement the Company’s consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we use adjusted EBITDA (loss), adjusted net income (loss) and adjusted net income (loss) per share, which are non-GAAP financial measures.
We define adjusted EBITDA (loss) as net income or net loss, as applicable, before net interest income (expense), taxes, depreciation and amortization expense, foreign currency gains or losses, acquisition-related gains or losses, deferred revenue fair value adjustments, transaction costs (including, as applicable, advisory fees and integration and restructuring expenses) and stock-based compensation expense. Some or all of these items may not be applicable in any given reporting period.
We define adjusted net income (loss) as net income or net loss, as applicable, before foreign currency gains or losses, acquisition-related gains or losses, deferred revenue fair value adjustments, transaction costs (including, as applicable, advisory fees and integration and restructuring expenses) and stock-based compensation expense. Adjusted net income (loss) per share is calculated as adjusted net income (loss) divided by diluted weighted-average shares of common stock outstanding for periods which result in adjusted net income, and basic weighted-average shares outstanding for periods which result in an adjusted net loss.
As of the date of this earnings release, we revised our definition of adjusted EBITDA and adjusted net income (loss) to exclude the impact of the deferred revenue fair value adjustments in connection with the acquisition of Trilogy. Business combination accounting guidance requires the write down of deferred revenue in conjunction with the acquisition. We included these revenues in adjusted EBITDA because they related to a specific transaction and are reflective of our ongoing financial performance.
The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in the Company’s financial statements. These non-GAAP measures are key metrics Company management uses to compare the Company’s performance to that of prior periods for trend analyses and for budgeting and planning purposes. These measures also provide useful information to investors and analysts relating to 2U’s financial condition and results of operations. These financial measures are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. In addition, these financial measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.
For more information on 2U’s non-GAAP financial measures and reconciliations of such measures to the nearest GAAP measures, see the reconciliation tables at the end of this press release under the heading “Reconciliation of Non-GAAP Measures.” 2U urges investors to review these reconciliations and not to rely on any single financial measure to evaluate the Company’s business.
Conference Call Information
What: | | 2U, Inc.’s second quarter 2019 financial results conference call |
When: | | Tuesday, July 30, 2019 |
Time: | | 5 p.m. ET |
Live Call: | | (877) 359-9508 |
Webcast: | | investor.2U.com |
About 2U, Inc. (Nasdaq: TWOU)
Eliminating the back row in higher education is not just a metaphor—it’s our mission. For more than a decade, 2U, Inc., a global leader in education technology, has been a trusted partner and brand steward of great universities. We build, deliver, and support more than 250 digital and in-person educational offerings, including graduate degrees, professional certificates, Trilogy-powered boot camps, and GetSmarter short courses. Together with our partners, 2U has positively transformed the lives of more than 150,000 students and lifelong learners. To learn more, visit 2U.com. #NoBackRow
Cautionary Language Concerning Forward-Looking Statements
This press release contains forward-looking statements regarding our future business expectations, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements regarding the acquisition of Trilogy and future results of the operations and financial position of 2U, Inc., including financial targets, business strategy, and plans and objectives for future operations, are forward-looking statements. 2U has based these forward-looking statements largely on its estimates of its financial results and its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs as of the date of this press release. We undertake no obligation to update these statements as a result of new information or future events. These forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from the results predicted, including, but not limited to:
· trends in the higher education market and the market for online education, and expectations for growth in those markets;
· the acceptance, adoption and growth of online learning by colleges and universities, faculty, students, employers, accreditors and state and federal licensing bodies;
· our ability to comply with evolving regulations and legal obligations related to data privacy, data protection and information security;
· our expectations about the potential benefits of our cloud-based software-as-a-service, or SaaS, technology and technology-enabled services to university clients and students;
· our dependence on third parties to provide certain technological services or components used in our platform;
· our ability to meet the anticipated launch dates of our graduate programs, short courses and boot camps;
· our expectations about the predictability, visibility and recurring nature of our business model;
· our ability to acquire new university clients and expand our graduate programs, short courses and boot camps with existing university clients;
· our ability to successfully integrate the operations of Get Educated International Proprietary Limited, or GetSmarter, and Trilogy Education Services, Inc., or Trilogy, achieve the expected benefits of the acquisitions and manage, expand and grow the combined company;
· our ability to service our substantial indebtedness and comply with the financial and other restrictive covenants contained in the credit agreement governing our senior secured term loan facility;
· our ability to execute our growth strategy in the international, undergraduate and non-degree alternative markets;
· our ability to continue to acquire prospective students for our graduate programs, short courses and boot camps;
· our ability to affect or increase student retention in our graduate programs;
· our ability to attract, hire and retain qualified employees;
· our expectations about the scalability of our cloud-based platform;
· our expectations regarding future expenses in relation to future revenue;
· potential changes in regulations applicable to us or our university clients; and
· our expectations regarding the amount of time our cash balances and other available financial resources will be sufficient to fund our operations.
These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, as amended and supplemented by risks and uncertainties under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 and other reports filed with the Securities and Exchange Commission. Moreover, 2U operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for 2U management to predict all risks, nor can 2U assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements 2U may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated.
Investor Relations Contact: Ed Goodwin, 2U, Inc., egoodwin@2U.com
Media Contact: Molly Forman, 2U, Inc., mforman@2U.com
2U, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| | June 30,
2019 | | December 31,
2018 | |
| | (unaudited) | | | |
Assets | | | | | |
Current assets | | | | | |
Cash and cash equivalents | | $ | 218,723 | | $ | 449,772 | |
Restricted cash | | 14,761 | | — | |
Investments | | — | | 25,000 | |
Accounts receivable, net | | 71,578 | | 32,636 | |
Prepaid expenses and other assets | | 43,136 | | 14,272 | |
Total current assets | | 348,198 | | 521,680 | |
Property and equipment, net | | 57,464 | | 52,299 | |
Right-of-use assets | | 36,463 | | — | |
Goodwill | | 488,747 | | 61,852 | |
Amortizable intangible assets, net | | 339,269 | | 136,605 | |
University payments and other assets, non-current | | 61,606 | | 34,918 | |
Total assets | | $ | 1,331,747 | | $ | 807,354 | |
Liabilities and stockholders’ equity | | | | | |
Current liabilities | | | | | |
Accounts payable and accrued expenses | | $ | 66,468 | | $ | 27,647 | |
Accrued compensation and related benefits | | 21,472 | | 23,001 | |
Deferred revenue | | 54,600 | | 8,345 | |
Lease liability | | 6,277 | | — | |
Other current liabilities | | 10,329 | | 9,487 | |
Total current liabilities | | 159,146 | | 68,480 | |
Long-term debt | | 245,451 | | 3,500 | |
Deferred tax liabilities, net | | 6,440 | | 6,949 | |
Lease liability, non-current | | 58,924 | | — | |
Other liabilities, non-current | | 737 | | 23,416 | |
Total liabilities | | 470,698 | | 102,345 | |
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, 63,231,376 shares issued and outstanding as of June 30, 2019; 57,968,493 shares issued and outstanding as of December 31, 2018 | | 63 | | 58 | |
Additional paid-in capital | | 1,161,321 | | 957,631 | |
Accumulated deficit | | (293,692 | ) | (244,166 | ) |
Accumulated other comprehensive loss | | (6,643 | ) | (8,514 | ) |
Total stockholders’ equity | | 861,049 | | 705,009 | |
Total liabilities and stockholders’ equity | | $ | 1,331,747 | | $ | 807,354 | |
2U, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited, in thousands, except share and per share amounts)
| | Three Months Ended
June 30, | | Six Months Ended
June 30, | |
| | 2019 | | 2018 | | 2019 | | 2018 | |
Revenue | | $ | 135,461 | | $ | 97,423 | | $ | 257,695 | | $ | 189,711 | |
Costs and expenses | | | | | | | | | |
Curriculum and teaching | | 13,308 | | 6,007 | | 20,009 | | 10,314 | |
Servicing and support | | 23,993 | | 17,297 | | 44,167 | | 32,530 | |
Technology and content development | | 26,043 | | 15,235 | | 45,837 | | 29,075 | |
Marketing and sales | | 89,749 | | 58,376 | | 166,710 | | 111,434 | |
General and administrative | | 28,408 | | 22,480 | | 51,431 | | 44,349 | |
Total costs and expenses | | 181,501 | | 119,395 | | 328,154 | | 227,702 | |
Loss from operations | | (46,040 | ) | (21,972 | ) | (70,459 | ) | (37,991 | ) |
Interest income | | 1,814 | | 912 | | 4,163 | | 1,254 | |
Interest expense | | (2,424 | ) | (27 | ) | (2,479 | ) | (54 | ) |
Other expense, net | | (13 | ) | (825 | ) | (383 | ) | (1,220 | ) |
Loss before income taxes | | (46,663 | ) | (21,912 | ) | (69,158 | ) | (38,011 | ) |
Income tax benefit | | 18,691 | | 3,565 | | 19,632 | | 4,793 | |
Net loss | | $ | (27,972 | ) | $ | (18,347 | ) | $ | (49,526 | ) | $ | (33,218 | ) |
Net loss per share, basic and diluted | | $ | (0.46 | ) | $ | (0.33 | ) | $ | (0.83 | ) | $ | (0.62 | ) |
Weighted-average shares of common stock outstanding, basic and diluted | | 60,516,662 | | 54,981,192 | | 59,334,246 | | 53,840,582 | |
Other comprehensive loss | | | | | | | | | |
Foreign currency translation adjustments, net of tax of $0 for all periods presented | | 2,243 | | (14,178 | ) | 1,871 | | (9,546 | ) |
Comprehensive loss | | $ | (25,729 | ) | $ | (32,525 | ) | $ | (47,655 | ) | $ | (42,764 | ) |
2U, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
| | Six Months Ended
June 30, | |
| | 2019 | | 2018 | |
Cash flows from operating activities | | | | | |
Net loss | | $ | (49,526 | ) | $ | (33,218 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | |
Depreciation and amortization expense | | 24,351 | | 14,783 | |
Stock-based compensation expense | | 19,551 | | 16,131 | |
Non-cash lease expense | | 5,264 | | — | |
Bad debt expense | | 993 | | — | |
Changes in operating assets and liabilities: | | | | | |
Accounts receivable, net | | (25,548 | ) | (35,932 | ) |
Payments to university clients | | (20,060 | ) | (8,923 | ) |
Prepaid expenses and other assets | | (8,796 | ) | (3,705 | ) |
Accounts payable and accrued expenses | | 18,081 | | 10,207 | |
Accrued compensation and related benefits | | (5,964 | ) | (1,998 | ) |
Deferred revenue | | 15,849 | | 24,086 | |
Other liabilities, net | | (23,056 | ) | (2,854 | ) |
Other | | 912 | | 1,221 | |
Net cash used in operating activities | | (47,949 | ) | (20,202 | ) |
Cash flows from investing activities | | | | | |
Purchase of a business, net of cash acquired | | (387,815 | ) | — | |
Additions of amortizable intangible assets | | (32,430 | ) | (40,039 | ) |
Purchases of property and equipment | | (8,139 | ) | (5,124 | ) |
Purchase of equity interests | | (5,000 | ) | — | |
Proceeds from maturities of investments | | 25,000 | | — | |
Advances made to university clients | | (100 | ) | (100 | ) |
Advances repaid by university clients | | 200 | | — | |
Other | | 4 | | — | |
Net cash used in investing activities | | (408,280 | ) | (45,263 | ) |
Cash flows from financing activities | | | | | |
Proceeds from issuance of common stock, net of offering costs | | — | | 330,862 | |
Proceeds from exercise of stock options | | 2,380 | | 4,793 | |
Proceeds from debt | | 243,726 | | — | |
Tax withholding payments associated with settlement of restricted stock units | | (2,558 | ) | (3,407 | ) |
Payments for acquisition of amortizable intangible assets | | (1,283 | ) | — | |
Payment of debt issuance costs | | (1,953 | ) | — | |
Net cash provided by financing activities | | 240,312 | | 332,248 | |
Effect of exchange rate changes on cash | | (371 | ) | (1,319 | ) |
Net (decrease) increase in cash, cash equivalents and restricted cash | | (216,288 | ) | 265,464 | |
Cash, cash equivalents and restricted cash, beginning of period | | 449,772 | | 223,370 | |
Cash, cash equivalents and restricted cash, end of period | | $ | 233,484 | | $ | 488,834 | |
2U, Inc.
Reconciliation of Non-GAAP Measures
(unaudited)
The following table presents a reconciliation of net loss to adjusted net loss for each of the periods indicated:
| | Three Months Ended
June 30, | | Six Months Ended
June 30, | |
| | 2019 | | 2018 | | 2019 | | 2018 | |
| | (in thousands, except share and per share amounts) | |
Net loss | | $ | (27,972 | ) | $ | (18,347 | ) | $ | (49,526 | ) | $ | (33,218 | ) |
Adjustments: | | | | | | | | | |
Foreign currency loss | | 13 | | 825 | | 383 | | 1,220 | |
Amortization of acquired intangible assets | | 5,341 | | 1,597 | | 6,767 | | 3,277 | |
Income tax benefit on amortization of acquired intangible assets | | (381 | ) | (438 | ) | (772 | ) | (898 | ) |
Acquisition-related income tax benefit | | (19,262 | ) | (2,987 | ) | (19,262 | ) | (2,987 | ) |
Deferred revenue fair value adjustment | | 3,352 | | — | | 3,352 | | — | |
Transaction costs | | 3,093 | | — | | 5,024 | | — | |
Stock-based compensation expense | | 9,967 | | 9,009 | | 19,551 | | 16,131 | |
Total adjustments | | 2,123 | | 8,006 | | 15,043 | | 16,743 | |
Adjusted net loss | | $ | (25,849 | ) | $ | (10,341 | ) | $ | (34,483 | ) | $ | (16,475 | ) |
Net loss per share, basic and diluted (1) | | $ | (0.46 | ) | $ | (0.33 | ) | $ | (0.83 | ) | $ | (0.62 | ) |
Adjusted net loss per share, basic and diluted (1) | | $ | (0.43 | ) | $ | (0.19 | ) | $ | (0.58 | ) | $ | (0.31 | ) |
Weighted-average shares of common stock outstanding, basic and diluted | | 60,516,662 | | 54,981,192 | | 59,334,246 | | 53,840,582 | |
(1) The Company computes net income (loss) per share and/or adjusted net income (loss) per share using diluted weighted-average shares of common stock outstanding for periods which result in net income and/or adjusted net income, and uses basic weighted-average shares of common stock outstanding for periods which result in net loss and/or adjusted net loss.
The following table presents a reconciliation of net loss to adjusted EBITDA (loss) for each of the periods indicated:
| | Three Months Ended
June 30, | | Six Months Ended
June 30, | |
| | 2019 | | 2018 | | 2019 | | 2018 | |
| | (in thousands) | |
Net loss | | $ | (27,972 | ) | $ | (18,347 | ) | $ | (49,526 | ) | $ | (33,218 | ) |
Adjustments: | | | | | | | | | |
Interest income | | (1,814 | ) | (912 | ) | (4,163 | ) | (1,254 | ) |
Interest expense | | 2,424 | | 27 | | 2,479 | | 54 | |
Foreign currency loss | | 13 | | 825 | | 383 | | 1,220 | |
Depreciation and amortization expense | | 14,653 | | 7,408 | | 24,351 | | 14,783 | |
Income tax benefit | | (18,691 | ) | (3,565 | ) | (19,632 | ) | (4,793 | ) |
Deferred revenue fair value adjustment | | 3,352 | | — | | 3,352 | | — | |
Transaction costs | | 3,093 | | — | | 5,024 | | — | |
Stock-based compensation expense | | 9,967 | | 9,009 | | 19,551 | | 16,131 | |
Total adjustments | | 12,997 | | 12,792 | | 31,345 | | 26,141 | |
Adjusted EBITDA (loss) | | $ | (14,975 | ) | $ | (5,555 | ) | $ | (18,181 | ) | $ | (7,077 | ) |
2U, Inc.
Reconciliation of Non-GAAP Measures
(unaudited)
The following table presents (i) a reconciliation of net loss guidance to adjusted net income (loss) guidance and adjusted EBITDA (loss) guidance and (ii) a reconciliation of net loss per share guidance to adjusted net income (loss) per share guidance, each at the midpoint of the ranges provided by the Company, for each of the periods indicated:
| | Three Months Ending
September 30, 2019 | | Year Ending
December 31, 2019 | |
| | $ | | $/Share | | $ | | $/Share | |
| | (in thousands, except per share amounts) | |
Net loss | | $ | (67,800 | ) | $ | (1.07 | ) | $ | (154,450 | ) | $ | (2.52 | ) |
Foreign currency loss | | — | | — | | 375 | | 0.01 | |
Amortization of acquired intangible assets | | 10,550 | | 0.17 | | 27,875 | | 0.45 | |
Income tax benefit on amortization of acquired intangible assets | | (425 | ) | (0.01 | ) | (1,650 | ) | (0.03 | ) |
Acquisition-related income tax benefit | | — | | — | | (19,275 | ) | (0.31 | ) |
Transaction costs | | — | | — | | 5,025 | | 0.08 | |
Deferred revenue fair value adjustment | | 5,925 | | 0.09 | | 11,150 | | 0.18 | |
Stock-based compensation expense | | 19,450 | | 0.31 | | 57,025 | | 0.93 | |
Adjusted net loss | | (32,300 | ) | (0.51 | ) | (73,925 | ) | (1.21 | ) |
Interest income | | (800 | ) | * | | (5,350 | ) | * | |
Interest expense | | 5,725 | | * | | 13,925 | | * | |
Depreciation and amortization expense | | 10,150 | | * | | 39,125 | | * | |
Income tax expense | | 350 | | * | | 1,175 | | * | |
Adjusted EBITDA (loss) | | $ | (16,875 | ) | $ | * | | $ | (25,050 | ) | $ | * | |
Projected weighted-average shares of common stock outstanding, basic | | | | 63,225 | | | | 61,300 | |
* Not provided.
2U, Inc.
Key Financial Performance Metrics
(unaudited)
Full Course Equivalent Enrollments
Graduate Program Segment
The following table sets forth the full course equivalent enrollments and average revenue per full course equivalent enrollment in our Graduate Program Segment for the last eight quarters.
| | Q3 ‘17 | | Q4 ‘17 | | Q1 ‘18 | | Q2 ‘18 | | Q3 ‘18 | | Q4 ‘18 | | Q1 ‘19 | | Q2 ‘19 | |
Graduate Program Segment full course equivalent enrollments | | 24,062 | | 27,082 | | 29,770 | | 30,548 | | 32,665 | | 34,695 | | 39,512 | | 39,180 | |
| | | | | | | | | | | | | | | | | |
Graduate Program Segment average revenue per full course equivalent enrollment | | $ | 2,740 | | $ | 2,758 | | $ | 2,706 | | $ | 2,658 | | $ | 2,747 | | $ | 2,792 | | $ | 2,637 | | $ | 2,588 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Alternative Credential Segment
The following table sets forth the full course equivalent enrollments and average revenue per full course equivalent enrollment in our Alternative Credential Segment for the last eight quarters.
| | Q3 ‘17* | | Q4 ‘17 | | Q1 ‘18 | | Q2 ‘18 | | Q3 ‘18 | | Q4 ‘18 | | Q1 ‘19 | | Q2 ‘19** | |
Alternative Credential Segment full course equivalent enrollments | | 4,079 | | 6,751 | | 6,002 | | 8,222 | | 8,937 | | 9,041 | | 9,128 | | 12,662 | |
| | | | | | | | | | | | | | | | | |
Alternative Credential Segment average revenue per full course equivalent enrollment | | $ | 1,232 | | $ | 1,777 | | $ | 1,954 | | $ | 1,972 | | $ | 1,930 | | $ | 2,015 | | $ | 1,979 | | $ | 2,955 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
* We acquired GetSmarter on July 1, 2017 and GetSmarter’s results of operations are included in our results from the date of acquisition. As such, GetSmarter will impact the full course equivalent enrollment measures for our Alternative Credential Segment from the acquisition date forward. The calculation of the Alternative Credential Segment’s average revenue per full course equivalent enrollment includes $0.7 million of revenue that was excluded from the results of operations in the third quarter of 2017, due to a deferred revenue fair value purchase accounting adjustment recorded as part of the acquisition of GetSmarter.
** We acquired Trilogy on May 22, 2019 and Trilogy’s results of operations are included in our results from the date of acquisition. As such, Trilogy will impact the full course equivalent enrollment measures for our Alternative Credential Segment from the acquisition date forward. The calculation of the Alternative Credential Segment’s average revenue per full course equivalent enrollment includes $3.3 million of revenue that was excluded from the results of operations in the second quarter of 2019, due to a deferred revenue fair value purchase accounting adjustment recorded as part of the acquisition of Trilogy.
