Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 05, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-36376 | |
Entity Registrant Name | 2U, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-2335939 | |
Entity Address, Address Line One | 7900 Harkins Road | |
Entity Address, City or Town | Lanham, | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20706 | |
City Area Code | 301 | |
Local Phone Number | 892-4350 | |
Title of 12(b) Security | Common stock, $0.001 par value per share | |
Trading Symbol | TWOU | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 75,372,101 | |
Entity Central Index Key | 0001459417 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 934,348 | $ 500,629 |
Restricted cash | 16,976 | 18,237 |
Accounts receivable, net | 95,390 | 46,663 |
Prepaid expenses and other assets | 68,388 | 39,353 |
Total current assets | 1,115,102 | 604,882 |
Property and equipment, net | 48,006 | 52,734 |
Right-of-use assets | 77,940 | 60,785 |
Goodwill | 414,004 | 415,830 |
Amortizable intangible assets, net | 291,427 | 312,770 |
Other assets, non-current | 87,003 | 97,263 |
Total assets | 2,033,482 | 1,544,264 |
Current liabilities | ||
Accounts payable and accrued expenses | 155,116 | 130,674 |
Deferred revenue | 96,984 | 75,493 |
Lease liability | 11,243 | 10,024 |
Other current liabilities | 37,033 | 21,178 |
Total current liabilities | 300,376 | 237,369 |
Long-term debt | 742,769 | 273,173 |
Deferred tax liabilities, net | 1,295 | 2,810 |
Lease liability, non-current | 103,024 | 83,228 |
Other liabilities, non-current | 6,553 | 6,694 |
Total liabilities | 1,154,017 | 603,274 |
Commitments and contingencies (Note 5) | ||
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $0.001 par value, 200,000,000 shares authorized, 74,749,601 shares issued and outstanding as of September 30, 2021; 72,451,521 shares issued and outstanding as of December 31, 2020 | 75 | 72 |
Additional paid-in capital | 1,714,647 | 1,646,574 |
Accumulated deficit | (823,377) | (695,872) |
Accumulated other comprehensive loss | (11,880) | (9,784) |
Total stockholders’ equity | 879,465 | 940,990 |
Total liabilities and stockholders’ equity | $ 2,033,482 | $ 1,544,264 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, issued (in shares) | 74,749,601 | 72,451,521 |
Common stock, outstanding (in shares) | 74,749,601 | 72,451,521 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Total revenue | $ 232,376 | $ 201,073 | $ 702,058 | $ 559,239 |
Costs and expenses | ||||
Curriculum and teaching | 30,869 | 30,153 | 98,805 | 76,887 |
Servicing and support | 33,898 | 32,536 | 101,947 | 93,363 |
Technology and content development | 43,106 | 40,223 | 128,539 | 113,040 |
Marketing and sales | 118,300 | 100,068 | 346,181 | 297,624 |
General and administrative | 49,736 | 44,000 | 144,342 | 127,207 |
Total costs and expenses | 275,909 | 246,980 | 819,814 | 708,121 |
Loss from operations | (43,533) | (45,907) | (117,756) | (148,882) |
Interest income | 474 | 713 | 1,188 | 1,380 |
Interest expense | (16,945) | (7,564) | (33,014) | (19,575) |
Loss on debt extinguishment | 0 | 0 | (1,101) | (11,671) |
Other income (expense), net | (425) | 42 | 22,730 | (1,659) |
Loss before income taxes | (60,429) | (52,716) | (127,953) | (180,407) |
Income tax benefit | 319 | 162 | 448 | 1,580 |
Net loss | $ (60,110) | $ (52,554) | $ (127,505) | $ (178,827) |
Net loss per share, basic (in dollars per share) | $ (0.80) | $ (0.77) | $ (1.72) | $ (2.69) |
Net loss per share, diluted (in dollars per share) | $ (0.80) | $ (0.77) | $ (1.72) | $ (2.69) |
Weighted-average shares of common stock outstanding, basic (in shares) | 74,691,521 | 68,580,439 | 74,266,999 | 66,368,686 |
Weighted-average shares of common stock outstanding, diluted (in shares) | 74,691,521 | 68,580,439 | 74,266,999 | 66,368,686 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments, net of tax of $0 for all periods presented | $ (4,268) | $ 1,667 | $ (2,096) | $ (13,044) |
Comprehensive loss | $ (64,378) | $ (50,887) | $ (129,601) | $ (191,871) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2019 | 63,569,109 | ||||
Beginning balance at Dec. 31, 2019 | $ 711,250,000 | $ 63,000 | $ 1,197,379,000 | $ (479,388,000) | $ (6,804,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | 96,683 | ||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | 0 | $ 1,000 | (1,000) | ||
Exercise of stock options (in shares) | 37,275 | ||||
Exercise of stock options | 384,000 | 384,000 | |||
Stock-based compensation expense | 20,870,000 | 20,870,000 | |||
Net loss | (60,106,000) | (60,106,000) | |||
Foreign currency translation adjustment | (16,115,000) | (16,115,000) | |||
Ending balance (in shares) at Mar. 31, 2020 | 63,703,067 | ||||
Ending balance at Mar. 31, 2020 | 656,283,000 | $ 64,000 | 1,218,632,000 | (539,494,000) | (22,919,000) |
Beginning balance (in shares) at Dec. 31, 2019 | 63,569,109 | ||||
Beginning balance at Dec. 31, 2019 | 711,250,000 | $ 63,000 | 1,197,379,000 | (479,388,000) | (6,804,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (178,827,000) | ||||
Foreign currency translation adjustment | (13,044,000) | ||||
Ending balance (in shares) at Sep. 30, 2020 | 71,294,706 | ||||
Ending balance at Sep. 30, 2020 | 951,573,000 | $ 71,000 | 1,629,565,000 | (658,215,000) | (19,848,000) |
Beginning balance (in shares) at Mar. 31, 2020 | 63,703,067 | ||||
Beginning balance at Mar. 31, 2020 | 656,283,000 | $ 64,000 | 1,218,632,000 | (539,494,000) | (22,919,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | 355,506 | ||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (463,000) | (463,000) | |||
Exercise of stock options (in shares) | 158,453 | ||||
Exercise of stock options | 1,441,000 | 1,441,000 | |||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 83,573 | ||||
Issuance of common stock in connection with employee stock purchase plan | 1,771,000 | 1,771,000 | |||
Equity component of convertible senior notes, net of issuance costs | 114,551,000 | 114,551,000 | |||
Purchases of capped calls in connection with convertible senior notes | (50,540,000) | (50,540,000) | |||
Stock-based compensation expense | 21,091,000 | 21,091,000 | |||
Net loss | (66,167,000) | (66,167,000) | |||
Foreign currency translation adjustment | 1,404,000 | 1,404,000 | |||
Ending balance (in shares) at Jun. 30, 2020 | 64,300,599 | ||||
Ending balance at Jun. 30, 2020 | 679,371,000 | $ 64,000 | 1,306,483,000 | (605,661,000) | (21,515,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock in connection with a public offering of common stock, net of offering costs (in shares) | 6,800,000 | ||||
Issuance of common stock in connection with a public offering of common stock, net of offering costs | 299,796,000 | $ 7,000 | 299,789,000 | ||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | 112,460 | ||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (6,000) | (6,000) | |||
Exercise of stock options (in shares) | 81,647 | ||||
Exercise of stock options | 1,298,000 | 1,298,000 | |||
Stock-based compensation expense | 22,001,000 | 22,001,000 | |||
Net loss | (52,554,000) | (52,554,000) | |||
Foreign currency translation adjustment | 1,667,000 | 1,667,000 | |||
Ending balance (in shares) at Sep. 30, 2020 | 71,294,706 | ||||
Ending balance at Sep. 30, 2020 | $ 951,573,000 | $ 71,000 | 1,629,565,000 | (658,215,000) | (19,848,000) |
Beginning balance (in shares) at Dec. 31, 2020 | 72,451,521 | 72,451,521 | |||
Beginning balance at Dec. 31, 2020 | $ 940,990,000 | $ 72,000 | 1,646,574,000 | (695,872,000) | (9,784,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | 1,404,971 | ||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (12,613,000) | $ 2,000 | (12,615,000) | ||
Exercise of stock options (in shares) | 181,716 | ||||
Exercise of stock options | 3,533,000 | 3,533,000 | |||
Stock-based compensation expense | 24,947,000 | 24,947,000 | |||
Net loss | (45,564,000) | (45,564,000) | |||
Foreign currency translation adjustment | (805,000) | (805,000) | |||
Ending balance (in shares) at Mar. 31, 2021 | 74,038,208 | ||||
Ending balance at Mar. 31, 2021 | $ 910,488,000 | $ 74,000 | 1,662,439,000 | (741,436,000) | (10,589,000) |
Beginning balance (in shares) at Dec. 31, 2020 | 72,451,521 | 72,451,521 | |||
Beginning balance at Dec. 31, 2020 | $ 940,990,000 | $ 72,000 | 1,646,574,000 | (695,872,000) | (9,784,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Exercise of stock options (in shares) | 280,241 | ||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 50,406 | ||||
Issuance of common stock in connection with employee stock purchase plan | $ 1,800,000 | ||||
Net loss | $ (127,505,000) | ||||
Foreign currency translation adjustment | $ (2,096,000) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 74,749,601 | 74,749,601 | |||
Ending balance at Sep. 30, 2021 | $ 879,465,000 | $ 75,000 | 1,714,647,000 | (823,377,000) | (11,880,000) |
Beginning balance (in shares) at Mar. 31, 2021 | 74,038,208 | ||||
Beginning balance at Mar. 31, 2021 | 910,488,000 | $ 74,000 | 1,662,439,000 | (741,436,000) | (10,589,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | 390,976 | ||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (1,501,000) | $ 1,000 | (1,502,000) | ||
Exercise of stock options (in shares) | 28,263 | ||||
Exercise of stock options | 737,000 | 737,000 | |||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 50,406 | ||||
Issuance of common stock in connection with employee stock purchase plan | 1,773,000 | 1,773,000 | |||
Stock-based compensation expense | 24,776,000 | 24,776,000 | |||
Net loss | (21,831,000) | (21,831,000) | |||
Foreign currency translation adjustment | 2,977,000 | 2,977,000 | |||
Ending balance (in shares) at Jun. 30, 2021 | 74,507,853 | ||||
Ending balance at Jun. 30, 2021 | 917,419,000 | $ 75,000 | 1,688,223,000 | (763,267,000) | (7,612,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (429,000) | $ 171,486 | (429,000) | ||
Exercise of stock options (in shares) | 70,262 | ||||
Exercise of stock options | 1,831,000 | 1,831,000 | |||
Stock-based compensation expense | 25,022,000 | 25,022,000 | |||
Net loss | (60,110,000) | (60,110,000) | |||
Foreign currency translation adjustment | $ (4,268,000) | (4,268,000) | |||
Ending balance (in shares) at Sep. 30, 2021 | 74,749,601 | 74,749,601 | |||
Ending balance at Sep. 30, 2021 | $ 879,465,000 | $ 75,000 | $ 1,714,647,000 | $ (823,377,000) | $ (11,880,000) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (127,505) | $ (178,827) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Non-cash interest expense | 28,278 | 13,161 |
Depreciation and amortization expense | 77,577 | 71,406 |
Stock-based compensation expense | 74,745 | 63,962 |
Non-cash lease expense | 13,518 | 11,181 |
Loss on sublease | 0 | |
Provision for credit losses | 5,712 | 2,703 |
Loss on debt extinguishment | 1,101 | 11,671 |
Gain on sale of investment | (27,762) | 0 |
Changes in operating assets and liabilities, net of assets and liabilities acquired: | ||
Accounts receivable, net | (54,689) | (65,095) |
Prepaid expenses and other assets | (31,237) | (14,982) |
Accounts payable and accrued expenses | 24,249 | 38,018 |
Deferred revenue | 21,960 | 43,138 |
Other liabilities, net | (16,028) | (5,680) |
Other | 2,100 | 2,486 |
Net cash used in operating activities | (3,136) | (6,858) |
Cash flows from investing activities | ||
Purchase of a business, net of cash acquired | 0 | (949) |
Additions of amortizable intangible assets | (45,179) | (46,750) |
Purchases of property and equipment | (5,397) | (5,516) |
Purchase of investment | (1,000) | 0 |
Proceeds from sale of investment | 38,762 | 0 |
Advances repaid by university clients | 200 | 925 |
Other | 56 | 0 |
Net cash used in investing activities | (12,558) | (52,290) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock, net of offering costs | 0 | 299,796 |
Proceeds from debt | 469,595 | 371,681 |
Payments on debt | (2,203) | (250,479) |
Purchases of capped calls in connection with issuance of convertible senior notes | 0 | (50,540) |
Prepayment premium on extinguishment of senior secured term loan facility | 0 | (2,528) |
Payment of debt issuance costs | (10,259) | (3,419) |
Tax withholding payments associated with settlement of restricted stock units | (14,543) | (470) |
Proceeds from exercise of stock options | 6,101 | 3,123 |
Proceeds from employee stock purchase plan share purchases | 1,773 | 1,771 |
Net cash provided by financing activities | 450,464 | 368,935 |
Effect of exchange rate changes on cash | (2,312) | (92) |
Net increase in cash, cash equivalents and restricted cash | 432,458 | 309,695 |
Cash, cash equivalents and restricted cash, beginning of period | 518,866 | 189,869 |
Cash, cash equivalents and restricted cash, end of period | $ 951,324 | $ 499,564 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization 2U, Inc. (together with its subsidiaries, the “Company”) is a leading digital transformation partner for nonprofit colleges and universities. The Company builds, delivers, and supports more than 550 digital and in-person educational offerings, including graduate degrees, undergraduate degrees, professional certificates, boot camps, and short courses, across the Career Curriculum Continuum. The Company has two reportable segments: the Degree Program Segment and the Alternative Credential Segment. The Company’s Degree Program Segment provides the technology and services to nonprofit colleges and universities to enable the online delivery of degree programs. Students enrolled in these programs are generally seeking an undergraduate or graduate degree of the same quality they would receive on campus. The Company’s Alternative Credential Segment provides premium online short courses and technical, skills-based boot camps through relationships with nonprofit colleges and universities. Students enrolled in these offerings are generally seeking to reskill or upskill through shorter duration, lower-priced offerings that are relevant to the needs of industry and society. On June 28, 2021, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with edX Inc., a Massachusetts nonprofit corporation (“edX”) and Circuit Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of edX (“edX Sub”), pursuant to which the Company agreed to acquire edX Sub (the “edX Acquisition”). Pursuant to the Purchase Agreement, edX will contribute substantially all of its assets to edX Sub effective immediately prior to the closing (the “Contribution”), and the Company will purchase from edX 100% of the outstanding membership interests of edX Sub (the “Membership Interests”). The purchase price for the Membership Interests will be $800 million, subject to customary adjustments based on, among other things, the amount of cash, debt, transaction expenses and working capital of edX and edX Sub at the closing date. The Purchase Agreement contains customary representations, warranties and covenants by edX Sub, the Company, and edX. The completion of the transaction is subject to receipt of required regulatory and governmental approvals, including the expiration or termination of the waiting period applicable to the transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), and certain other customary closing conditions. The applicable waiting period under the HSR Act expired on August 12, 2021 and the other required governmental approvals were obtained in early November 2021. The transaction does not require approval of the Company’s stockholders and is not subject to any financing contingency. The Purchase Agreement may be terminated under certain circumstances, including by the Company or edX if the transaction has not been completed by June 28, 2022. The Company currently anticipates that the edX Acquisition will be completed before the end of 2021. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements, which include the assets, liabilities, results of operations and cash flows of the Company 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 Exchange Act of 1934, as amended (the “Exchange Act”), for financial statements required to be filed with the Securities and Exchange Commission (the “SEC”). 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 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 and nine months ended September 30, 2021 and 2020 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, 2020. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2020 was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP on an annual reporting basis. Use of Estimates The preparation of 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. Significant items subject to such estimates include, but are not limited to, the measurement of provisions for credit losses, acquired intangible assets, the recoverability of goodwill, deferred tax assets, and the fair value of the convertible senior notes. Due to the inherent uncertainty involved in making estimates, particularly in light of the COVID-19 pandemic, 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. Recent Accounting Pronouncements In October 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-10, Codification Improvements . The amendments in this ASU affect a wide variety of topics in the Accounting Standards Codification (“ASC”) by either clarifying the codification or correcting unintended application of guidance. The amendments do not change U.S. GAAP and, therefore, are not expected to result in a significant change in current accounting practice. The Company adopted this ASU on January 1, 2021. Adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts indexed to and potentially settled in an entity’s own equity. The new guidance eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. As a result, in more cases, convertible debt will be accounted for as a single instrument. The guidance also removes certain conditions for equity classification related to contracts in an entity’s own equity and requires the application of the if-converted method for calculating diluted earnings per share. This ASU is effective for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is evaluating the impact that this ASU will have on its condensed consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU is intended to provide optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, to ease the potential accounting and financial reporting burden associated with the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU may be applied as of the beginning of any interim period that includes its effective date (i.e., March 12, 2020) through December 31, 2022. The Company will adopt this standard when LIBOR is discontinued and does not expect the adoption of this standard to have a material impact on its condensed consolidated financial statements and related disclosures. In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 . This ASU was issued to clarify the interaction of the accounting for equity securities under ASC 321 and investments accounted for under the equity method of accounting in ASC 323 and the accounting for certain forward contracts and purchased options accounted for under ASC 815. With respect to the interactions between ASC 321 and ASC 323, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting when applying the measurement alternative in ASC 321, immediately before applying or discontinuing the equity method of accounting. The Company adopted this ASU on January 1, 2021. Adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Goodwill and Amortizable Intang
Goodwill and Amortizable Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Amortizable Intangible Assets | Goodwill and Amortizable Intangible Assets The following table presents the changes in the carrying amount of goodwill by reportable segment on the Company’s condensed consolidated balance sheets for the periods indicated. Degree Program Segment Alternative Total (in thousands) Balance as of December 31, 2020 $ — $ 415,830 $ 415,830 Foreign currency translation adjustments — (1,826) (1,826) Balance as of September 30, 2021 $ — $ 414,004 $ 414,004 The carrying amount of goodwill in the Alternative Credential Segment included accumulated impairment charges of $70.4 million as of both September 30, 2021 and December 31, 2020. The following table presents the components of amortizable intangible assets, net on the Company’s condensed consolidated balance sheets as of each of the dates indicated. September 30, 2021 December 31, 2020 Estimated Gross Accumulated Net Gross Accumulated Net (in thousands) Capitalized technology 3-5 $ 180,071 $ (103,163) $ 76,908 $ 165,254 $ (75,822) $ 89,432 Capitalized content development 4-5 235,268 (113,111) 122,157 208,170 (88,168) 120,002 University client relationships 9-10 108,816 (31,475) 77,341 109,498 (23,376) 86,122 Trade names and domain names 5-10 27,193 (12,172) 15,021 26,697 (9,483) 17,214 Total amortizable intangible assets, net $ 551,348 $ (259,921) $ 291,427 $ 509,619 $ (196,849) $ 312,770 The amounts presented in the table above include $44.5 million and $38.6 million of in-process capitalized technology and content development as of September 30, 2021 and December 31, 2020, respectively. The Company recorded amortization expense related to amortizable intangible assets of $23.2 million and $20.8 million for the three months ended September 30, 2021 and 2020, respectively. The Company recorded amortization expense related to amortizable intangible assets of $68.0 million and $61.8 million for the nine months ended September 30, 2021 and 2020, respectively. The following table presents the estimated future amortization expense of the Company’s amortizable intangible assets placed in service as of September 30, 2021. Future Amortization Expense (in thousands) Remainder of 2021 $ 22,758 2022 70,835 2023 62,023 2024 37,193 2025 20,471 Thereafter 32,913 Total $ 246,193 |
Accrued and Deferred Expenses
Accrued and Deferred Expenses | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued and Deferred Expenses | Accrued and Deferred Expenses The following table presents the components of accounts payable and accrued expenses on the Company’s condensed consolidated balance sheets as of each of the dates indicated. September 30, 2021 December 31, 2020 (in thousands) Accrued university and instructional staff compensation $ 25,123 $ 27,371 Accrued marketing expenses 44,701 24,682 Accrued transaction, integration and restructuring-related expenses 3,506 3,492 Accrued compensation and related benefits 40,793 52,820 Accounts payable and other accrued expenses 40,993 22,309 Total accounts payable and accrued expenses $ 155,116 $ 130,674 For the three and nine months ended September 30, 2021 and 2020, expense related to the Company’s marketing and advertising efforts of its own brand were not material. In response to COVID-19, various government programs have been announced to provide financial relief for affected businesses. Under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted in the United States on March 27, 2020, the Company is allowed to defer payment of the employer’s share of Social Security taxes incurred from March 27, 2020 through December 31, 2020. In addition, the CARES Act provides eligible employers with an employee retention tax credit for employees whose services were impacted by COVID-19. The amount of payroll taxes subject to deferred payment, net of employee retention tax credits, is approximately $11.3 million. This total deferred amount is payable in equal installments, with 50% due by December 31, 2021 and the remainder due by December 31, 2022. As of September 30, 2021 and December 31, 2020, the Company had balances of $6.5 million and $6.3 million, respectively, of deferred expenses incurred to integrate the software associated with its cloud computing arrangements, within other assets, non-current on the condensed consolidated balance sheets. Such expenses are subject to amortization over the remaining contractual term of the associated cloud computing arrangement, with a useful life of between three |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Contingencies The Company is involved in various claims and legal proceedings arising in the ordinary course of business. The Company accrues a liability when a loss is considered probable and the amount can be reasonably estimated. While the Company does not expect that the ultimate resolution of any existing claims and proceedings (other than the specific matters described below, if decided adversely), individually or in the aggregate, will have a material adverse effect on its financial position, an unfavorable outcome in some or all of these proceedings could have a material adverse impact on the results of operations or cash flows for a particular period. This assessment is based on the Company’s current understanding of relevant facts and circumstances. With respect to current legal proceedings, the Company does not believe it is probable a material loss exceeding amounts already recognized has been incurred as of the date of the balance sheets presented herein. As such, the Company’s view of these matters is subject to inherent uncertainties and may change in the future. In re 2U, Inc., Securities Class Action On August 7 and 9, 2019, Aaron Harper and Anne M. Chinn filed putative class action complaints against the Company, Christopher J. Paucek, the Company’s CEO, and Catherine A. Graham, the Company’s former CFO, in the United States District Court for the Southern District of New York, alleging violations of Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder, based upon allegedly false and misleading statements regarding the Company’s business prospects and financial projections. The district court transferred the cases to the United States District Court for the District of Maryland, consolidated them under docket number 8:19-cv-3455 (D. Md.), and appointed Fiyyaz Pirani as the lead plaintiff in the consolidated action. On July 30, 2020, Mr. Pirani filed a consolidated class action complaint (“CAC”), adding Harsha Mokkarala, the Company’s former Chief Marketing Officer, as a defendant. The CAC also asserts claims under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended, against Mr. Paucek, Ms. Graham, members of the Company’s board of directors, and the Company’s underwriters, based on allegations related to the Company’s secondary stock offering on May 23, 2018. The proposed class consists of all persons who acquired the Company’s securities between February 26, 2018 and July 30, 2019. On October 27, 2020, defendants filed a motion to dismiss. On August 5, 2021, the court largely denied the defendants’ motion to dismiss, and the remaining claims are proceeding in discovery. The Company believes that the claims are without merit, and it intends to vigorously defend against these claims. However, due to the complex nature of the legal and factual issues involved, the outcome of this matter is not presently determinable. Stockholder Derivative Suits On April 30, 2020, Richard Theis filed a stockholder derivative complaint purportedly on behalf of the Company and against Christopher J. Paucek, the Company’s CEO, Catherine A. Graham, the Company’s former CFO, and the Company’s board of directors in the United States District Court for the Southern District of New York, with docket number 20-cv-3360. The complaint alleges claims for breaches of fiduciary duty, insider sales and misappropriation of information, unjust enrichment, and violations of Section 14(a) of the Exchange Act, based upon allegedly false and misleading statements regarding the Company’s business prospects and financial projections. On July 22, 2020, the court entered a joint stipulation staying the case pending resolution of the securities class action. Due to the complex nature of the legal and factual issues involved, the outcome of this matter is not presently determinable. On August 21, 2020, Thomas Lucey filed a stockholder derivative complaint purportedly on behalf of the Company and against Christopher J. Paucek, the Company’s CEO, Catherine A. Graham, the Company’s former CFO, Harsha Mokkarala, the Company’s former Chief Marketing Officer and the Company’s board of directors in the United States District Court for the District of Maryland, with docket number 1:20-cv-02424-GLR. The complaint alleges claims for breaches of fiduciary duty, insider trading, and contribution for alleged violations of Sections 10(b) and 21D of the Exchange Act, based upon allegedly false and misleading statements regarding the Company’s business prospects and financial projections. On September 3, 2020, the court entered a joint stipulation staying the case pending resolution of the securities class action. Due to the complex nature of the legal and factual issues involved, the outcome of this matter is not presently determinable. On November 30, 2020, Leo Shumacher filed a stockholder derivative complaint purportedly on behalf of the Company and against Christopher J. Paucek, the Company’s CEO, Catherine A. Graham, the Company’s former CFO, Harsha Mokkarala, the Company’s former Chief Marketing Officer, and the Company’s board of directors in the Court of Chancery of the State of Delaware, with docket number 2020-1019-AGB. The complaint alleges claims for breaches of fiduciary duty and unjust enrichment, based upon allegedly false and misleading statements regarding the Company’s business prospects and financial projections. On January 6, 2021, the court entered a joint stipulation staying the case pending resolution of the securities class action. Due to the complex nature of the legal and factual issues involved, the outcome of this matter is not presently determinable. Marketing and Sales Commitments Certain agreements entered into between the Company and its university clients in the Degree Program Segment require the Company to commit to meet certain staffing and spending investment thresholds related to marketing and sales activities. In addition, certain agreements in the Degree Program Segment 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 Pursuant to certain of the Company’s contracts in the Degree Program Segment, the Company has made, or is obligated to make, payments to university clients in exchange for contract extensions and various marketing and other rights. As of September 30, 2021, the future minimum payments due to university clients have 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, 2020. Contingent Payments The Company has entered into agreements with certain of its university clients in the Degree Program Segment that require the Company to make future minimum payments in the event that certain program metrics are not achieved on an annual basis. The Company recognizes any estimated contingent payments under these agreements as contra revenue over the period to which they relate, and records a liability in other current liabilities on the condensed consolidated balance sheets. In the first quarter of 2019, the Company entered into an agreement to make investments in an education technology company of up to $15.0 million, upon demand by the investee. During the second quarter of 2021, the Company sold its investment in this education technology company and was released from any further obligation to make additional investments. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company leases facilities under non-cancellable operating leases primarily in the United States, South Africa, the United Kingdom and Canada. The Company’s operating leases have remaining lease terms of between less than one The following table presents the components of lease expense on the Company’s condensed consolidated statements of operations and comprehensive loss for each of the periods indicated. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Operating lease expense $ 4,897 $ 3,848 $ 13,524 $ 11,189 Short-term lease expense 66 50 120 284 Variable lease expense 1,713 1,603 4,742 4,274 Sublease income (155) — (265) — Total lease expense $ 6,521 $ 5,501 $ 18,121 $ 15,747 As of September 30, 2021, for the Company’s operating leases, the weighted-average remaining lease term was 8.1 years and the weighted-average discount rate was 11.3%. For the nine months ended September 30, 2021 and 2020, cash paid for amounts included in the measurement of operating lease liabilities was $16.5 million and $12.7 million, respectively. The following table presents the maturities of the Company’s operating lease liabilities as of the date indicated, and excludes the impact of future sublease income totaling $4.4 million in aggregate. September 30, 2021 (in thousands) Remainder of 2021 $ 5,583 2022 21,869 2023 21,892 2024 21,732 2025 17,958 Thereafter 91,138 Total lease payments 180,172 Less: imputed interest (65,905) Total lease liability $ 114,267 As of September 30, 2021, the Company had no additional operating leases that have not yet commenced. In August 2021, the Company entered into an agreement with an unrelated party to sublease a portion of the Company’s office space in Denver, Colorado, as part of its overall real estate management strategy. As of September 30, 2021, this sublease was classified as an operating lease and had a remaining term of 3.2 years with scheduled annual rent increases and no option to extend or renew the sublease term. Sublease income is recognized on a straight-line basis over the sublease term as a reduction to expense incurred by the Company under the associated master lease. In connection with the execution of this agreement, the Company recognized a non-cash loss on sublease of $4.8 million in the third quarter of 2021. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table presents the components of outstanding long-term debt on the Company’s condensed consolidated balance sheets as of each of the dates indicated. September 30, 2021 December 31, 2020 (in thousands) Term loan facilities $ 473,813 $ — Convertible senior notes 380,000 380,000 Deferred government grant obligations 3,500 3,500 Other borrowings 3,254 1,343 Less: unamortized debt discount and issuance costs (111,689) (111,043) Total debt 748,878 273,800 Less: current portion of long-term debt (6,109) (627) Total long-term debt $ 742,769 $ 273,173 The Company believes the carrying value of its long-term debt approximates the fair value of the debt as the terms and interest rates approximate the market rates, other than the 2.25% convertible senior notes due 2025 (the “Notes”), which had an estimated fair value of $528.7 million and $616.6 million as of September 30, 2021 and December 31, 2020, respectively. Each of the Company’s long-term debt instruments were classified as Level 2 within the fair value hierarchy. Term Loan Credit and Guaranty Agreement The Company entered into a Term Loan Credit and Guaranty Agreement, dated June 28, 2021 (the “Term Loan Agreement”), among the Company, as borrower, the subsidiaries of the Company party thereto, as guarantors, the lenders party thereto, and Alter Domus (US) LLC as administrative agent and collateral agent. Pursuant to the Term Loan Agreement, the lenders thereunder made term loans to the Company on June 29, 2021 (the “Funding Date”) in the aggregate principal amount of $475 million (the “Term Loan Facilities”). The Term Loan Facilities have an initial maturity date of December 28, 2024 (the “Maturity Date”). Commencing on the Funding Date, loans under the Term Loan Facilities will bear interest at a per annum rate equal to a base rate or adjusted Eurodollar rate, as applicable, plus the applicable margin of 4.75% in the case of the base rate loans and 5.75% in the case of the Eurodollar loans. The Term Loan Agreement requires the Company to make quarterly principal repayments equal to 0.25% of the $475 million aggregate principal amount, beginning September 2021. If the loans under the Term Loan Facilities are prepaid prior to the second anniversary, subject to certain customary exceptions, the Company shall pay the Applicable Premium (as defined in the Term Loan Agreement) on the amount of the loans so prepaid. The Company can repay the amount of the loans at par, plus accrued and unpaid interest, if the edX Acquisition does not close. The associated effective interest rate of the Term Loan Facilities for the three- and nine-month periods ended September 30, 2021 was approximately 7.87% and 7.88%, respectively, and the associated interest expense was approximately $9.0 million and $9.3 million, respectively. The obligations under the Term Loan Agreement are guaranteed by certain of the Company’s subsidiaries (the Company and the guarantors, collectively, the “Credit Parties”). The obligations under the Term Loan Agreement are secured, subject to customary permitted liens and other agreed-upon exceptions, by a perfected security interest in all tangible and intangible assets of the Credit Parties, except for certain customary excluded assets. The Term Loan Agreement contains customary affirmative covenants, including, among others, the provision of annual and quarterly financial statements and compliance certificates, maintenance of property, insurance, compliance with laws and environmental matters. The Term Loan Agreement contains customary negative covenants, including, among others, restrictions on the incurrence of indebtedness, granting of liens, making investments and acquisitions, paying dividends, repurchases of equity interests in the Company and entering into affiliate transactions and asset sales. The Term Loan Agreement contains a financial covenant that requires the Company to maintain minimum Recurring Revenues (as defined in the Term Loan Agreement) as of the last day of any period of four consecutive fiscal quarters of the Company commencing with fiscal quarter ending September 30, 2021 through the Maturity Date. The Term Loan Agreement also provides for customary events of default, including, among others: non-payment of obligations; bankruptcy or insolvency event; failure to comply with covenants; breach of representations or warranties; defaults on other material indebtedness; impairment of any lien on any material portion of the Collateral (as defined in the Term Loan Agreement); failure of any material provision of the Term Loan Agreement or any guaranty to remain in full force and effect; a change of control of the Company; and material judgment defaults. The occurrence of an event of default could result in the acceleration of obligations under the Term Loan Agreement. If an event of default under the Term Loan Agreement occurs and is continuing, then, at the request (or with the consent) of the lenders holding a majority of the commitments and loans under the Term Loan Agreement, upon notice by the administrative agent to the borrowers, the obligations under the Term Loan Agreement shall become immediately due and payable. In addition, if the Credit Parties become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Term Loan Agreement will automatically become immediately due and payable. In connection with entering into the Term Loan Agreement in June 2021, the Company terminated its $50 million credit agreement, dated June 25, 2020, and recognized a loss on debt extinguishment of $1.1 million in connection with the write-off of previously capitalized deferred financing costs and associated fees. On November 4, 2021, the Company entered into a First Amendment to Term Loan Credit and Guaranty Agreement and a Joinder Agreement, which amended the Term Loan Agreement (collectively, the “Amended Term Loan Facility”) primarily to provide for an incremental facility to the Company in an original principal amount of $100 million. The Company is required to make quarterly principal repayments equal to 0.25% of this original principal amount beginning in December 2021. The proceeds of the Amended Term Loan Facility may be used for general corporate purposes. Convertible Senior Notes In April 2020, the Company issued the Notes in an aggregate principal amount of $380 million, including the exercise by the initial purchasers of an option to purchase additional Notes, in a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. The net proceeds from the offering of the Notes were approximately $369.6 million after deducting the initial purchasers’ discounts, commissions and offering expenses payable by the Company. The Notes are governed by an indenture (the “Indenture”) between the Company and Wilmington Trust, National Association, as trustee. The Notes bear interest at a rate of 2.25% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2020. The Notes will mature on May 1, 2025, unless earlier repurchased, redeemed or converted. The interest expense related to the Notes for the three months ended September 30, 2021 and 2020, including amortization of the debt discount and debt issuance costs, was $7.8 million and $7.3 million, respectively. The interest expense related to the Notes for the nine months ended September 30, 2021 and 2020, including amortization of the debt discount and debt issuance costs, was $23.0 million and $12.3 million, respectively. The associated effective interest rate of the Notes for the three months ended September 30, 2021 and 2020 was approximately 10.9% and 11.2%, respectively. The associated effective interest rate of the Notes for the nine months ended September 30, 2021 and 2020 was approximately 11.1% and 10.8%, respectively. The Notes are the senior, unsecured obligations of the Company and are equal in right of payment with the Company’s senior unsecured indebtedness, senior in right of payment to the Company’s indebtedness that is expressly subordinated to the Notes, effectively subordinated to the Company’s senior secured indebtedness (including indebtedness under the Term Loan Facilities), to the extent of the value of the collateral securing that indebtedness, and structurally subordinated to all indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated using a discount rate of 10.3%, which was determined by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option, excluding debt issuance costs, was $117.8 million and was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The Company allocated debt issuance costs of $7.2 million and $3.2 million to the debt and equity components, respectively. The excess of the principal amount of the liability component over its carrying amount, inclusive of debt issuance costs, represents the debt discount, which is amortized to interest expense at an annual effective interest rate over the contractual term of the Notes. As of September 30, 2021 and December 31, 2020, the unamortized debt discount was $94.5 million and $111.0 million, respectively. Holders may convert their Notes at their option in the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock, exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; • during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; • upon the occurrence of certain corporate events or distributions on the Company’s common stock, as provided in the Indenture; • if the Company calls such Notes for redemption; and • at any time from, and including, November 1, 2024 until the close of business on the second scheduled trading day immediately before the maturity date. The initial conversion rate for the Notes is 35.3773 shares of the Company’s common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $28.27 per share of the Company’s common stock, and is subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture. Upon conversion, the Company will pay or deliver, as applicable, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. In the event of the Company calling the Notes for redemption or the holders of the Notes electing to convert their Notes, the Company will determine whether to settle in cash, common stock or a combination thereof. Upon the occurrence of a “make-whole fundamental change” (as defined in the Indenture), the Company will in certain circumstances increase the conversion rate for a specified period of time. In addition, upon the occurrence of a “fundamental change” (as defined in the Indenture), holders of the Notes may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any. The Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after May 5, 2023 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice, and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any Note for redemption will constitute a “make-whole fundamental change” with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if such Note is converted after it is called for redemption. No sinking fund is provided for the Notes. As of September 30, 2021, the Notes are not convertible between October 1, 2021 and December 31, 2021, as the common stock sale price condition was not met. In connection with the Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain counterparties. The Capped Call Transactions are generally expected to reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the Capped Call Transactions. The cap price of the Capped Call Transactions is initially $44.34 per share. The cost of the Capped Call Transactions was approximately $50.5 million. In April 2020, the Company used a portion of the proceeds from the sale of the Notes to repay in full all amounts outstanding, and discharge all obligations in respect of, the $250 million senior secured term loan facility. The Company intends to use the remaining net proceeds from the sale of the Notes for working capital or other general corporate purposes, which may include capital expenditures, potential acquisitions and strategic transactions. Deferred Government Grant Obligations The Company has a total of two outstanding conditional loan agreements with Prince George’s County, Maryland and the State of Maryland 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 the Company attains certain conditions related to employment levels at 2U’s Lanham, Maryland headquarters. The conditional loan with Prince George’s County has a maturity date of June 22, 2027. In January 2021, the Company amended its conditional loan agreement with the State of Maryland to modify the terms of the employment level thresholds and extend the maturity date to June 30, 2028. The interest expense related to these loans for the three and nine months ended September 30, 2021 and 2020 was immaterial. As of September 30, 2021 and December 31, 2020, the Company’s combined accrued interest balance associated with the deferred government grant obligations was $0.5 million and $0.4 million, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s income tax provisions for all periods consist of federal, state and foreign income taxes. The income tax provisions for the three and nine months ended September 30, 2021 and 2020 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 for each of the three- and nine-month periods ended September 30, 2021 and 2020 was less than 1%. The Company’s income tax benefit for the nine months ended September 30, 2021 and 2020 was $0.4 million and $1.6 million, respectively, and related to losses generated by operations and the amortization of acquired intangibles in the Alternative Credential Segment that are expected to be realized through future reversing taxable temporary differences. To date, the Company has not been required to pay U.S. federal income taxes because of current and accumulated net operating losses. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock As of September 30, 2021, 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 September 30, 2021, there were 74,749,601 shares of common stock outstanding, and the Company had reserved a total of 24,918,492 of its authorized shares of common stock for future issuance as follows: Shares Reserved for Future Issuance Outstanding restricted stock units 2,681,579 Outstanding performance restricted stock units 1,558,149 Outstanding stock options 3,538,522 Reserved for convertible senior notes 17,140,242 Total shares of common stock reserved for future issuance 24,918,492 On August 6, 2020, the Company sold 6,800,000 shares of the Company’s common stock to the public. The Company received net proceeds of $299.8 million, which the Company intends to use for working capital and other general corporate purposes, which may include capital expenditures, potential acquisitions, growth opportunities and strategic transactions. Stock-Based Compensation The Company maintains two stock-based compensation plans: the Amended and Restated 2014 Equity Incentive Plan (the “2014 Plan”) and the 2008 Stock Incentive Plan (the “2008 Plan” and together with the 2014 Plan, the “Stock Plans”). Upon the effective date of the 2014 Plan in January 2014, the Company ceased using the 2008 Plan to grant new equity awards. The shares available for future issuance under the 2014 Plan increased by 3,619,344 and 3,175,011 on January 1, 2021 and 2020, respectively, pursuant to the automatic share reserve increase provision in the 2014 Plan. The Company also has a 2017 Employee Stock Purchase Plan (the “ESPP”). During the nine months ended September 30, 2021, an aggregate of 50,406 shares of the Company’s common stock were purchased in accordance with the ESPP. Net proceeds from the issuance of these shares was $1.8 million. As of September 30, 2021, 615,988 shares remained available for purchase under the ESPP. The following table presents stock-based compensation expense related to the Stock Plans and the ESPP, contained on the following line items on the Company’s condensed consolidated statements of operations and comprehensive loss for each of the periods indicated. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Curriculum and teaching $ 18 $ 21 $ 51 $ 212 Servicing and support 3,856 3,409 11,669 10,979 Technology and content development 3,334 3,059 9,703 9,164 Marketing and sales 1,811 1,618 4,984 6,704 General and administrative 16,003 13,894 48,338 36,903 Total stock-based compensation expense $ 25,022 $ 22,001 $ 74,745 $ 63,962 Restricted Stock Units The 2014 Plan provides for the issuance of restricted stock units (“RSUs”) to eligible participants. RSUs generally vest over a three Number of Weighted- Outstanding balance as of December 31, 2020 3,010,019 $ 29.41 Granted 1,104,174 40.35 Vested (1,144,918) 33.24 Forfeited (287,696) 30.40 Outstanding balance as of September 30, 2021 2,681,579 $ 32.17 The total compensation expense related to the unvested RSUs not yet recognized as of September 30, 2021 was $62.6 million, and will be recognized over a weighted-average period of approximately 1.5 years. Performance Restricted Stock Units The 2014 Plan allows for the grant of performance restricted stock units (“PRSUs”) to eligible participants. The right to earn the PRSUs is subject to achievement of the defined performance metrics and continuous employment service. The performance metrics are defined and approved by the compensation committee of our board of directors. Earned PRSUs may be subject to additional time-based vesting. During the first quarter of 2021, the PRSU awards granted as part of the Company’s 2020 annual equity award cycle with a performance period that began on January 1, 2020 and ended on December 31, 2020, vested at 200% of target. The following tables present a summary of (i) the assumptions used for estimating the fair values of the PRSUs subject to market-based vesting conditions and (ii) the Company’s PRSU activity for the period indicated. As of September 30, 2021 and December 31, 2020, there were 0.9 million and 1.3 million outstanding PRSUs for which the performance metrics had not been defined as of each respective date. Accordingly, such awards are not considered granted for accounting purposes as of September 30, 2021 and December 31, 2020, and have been excluded from the tables below. Three Months Ended Nine Months Ended 2021 2020 2021 2020 Risk-free interest rate — — 0.10% – 0.26% 1.51% Expected term (years) — — 1.00 – 3.00 1.00 Expected volatility — — 85% – 89% 75% Dividend yield — — 0% 0% Weighted-average grant date fair value per share — — $61.33 $22.45 Number of Weighted- Outstanding balance as of December 31, 2020 1,355,296 $ 23.51 Granted 1,577,721 44.73 Vested (1,192,596) 22.47 Forfeited (182,272) 41.31 Outstanding balance as of September 30, 2021 1,558,149 $ 43.71 The total compensation expense related to the unvested PRSUs not yet recognized as of September 30, 2021 was $24.3 million, and will be recognized over a weighted-average period of approximately 0.9 years. Stock Options The Stock Plans provide for the issuance of stock options to eligible participants. Stock options issued under the Stock Plans generally are exercisable for periods not to exceed 10 years and generally vest over four years. The following table summarizes the assumptions used for estimating the fair value of the stock options granted for the period presented. Three Months Ended Nine Months Ended 2021 2020 2021 2020 Risk-free interest rate — — — 1.5% Expected term (years) — — — 6.04 Expected volatility — — — 64% Dividend yield — — — 0% Weighted-average grant date fair value per share — — — $11.48 The following table presents a summary of the Company’s stock option activity for the period indicated. Number of Weighted-Average Weighted-Average Aggregate Outstanding balance as of December 31, 2020 3,916,867 $ 35.63 5.08 $ 59,906 Granted — Exercised (280,241) 21.77 1.80 Forfeited (52,640) 54.10 Expired (45,464) 68.56 Outstanding balance as of September 30, 2021 3,538,522 36.03 4.30 41,267 Exercisable as of September 30, 2021 3,144,706 $ 31.68 3.94 $ 40,938 The aggregate intrinsic value of options exercised during the nine months ended September 30, 2021 and 2020 was $6.3 million and $6.8 million, respectively. The total compensation expense related to the unvested options not yet recognized as of September 30, 2021 was $11.5 million, and will be recognized over a weighted-average period of approximately 1.9 years. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | 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 each of the periods indicated. Three and Nine Months Ended 2021 2020 Stock options 3,538,522 4,023,741 Restricted stock units 2,681,579 3,431,829 Performance restricted stock units 1,558,149 1,760,164 Shares related to convertible senior notes 13,443,374 3,432,837 Total antidilutive securities 21,221,624 12,648,571 The following table presents the calculation of the Company’s basic and diluted net loss per share for each of the periods indicated. Three Months Ended Nine Months Ended 2021 2020 2021 2020 Numerator (in thousands): Net loss $ (60,110) $ (52,554) $ (127,505) $ (178,827) Denominator: Weighted-average shares of common stock outstanding, basic and diluted 74,691,521 68,580,439 74,266,999 66,368,686 Net loss per share, basic and diluted $ (0.80) $ (0.77) $ (1.72) $ (2.69) |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The Company has two reportable segments: the Degree Program Segment and the Alternative Credential Segment. The Company’s reportable segments are determined based on (i) financial information reviewed by the chief operating decision maker, the Chief Executive Officer (“CEO”), (ii) internal management and related reporting structure, and (iii) the basis upon which the CEO makes resource allocation decisions. The Company’s Degree Program Segment includes the technology and services provided to nonprofit colleges and universities to enable the online delivery of degree programs. The Company’s Alternative Credential Segment includes the premium online short courses and technical skills-based boot camps provided through relationships with nonprofit colleges and universities. Significant Customers For the three months ended September 30, 2021, no university clients accounted for 10% or more of the Company’s consolidated revenue. For the three months ended September 30, 2020, one university client in the Degree Program Segment accounted for 10% or more of the Company’s consolidated revenue, contributing $19.3 million, or approximately 10% of the Company’s consolidated revenue. For the nine months ended September 30, 2021, no university clients accounted for 10% or more of the Company’s consolidated revenue. For the nine months ended September 30, 2020, one university client in the Degree Program Segment accounted for 10% or more of the Company’s consolidated revenue, contributing $55.5 million, or approximately 10% of the Company’s consolidated revenue. As of September 30, 2021, one university client in the Degree Program Segment accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, with $14.9 million, or approximately 16% of the Company’s consolidated accounts receivable, net balance. As of December 31, 2020, two university clients in the Degree Program Segment each accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, with $5.8 million and $5.2 million, or approximately 12% and 11% of the Company’s consolidated accounts receivable, net balance, respectively. Segment Performance The following table presents financial information regarding each of the Company’s reportable segment’s results of operations for each of the periods indicated. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (dollars in thousands) Revenue by segment* Degree Program Segment $ 147,795 $ 122,036 $ 439,884 $ 356,178 Alternative Credential Segment 84,581 79,037 262,174 203,061 Total revenue $ 232,376 $ 201,073 $ 702,058 $ 559,239 Segment profitability** Degree Program Segment $ 32,925 $ 9,713 $ 86,786 $ 20,876 Alternative Credential Segment (18,185) (6,001) (41,186) (23,555) Total segment profitability $ 14,740 $ 3,712 $ 45,600 $ (2,679) Segment profitability margin*** Degree Program Segment 22.3 % 8.0 % 19.7 % 5.9 % Alternative Credential Segment (21.5) (7.6) (15.7) (11.6) Total segment profitability margin 6.4 % 1.8 % 6.5 % (0.5) % * The Company has excluded immaterial amounts of intersegment revenues from the three- and nine-month periods ended September 30, 2021 and 2020. ** The Company defines segment profitability as net income or net loss, as applicable, before net interest income (expense), other income (expense), net, taxes, depreciation and amortization expense, deferred revenue fair value adjustments, transaction costs, integration costs, restructuring-related costs, stockholder activism costs, certain litigation-related costs, consisting of fees for certain non-ordinary course litigation and other proceedings, impairment charges, losses on debt extinguishment, 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 the respective segment’s revenue. The following table presents a reconciliation of the Company’s total segment profitability to net loss for each of the periods indicated. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Net loss $ (60,110) $ (52,554) $ (127,505) $ (178,827) Adjustments: Stock-based compensation expense 25,022 22,001 74,745 63,962 Other (income) expense, net 425 (42) (22,730) 1,659 Net interest expense 16,471 6,851 31,826 18,195 Income tax benefit (319) (162) (448) (1,580) Depreciation and amortization expense 26,168 23,936 77,577 71,406 Loss on debt extinguishment — — 1,101 11,671 Other* 7,083 3,682 11,034 10,835 Total adjustments 74,850 56,266 173,105 176,148 Total segment profitability $ 14,740 $ 3,712 $ 45,600 $ (2,679) * Includes (i) transaction and integration expense of $0.8 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively, and $2.6 million and $1.5 million for the nine months ended September 30, 2021 and 2020, respectively, (ii) restructuring-related expense of $5.4 million and $2.7 million for the three months ended September 30, 2021 and 2020, respectively, and $7.2 million and $3.2 million for the nine months ended September 30, 2021 and 2020, respectively, and (iii) stockholder activism and litigation-related expense of $0.8 million and $0.6 million for the three months ended September 30, 2021 and 2020, respectively, and $1.2 million and $6.2 million for the nine months ended September 30, 2021 and 2020, respectively. The following table presents the Company’s total assets by segment as of each of the dates indicated. September 30, December 31, (in thousands) Total assets Degree Program Segment $ 1,303,115 $ 830,706 Alternative Credential Segment 730,367 713,558 Total assets $ 2,033,482 $ 1,544,264 Geographical Information The Company’s non-U.S. revenue is based on the currency of the country in which the university client primarily operates. The Company’s non-U.S. revenue was $24.7 million and $19.7 million for the three months ended September 30, 2021 and 2020, respectively. The Company’s non-U.S. revenue was $74.1 million and $49.2 million for the nine months ended September 30, 2021 and 2020, respectively. Substantially all of the Company’s non-U.S. revenue for each of the aforementioned periods was sourced from the Alternative Credential Segment’s operations outside of the U.S. The Company’s long-lived tangible assets in non-U.S. countries as of September 30, 2021 and December 31, 2020 totaled approximately $2.3 million and $1.6 million, respectively. |
Receivables and Contract Liabil
Receivables and Contract Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Receivables and Contract Liabilities | Receivables and Contract Liabilities The Company has trade receivables and receivables with extended payment plans. Trade receivable balances relate to students or customers occurring in the normal course of business. Trade receivable balances have a term of less than one year and are included in accounts receivable, net on the Company’s condensed consolidated balance sheets. The receivables with extended payment plans relate to students who take advantage of extended payment plans of the Company’s alternative credential offerings. These payment plans, which are managed and serviced by third-party providers, are designed to assist students with paying tuition costs after all other student financial assistance and scholarships have been applied. The associated receivables generally have payment terms that exceed one year and are recorded net of any implied pricing concessions, which are determined based on collections history, market data and any time value of money component. There are no fees or origination costs included in these receivables. The carrying value of these receivable balances approximate their fair value and are recorded on the Company’s condensed consolidated balance sheets within other assets. Trade Accounts Receivable and Contract Liabilities The following table presents the Company’s trade accounts receivable and contract liabilities in each segment as of each of the dates indicated. September 30, December 31, (in thousands) Trade accounts receivable Degree Program Segment accounts receivable $ 24,927 $ 16,424 Degree Program Segment unbilled revenue 43,602 6,072 Alternative Credential Segment accounts receivable 37,805 29,717 Provision for credit losses (10,944) (5,936) Total trade accounts receivable $ 95,390 $ 46,277 Contract liabilities Degree Program Segment deferred revenue $ 11,224 $ 1,714 Alternative Credential Segment deferred revenue 85,760 73,779 Total contract liabilities $ 96,984 $ 75,493 During each of the three-month periods ended September 30, 2021 and 2020, the Company did not recognize any Degree Program Segment revenue related to its deferred revenue balances that existed at the end of each preceding year. Revenue recognized in this segment during the nine months ended September 30, 2021 and 2020 that was included in the deferred revenue balance that existed at the end of each preceding year was $1.7 million and $2.2 million, respectively. During each of the three-month periods ended September 30, 2021 and 2020, the Company did not recognize any Alternative Credential Segment revenue related to its deferred revenue balances that existed at the end of each preceding year. Revenue recognized in this segment during the nine months ended September 30, 2021 and 2020 that was included in the deferred revenue balance that existed at the end of each preceding year was $71.9 million and $46.6 million, respectively. The following table presents the change in provision for credit losses for trade receivables on the Company’s condensed consolidated balance sheets for the period indicated. Provision for Credit Losses (in thousands) Balance as of December 31, 2020 $ 6,115 Current period provision 5,712 Amounts written off — Amounts recovered (877) Foreign currency translation adjustments (6) Balance as of September 30, 2021 $ 10,944 Contract Acquisition Costs The Degree Program Segment had $0.5 million and $0.5 million of net capitalized contract acquisition costs recorded primarily within other assets, non-current on the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively. For each of the three- and nine-month periods ended September 30, 2021 and 2020, the Company capitalized an immaterial amount of contract acquisition costs and recorded an immaterial amount of associated amortization expense in the Degree Program Segment. Other Receivables The following table presents the components of the Company’s receivables with extended payment terms as of each of the dates indicated. September 30, 2021 December 31, 2020 (in thousands) Receivables, gross $ 49,993 $ 25,587 Less: provision for credit losses (899) (179) Receivables, net $ 49,094 $ 25,408 Short-term receivables $ 25,734 $ 1,076 The Company considers receivables to be past due when amounts contractually due under the extended payment plans have not been paid. As of September 30, 2021, 94% of outstanding receivables due under extended payment plans were current. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow InformationThe Company’s cash interest payments, net of amounts capitalized, were $4.5 million and $6.3 million for the nine months ended September 30, 2021 and 2020, respectively. The Company’s accrued but unpaid capital expenditures were $4.3 million and $3.1 million for the nine months ended September 30, 2021 and 2020, respectively. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements, which include the assets, liabilities, results of operations and cash flows of the Company 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 Exchange Act of 1934, as amended (the “Exchange Act”), for financial statements required to be filed with the Securities and Exchange Commission (the “SEC”). 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 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 and nine months ended September 30, 2021 and 2020 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, 2020. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of 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. Significant items subject to such estimates include, but are not limited to, the measurement of provisions for credit losses, acquired intangible assets, the recoverability of goodwill, deferred tax assets, and the fair value of the convertible senior notes. Due to the inherent uncertainty involved in making estimates, particularly in light of the COVID-19 pandemic, 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-10, Codification Improvements . The amendments in this ASU affect a wide variety of topics in the Accounting Standards Codification (“ASC”) by either clarifying the codification or correcting unintended application of guidance. The amendments do not change U.S. GAAP and, therefore, are not expected to result in a significant change in current accounting practice. The Company adopted this ASU on January 1, 2021. Adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts indexed to and potentially settled in an entity’s own equity. The new guidance eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. As a result, in more cases, convertible debt will be accounted for as a single instrument. The guidance also removes certain conditions for equity classification related to contracts in an entity’s own equity and requires the application of the if-converted method for calculating diluted earnings per share. This ASU is effective for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is evaluating the impact that this ASU will have on its condensed consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU is intended to provide optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, to ease the potential accounting and financial reporting burden associated with the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU may be applied as of the beginning of any interim period that includes its effective date (i.e., March 12, 2020) through December 31, 2022. The Company will adopt this standard when LIBOR is discontinued and does not expect the adoption of this standard to have a material impact on its condensed consolidated financial statements and related disclosures. In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 . This ASU was issued to clarify the interaction of the accounting for equity securities under ASC 321 and investments accounted for under the equity method of accounting in ASC 323 and the accounting for certain forward contracts and purchased options accounted for under ASC 815. With respect to the interactions between ASC 321 and ASC 323, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting when applying the measurement alternative in ASC 321, immediately before applying or discontinuing the equity method of accounting. The Company adopted this ASU on January 1, 2021. Adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Goodwill and Amortizable Inta_2
Goodwill and Amortizable Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The following table presents the changes in the carrying amount of goodwill by reportable segment on the Company’s condensed consolidated balance sheets for the periods indicated. Degree Program Segment Alternative Total (in thousands) Balance as of December 31, 2020 $ — $ 415,830 $ 415,830 Foreign currency translation adjustments — (1,826) (1,826) Balance as of September 30, 2021 $ — $ 414,004 $ 414,004 |
Schedule of amortizable intangible assets | The following table presents the components of amortizable intangible assets, net on the Company’s condensed consolidated balance sheets as of each of the dates indicated. September 30, 2021 December 31, 2020 Estimated Gross Accumulated Net Gross Accumulated Net (in thousands) Capitalized technology 3-5 $ 180,071 $ (103,163) $ 76,908 $ 165,254 $ (75,822) $ 89,432 Capitalized content development 4-5 235,268 (113,111) 122,157 208,170 (88,168) 120,002 University client relationships 9-10 108,816 (31,475) 77,341 109,498 (23,376) 86,122 Trade names and domain names 5-10 27,193 (12,172) 15,021 26,697 (9,483) 17,214 Total amortizable intangible assets, net $ 551,348 $ (259,921) $ 291,427 $ 509,619 $ (196,849) $ 312,770 |
Schedule of estimated future amortization expense for amortizable intangible assets | The following table presents the estimated future amortization expense of the Company’s amortizable intangible assets placed in service as of September 30, 2021. Future Amortization Expense (in thousands) Remainder of 2021 $ 22,758 2022 70,835 2023 62,023 2024 37,193 2025 20,471 Thereafter 32,913 Total $ 246,193 |
Accrued and Deferred Expenses (
Accrued and Deferred Expenses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | The following table presents the components of accounts payable and accrued expenses on the Company’s condensed consolidated balance sheets as of each of the dates indicated. September 30, 2021 December 31, 2020 (in thousands) Accrued university and instructional staff compensation $ 25,123 $ 27,371 Accrued marketing expenses 44,701 24,682 Accrued transaction, integration and restructuring-related expenses 3,506 3,492 Accrued compensation and related benefits 40,793 52,820 Accounts payable and other accrued expenses 40,993 22,309 Total accounts payable and accrued expenses $ 155,116 $ 130,674 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of lease cost | The following table presents the components of lease expense on the Company’s condensed consolidated statements of operations and comprehensive loss for each of the periods indicated. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Operating lease expense $ 4,897 $ 3,848 $ 13,524 $ 11,189 Short-term lease expense 66 50 120 284 Variable lease expense 1,713 1,603 4,742 4,274 Sublease income (155) — (265) — Total lease expense $ 6,521 $ 5,501 $ 18,121 $ 15,747 |
Schedule of maturities of operating lease liabilities | The following table presents the maturities of the Company’s operating lease liabilities as of the date indicated, and excludes the impact of future sublease income totaling $4.4 million in aggregate. September 30, 2021 (in thousands) Remainder of 2021 $ 5,583 2022 21,869 2023 21,892 2024 21,732 2025 17,958 Thereafter 91,138 Total lease payments 180,172 Less: imputed interest (65,905) Total lease liability $ 114,267 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | The following table presents the components of outstanding long-term debt on the Company’s condensed consolidated balance sheets as of each of the dates indicated. September 30, 2021 December 31, 2020 (in thousands) Term loan facilities $ 473,813 $ — Convertible senior notes 380,000 380,000 Deferred government grant obligations 3,500 3,500 Other borrowings 3,254 1,343 Less: unamortized debt discount and issuance costs (111,689) (111,043) Total debt 748,878 273,800 Less: current portion of long-term debt (6,109) (627) Total long-term debt $ 742,769 $ 273,173 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of shares of common stock reserved for future issuance | As of September 30, 2021, there were 74,749,601 shares of common stock outstanding, and the Company had reserved a total of 24,918,492 of its authorized shares of common stock for future issuance as follows: Shares Reserved for Future Issuance Outstanding restricted stock units 2,681,579 Outstanding performance restricted stock units 1,558,149 Outstanding stock options 3,538,522 Reserved for convertible senior notes 17,140,242 Total shares of common stock reserved for future issuance 24,918,492 |
Schedule of stock-based compensation expense included in the consolidated statements of operations and comprehensive loss | The following table presents stock-based compensation expense related to the Stock Plans and the ESPP, contained on the following line items on the Company’s condensed consolidated statements of operations and comprehensive loss for each of the periods indicated. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Curriculum and teaching $ 18 $ 21 $ 51 $ 212 Servicing and support 3,856 3,409 11,669 10,979 Technology and content development 3,334 3,059 9,703 9,164 Marketing and sales 1,811 1,618 4,984 6,704 General and administrative 16,003 13,894 48,338 36,903 Total stock-based compensation expense $ 25,022 $ 22,001 $ 74,745 $ 63,962 |
Schedule of restricted and performance restricted stock unit activity | The following table presents a summary of the Company’s RSU activity for the period indicated. Number of Weighted- Outstanding balance as of December 31, 2020 3,010,019 $ 29.41 Granted 1,104,174 40.35 Vested (1,144,918) 33.24 Forfeited (287,696) 30.40 Outstanding balance as of September 30, 2021 2,681,579 $ 32.17 Number of Weighted- Outstanding balance as of December 31, 2020 1,355,296 $ 23.51 Granted 1,577,721 44.73 Vested (1,192,596) 22.47 Forfeited (182,272) 41.31 Outstanding balance as of September 30, 2021 1,558,149 $ 43.71 |
Schedule of assumptions used for estimating fair value | Accordingly, such awards are not considered granted for accounting purposes as of September 30, 2021 and December 31, 2020, and have been excluded from the tables below. Three Months Ended Nine Months Ended 2021 2020 2021 2020 Risk-free interest rate — — 0.10% – 0.26% 1.51% Expected term (years) — — 1.00 – 3.00 1.00 Expected volatility — — 85% – 89% 75% Dividend yield — — 0% 0% Weighted-average grant date fair value per share — — $61.33 $22.45 The following table summarizes the assumptions used for estimating the fair value of the stock options granted for the period presented. Three Months Ended Nine Months Ended 2021 2020 2021 2020 Risk-free interest rate — — — 1.5% Expected term (years) — — — 6.04 Expected volatility — — — 64% Dividend yield — — — 0% Weighted-average grant date fair value per share — — — $11.48 |
Schedule of stock option activity | The following table presents a summary of the Company’s stock option activity for the period indicated. Number of Weighted-Average Weighted-Average Aggregate Outstanding balance as of December 31, 2020 3,916,867 $ 35.63 5.08 $ 59,906 Granted — Exercised (280,241) 21.77 1.80 Forfeited (52,640) 54.10 Expired (45,464) 68.56 Outstanding balance as of September 30, 2021 3,538,522 36.03 4.30 41,267 Exercisable as of September 30, 2021 3,144,706 $ 31.68 3.94 $ 40,938 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of potential dilutive securities that would have been anti-dilutive due to 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 each of the periods indicated. Three and Nine Months Ended 2021 2020 Stock options 3,538,522 4,023,741 Restricted stock units 2,681,579 3,431,829 Performance restricted stock units 1,558,149 1,760,164 Shares related to convertible senior notes 13,443,374 3,432,837 Total antidilutive securities 21,221,624 12,648,571 |
Schedule of calculation of basic and diluted net loss per share | The following table presents the calculation of the Company’s basic and diluted net loss per share for each of the periods indicated. Three Months Ended Nine Months Ended 2021 2020 2021 2020 Numerator (in thousands): Net loss $ (60,110) $ (52,554) $ (127,505) $ (178,827) Denominator: Weighted-average shares of common stock outstanding, basic and diluted 74,691,521 68,580,439 74,266,999 66,368,686 Net loss per share, basic and diluted $ (0.80) $ (0.77) $ (1.72) $ (2.69) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of revenue, segment profitability and segment profitability margin by segment | The following table presents financial information regarding each of the Company’s reportable segment’s results of operations for each of the periods indicated. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (dollars in thousands) Revenue by segment* Degree Program Segment $ 147,795 $ 122,036 $ 439,884 $ 356,178 Alternative Credential Segment 84,581 79,037 262,174 203,061 Total revenue $ 232,376 $ 201,073 $ 702,058 $ 559,239 Segment profitability** Degree Program Segment $ 32,925 $ 9,713 $ 86,786 $ 20,876 Alternative Credential Segment (18,185) (6,001) (41,186) (23,555) Total segment profitability $ 14,740 $ 3,712 $ 45,600 $ (2,679) Segment profitability margin*** Degree Program Segment 22.3 % 8.0 % 19.7 % 5.9 % Alternative Credential Segment (21.5) (7.6) (15.7) (11.6) Total segment profitability margin 6.4 % 1.8 % 6.5 % (0.5) % * The Company has excluded immaterial amounts of intersegment revenues from the three- and nine-month periods ended September 30, 2021 and 2020. ** The Company defines segment profitability as net income or net loss, as applicable, before net interest income (expense), other income (expense), net, taxes, depreciation and amortization expense, deferred revenue fair value adjustments, transaction costs, integration costs, restructuring-related costs, stockholder activism costs, certain litigation-related costs, consisting of fees for certain non-ordinary course litigation and other proceedings, impairment charges, losses on debt extinguishment, 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 the respective segment’s revenue. |
Schedule of reconciliation of net loss to total segment profitability | The following table presents a reconciliation of the Company’s total segment profitability to net loss for each of the periods indicated. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Net loss $ (60,110) $ (52,554) $ (127,505) $ (178,827) Adjustments: Stock-based compensation expense 25,022 22,001 74,745 63,962 Other (income) expense, net 425 (42) (22,730) 1,659 Net interest expense 16,471 6,851 31,826 18,195 Income tax benefit (319) (162) (448) (1,580) Depreciation and amortization expense 26,168 23,936 77,577 71,406 Loss on debt extinguishment — — 1,101 11,671 Other* 7,083 3,682 11,034 10,835 Total adjustments 74,850 56,266 173,105 176,148 Total segment profitability $ 14,740 $ 3,712 $ 45,600 $ (2,679) * Includes (i) transaction and integration expense of $0.8 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively, and $2.6 million and $1.5 million for the nine months ended September 30, 2021 and 2020, respectively, (ii) restructuring-related expense of $5.4 million and $2.7 million for the three months ended September 30, 2021 and 2020, respectively, and $7.2 million and $3.2 million for the nine months ended September 30, 2021 and 2020, respectively, and (iii) stockholder activism and litigation-related expense of $0.8 million and $0.6 million for the three months ended September 30, 2021 and 2020, respectively, and $1.2 million and $6.2 million for the nine months ended September 30, 2021 and 2020, respectively. |
Schedule of total assets by segment | The following table presents the Company’s total assets by segment as of each of the dates indicated. September 30, December 31, (in thousands) Total assets Degree Program Segment $ 1,303,115 $ 830,706 Alternative Credential Segment 730,367 713,558 Total assets $ 2,033,482 $ 1,544,264 |
Receivables and Contract Liab_2
Receivables and Contract Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Schedule of trade accounts receivable and contract liabilities | The following table presents the Company’s trade accounts receivable and contract liabilities in each segment as of each of the dates indicated. September 30, December 31, (in thousands) Trade accounts receivable Degree Program Segment accounts receivable $ 24,927 $ 16,424 Degree Program Segment unbilled revenue 43,602 6,072 Alternative Credential Segment accounts receivable 37,805 29,717 Provision for credit losses (10,944) (5,936) Total trade accounts receivable $ 95,390 $ 46,277 Contract liabilities Degree Program Segment deferred revenue $ 11,224 $ 1,714 Alternative Credential Segment deferred revenue 85,760 73,779 Total contract liabilities $ 96,984 $ 75,493 |
Accounts receivable, allowance for credit loss | The following table presents the change in provision for credit losses for trade receivables on the Company’s condensed consolidated balance sheets for the period indicated. Provision for Credit Losses (in thousands) Balance as of December 31, 2020 $ 6,115 Current period provision 5,712 Amounts written off — Amounts recovered (877) Foreign currency translation adjustments (6) Balance as of September 30, 2021 $ 10,944 |
Schedule of financing receivable, allowance for credit loss | The following table presents the components of the Company’s receivables with extended payment terms as of each of the dates indicated. September 30, 2021 December 31, 2020 (in thousands) Receivables, gross $ 49,993 $ 25,587 Less: provision for credit losses (899) (179) Receivables, net $ 49,094 $ 25,408 Short-term receivables $ 25,734 $ 1,076 |
Organization (Details)
Organization (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021segment | Dec. 31, 2021USD ($) | |
Business Acquisition [Line Items] | ||
Number of reportable segments (in segments) | segment | 2 | |
edX Sub | Forecast | ||
Business Acquisition [Line Items] | ||
Membership Interests (in percent) | 100.00% | |
Purchase price | $ | $ 800 |
Goodwill and Amortizable Inta_3
Goodwill and Amortizable Intangible Assets - Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 415,830 | |
Foreign currency translation adjustments | (1,826) | |
Ending balance | 414,004 | |
Gross Carrying Amount | 551,348 | $ 509,619 |
Accumulated Amortization | (259,921) | (196,849) |
Total | 291,427 | 312,770 |
Degree Program Segment | ||
Goodwill [Roll Forward] | ||
Beginning balance | 0 | |
Foreign currency translation adjustments | 0 | |
Ending balance | 0 | |
Alternative Credential Segment | ||
Goodwill [Roll Forward] | ||
Beginning balance | 415,830 | |
Foreign currency translation adjustments | (1,826) | |
Ending balance | 414,004 | |
Capitalized technology | ||
Goodwill [Roll Forward] | ||
Gross Carrying Amount | 180,071 | 165,254 |
Accumulated Amortization | (103,163) | (75,822) |
Total | $ 76,908 | 89,432 |
Capitalized technology | Minimum | ||
Goodwill [Roll Forward] | ||
Estimated Average Useful Life (in years) | 3 years | |
Capitalized technology | Maximum | ||
Goodwill [Roll Forward] | ||
Estimated Average Useful Life (in years) | 5 years | |
Capitalized content development | ||
Goodwill [Roll Forward] | ||
Gross Carrying Amount | $ 235,268 | 208,170 |
Accumulated Amortization | (113,111) | (88,168) |
Total | $ 122,157 | 120,002 |
Capitalized content development | Minimum | ||
Goodwill [Roll Forward] | ||
Estimated Average Useful Life (in years) | 4 years | |
Capitalized content development | Maximum | ||
Goodwill [Roll Forward] | ||
Estimated Average Useful Life (in years) | 5 years | |
University client relationships | ||
Goodwill [Roll Forward] | ||
Gross Carrying Amount | $ 108,816 | 109,498 |
Accumulated Amortization | (31,475) | (23,376) |
Total | $ 77,341 | 86,122 |
University client relationships | Minimum | ||
Goodwill [Roll Forward] | ||
Estimated Average Useful Life (in years) | 9 years | |
University client relationships | Maximum | ||
Goodwill [Roll Forward] | ||
Estimated Average Useful Life (in years) | 10 years | |
Trade names and domain names | ||
Goodwill [Roll Forward] | ||
Gross Carrying Amount | $ 27,193 | 26,697 |
Accumulated Amortization | (12,172) | (9,483) |
Total | $ 15,021 | $ 17,214 |
Trade names and domain names | Minimum | ||
Goodwill [Roll Forward] | ||
Estimated Average Useful Life (in years) | 5 years | |
Trade names and domain names | Maximum | ||
Goodwill [Roll Forward] | ||
Estimated Average Useful Life (in years) | 10 years |
Goodwill and Amortizable Inta_4
Goodwill and Amortizable Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Net carrying amount | $ 291,427 | $ 291,427 | $ 312,770 | ||
Amortization expense | 23,200 | $ 20,800 | 68,000 | $ 61,800 | |
In Process Capitalized Technology and Content Development | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Net carrying amount | 44,500 | 44,500 | 38,600 | ||
Alternative Credential Segment | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill, accumulated impairment loss | $ 70,400 | $ 70,400 | $ 70,400 |
Goodwill and Amortizable Inta_5
Goodwill and Amortizable Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Future amortization expense | ||
Total | $ 291,427 | $ 312,770 |
Excluding in process capitalized technology and content development | ||
Future amortization expense | ||
Remainder of 2021 | 22,758 | |
2022 | 70,835 | |
2023 | 62,023 | |
2024 | 37,193 | |
2025 | 20,471 | |
Thereafter | 32,913 | |
Total | $ 246,193 |
Accrued and Deferred Expenses -
Accrued and Deferred Expenses - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued university and instructional staff compensation | $ 25,123 | $ 27,371 |
Accrued marketing expenses | 44,701 | 24,682 |
Accrued transaction, integration and restructuring-related expenses | 3,506 | 3,492 |
Accrued compensation and related benefits | 40,793 | 52,820 |
Accounts payable and other accrued expenses | 40,993 | 22,309 |
Total accounts payable and accrued expenses | $ 155,116 | $ 130,674 |
Accrued and Deferred Expenses_2
Accrued and Deferred Expenses - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Accrued payroll taxes, CARES Act | $ 11.3 | $ 11.3 | |||
Capitalized software implementation costs | 6.5 | $ 6.3 | |||
Amortization of capitalized software implementation costs | $ 0.7 | $ 0.3 | $ 1.8 | $ 0.9 | |
Minimum | Capitalized technology | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Estimated useful life of intangible assets | 3 years | ||||
Maximum | Capitalized technology | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Estimated useful life of intangible assets | 5 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Investments in education technology | $ 15 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Renewal term (in years) | 5 years | 5 years | |
Option to terminate, term (in years) | 1 year | ||
Weighted average remaining lease term (in years) | 8 years 1 month 6 days | 8 years 1 month 6 days | |
Weighted average discount rate | 11.30% | 11.30% | |
Operating lease payments | $ 16,500 | $ 12,700 | |
Future sublease income expected to be earned | $ 4,400 | ||
Remaining lease term | 3 years 2 months 12 days | 3 years 2 months 12 days | |
Loss on sublease | $ 4,845 | $ 0 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Contract term (in years) | 1 year | 1 year | |
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Contract term (in years) | 12 years | 12 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease expense | $ 4,897 | $ 3,848 | $ 13,524 | $ 11,189 |
Short-term lease expense | 66 | 50 | 120 | 284 |
Variable lease expense | 1,713 | 1,603 | 4,742 | 4,274 |
Sublease income | (155) | 0 | (265) | 0 |
Total lease expense | $ 6,521 | $ 5,501 | $ 18,121 | $ 15,747 |
Leases - Operating Lease Liabil
Leases - Operating Lease Liabilities Due (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Leases [Abstract] | |
Remainder of 2021 | $ 5,583 |
2022 | 21,869 |
2023 | 21,892 |
2024 | 21,732 |
2025 | 17,958 |
Thereafter | 91,138 |
Total lease payments | 180,172 |
Less: imputed interest | (65,905) |
Total lease liability | $ 114,267 |
Debt - Long-Term Debt (Details)
Debt - Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Less: unamortized debt discount and issuance costs | $ (111,689) | $ (111,043) |
Total debt | 748,878 | 273,800 |
Less: current portion of long-term debt | (6,109) | (627) |
Total long-term debt | 742,769 | 273,173 |
Term loan facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt | 473,813 | 0 |
Convertible senior notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 380,000 | 380,000 |
Deferred government grant obligations | ||
Debt Instrument [Line Items] | ||
Long-term debt | 3,500 | 3,500 |
Other borrowings | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 3,254 | $ 1,343 |
Debt - Additional Information (
Debt - Additional Information (Details) | Jun. 25, 2020USD ($) | Apr. 23, 2020 | Apr. 30, 2020USD ($)day$ / shares | Sep. 30, 2021USD ($)agreement | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($)agreement | Sep. 30, 2020USD ($) | Nov. 04, 2021USD ($) | Jun. 29, 2021USD ($) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||||||||
Loss on debt extinguishment | $ 0 | $ 0 | $ 1,101,000 | $ 11,671,000 | |||||||
Proceeds from debt | $ 469,595,000 | $ 371,681,000 | |||||||||
Purchases of capped calls in connection with convertible senior notes | $ 50,540,000 | ||||||||||
Number of contracts (in contracts) | agreement | 2 | 2 | |||||||||
Convertible senior notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt | $ 380,000,000 | $ 380,000,000 | $ 380,000,000 | ||||||||
Convertible senior notes | Fair Value, Inputs, Level 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Fair value | $ 528,700,000 | $ 528,700,000 | 616,600,000 | ||||||||
Deferred government grant obligations | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 3.00% | 3.00% | |||||||||
Long-term debt | $ 3,500,000 | $ 3,500,000 | 3,500,000 | ||||||||
Interest payable | $ 500,000 | $ 500,000 | 400,000 | ||||||||
Term Loan Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Aggregate principal amount | $ 475,000,000 | ||||||||||
Principal repayments | 0.25% | ||||||||||
Debt instrument, effective interest rate percentage | 7.87% | 7.88% | |||||||||
Interest expense | $ 9,000,000 | $ 9,300,000 | |||||||||
Term Loan Agreement | Base rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 4.75% | ||||||||||
Term Loan Agreement | Eurodollar | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 5.75% | ||||||||||
Credit Agreement | Letter of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Borrowing capacity terminated | $ 50,000,000 | ||||||||||
Loss on debt extinguishment | $ 1,100,000 | ||||||||||
Amended Term Loan Facility | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Aggregate principal amount | $ 100,000,000 | ||||||||||
Principal repayments | 0.25% | ||||||||||
The Notes | Convertible senior notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 2.25% | 2.25% | 2.25% | ||||||||
Aggregate principal amount | $ 380,000,000 | ||||||||||
Debt instrument, effective interest rate percentage | 10.90% | 11.20% | 11.10% | 10.80% | |||||||
Proceeds from debt | 369,600,000 | ||||||||||
Debt issuance costs | $ 7,800,000 | $ 7,300,000 | $ 23,000,000 | $ 12,300,000 | |||||||
Debt instrument, convertible, carrying Amount | $ 117,800,000 | ||||||||||
Allocated debt issuance costs | 7,200,000 | 7,200,000 | |||||||||
Allocated debt issuance costs for equity components | 3,200,000 | 3,200,000 | |||||||||
Unamortized debt discount | $ 94,500,000 | $ 94,500,000 | $ 111,000,000 | ||||||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||||||||||
Debt instrument, convertible, threshold trading days | day | 20 | ||||||||||
Debt instrument, convertible, threshold consecutive trading days | day | 30 | ||||||||||
Debt instrument, convertible, threshold consecutive trading days, sale price per share | day | 5 | ||||||||||
Debt instrument, convertible, measurement period | day | 10 | ||||||||||
Debt instrument, threshold percentage of sales price per share | 98.00% | ||||||||||
Debt instrument, convertible, conversion ratio | 0.0353773 | ||||||||||
Debt instrument, convertible, conversion price (in dollars per share) | $ / shares | $ 28.27 | ||||||||||
Capped call, cap price (in dollars per share) | $ / shares | $ 44.34 | ||||||||||
Purchases of capped calls in connection with convertible senior notes | $ 50,500,000 | ||||||||||
The Notes | Convertible senior notes | Measurement Input, Discount Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, discount rate | 0.103 | ||||||||||
Senior Secured Term Loan Facility | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Senior secured term loan facility | $ 250,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
U.S. statutory federal income tax rate | 1.00% | 1.00% | 1.00% | 1.00% |
Income tax expense (benefit) | $ (319) | $ (162) | $ (448) | $ (1,580) |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock and Stock-based Compensation (Details) $ in Thousands | Aug. 06, 2020USD ($)shares | Jun. 30, 2021USD ($)shares | Jun. 30, 2020USD ($)shares | Sep. 30, 2021USD ($)planshares | Sep. 30, 2020USD ($)shares | Mar. 31, 2021shares | Jan. 01, 2021shares | Dec. 31, 2020shares | Mar. 31, 2020shares | Jan. 01, 2020shares | Dec. 31, 2019shares |
Stockholders' Equity | |||||||||||
Authorized shares of capital stock (in shares) | 205,000,000 | ||||||||||
Authorized shares of common stock (in shares) | 200,000,000 | 200,000,000 | |||||||||
Authorized shares of preferred stock (in shares) | 5,000,000 | 5,000,000 | |||||||||
Common stock, issued (in shares) | 74,749,601 | 72,451,521 | |||||||||
Common stock, outstanding (in shares) | 74,749,601 | 72,451,521 | |||||||||
Available shares of common stock reserved for future issuance (in shares) | 24,918,492 | ||||||||||
Proceeds from issuance of common stock, net of offering costs | $ | $ 299,800 | $ 0 | $ 299,796 | ||||||||
Number of stock-based compensation plans | plan | 2 | ||||||||||
Issuance of common stock in connection with employee stock purchase plan | $ | $ 1,773 | $ 1,771 | |||||||||
Common Stock | |||||||||||
Stockholders' Equity | |||||||||||
Common stock, outstanding (in shares) | 74,507,853 | 64,300,599 | 74,749,601 | 71,294,706 | 74,038,208 | 72,451,521 | 63,703,067 | 63,569,109 | |||
Sale of common stock (in shares) | 6,800,000 | ||||||||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 50,406 | 83,573 | 50,406 | ||||||||
Issuance of common stock in connection with employee stock purchase plan | $ | $ 1,800 | ||||||||||
Restricted Stock Units (RSUs) | |||||||||||
Stockholders' Equity | |||||||||||
Available shares of common stock reserved for future issuance (in shares) | 2,681,579 | ||||||||||
Performance restricted stock units | |||||||||||
Stockholders' Equity | |||||||||||
Available shares of common stock reserved for future issuance (in shares) | 1,558,149 | ||||||||||
Stock options | |||||||||||
Stockholders' Equity | |||||||||||
Available shares of common stock reserved for future issuance (in shares) | 3,538,522 | ||||||||||
Convertible debt securities | |||||||||||
Stockholders' Equity | |||||||||||
Available shares of common stock reserved for future issuance (in shares) | 17,140,242 | ||||||||||
Employee Stock | |||||||||||
Stockholders' Equity | |||||||||||
Available shares of common stock reserved for future issuance (in shares) | 615,988 | ||||||||||
Equity Incentive Plan 2014 | |||||||||||
Stockholders' Equity | |||||||||||
Increase in shares in available for future issuance | 3,619,344 | 3,175,011 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | $ 25,022 | $ 22,001 | $ 74,745 | $ 63,962 |
Curriculum and teaching | ||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | 18 | 21 | 51 | 212 |
Servicing and support | ||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | 3,856 | 3,409 | 11,669 | 10,979 |
Technology and content development | ||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | 3,334 | 3,059 | 9,703 | 9,164 |
Marketing and sales | ||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | 1,811 | 1,618 | 4,984 | 6,704 |
General and administrative | ||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | $ 16,003 | $ 13,894 | $ 48,338 | $ 36,903 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted and Performance Restricted Stock Units (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Grant Date Fair Value [Roll Forward] | |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 61.33 |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation cost related to unvested RSUs | $ | $ 62.6 |
Weighted average period for recognition of compensation cost | 1 year 6 months |
Number of awards outstanding (in shares) | 2,681,579 |
Restricted Stock Units [Roll Forward] | |
Outstanding balance at the beginning of the period (in shares) | 3,010,019 |
Granted (in shares) | 1,104,174 |
Vested (in shares) | (1,144,918) |
Forfeited (in shares) | (287,696) |
Outstanding balance at the end of the period (in shares) | 2,681,579 |
Grant Date Fair Value [Roll Forward] | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 29.41 |
Granted (in dollars per share) | $ / shares | 40.35 |
Vested (in dollars per share) | $ / shares | 33.24 |
Forfeited (in dollars per share) | $ / shares | 30.40 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 32.17 |
Restricted stock units | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Restricted stock units | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years |
Performance restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation cost related to unvested RSUs | $ | $ 24.3 |
Weighted average period for recognition of compensation cost | 10 months 24 days |
Quantity of units subject to vesting | 200.00% |
Number of awards outstanding (in shares) | 1,558,149 |
Restricted Stock Units [Roll Forward] | |
Outstanding balance at the beginning of the period (in shares) | 1,355,296 |
Granted (in shares) | 1,577,721 |
Vested (in shares) | (1,192,596) |
Forfeited (in shares) | (182,272) |
Outstanding balance at the end of the period (in shares) | 1,558,149 |
Grant Date Fair Value [Roll Forward] | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 23.51 |
Granted (in dollars per share) | $ / shares | 44.73 |
Vested (in dollars per share) | $ / shares | 22.47 |
Forfeited (in dollars per share) | $ / shares | 41.31 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 43.71 |
Performance Restricted Stock Units With No Performance Metrics | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of awards outstanding (in shares) | 900,000 |
Restricted Stock Units [Roll Forward] | |
Outstanding balance at the beginning of the period (in shares) | 1,300,000 |
Outstanding balance at the end of the period (in shares) | 900,000 |
Stockholders' Equity - Fair Val
Stockholders' Equity - Fair Value Assumptions (Details) - $ / shares | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Fair value assumptions and methodology] | |||
Weighted average grant date fair value (in dollars per share) | $ 61.33 | $ 22.45 | |
Performance restricted stock units | |||
Fair value assumptions and methodology] | |||
Risk-free interest rate | 151.00% | ||
Risk-free interest rate minimum | 0.10% | ||
Risk-free interest rate maximum | 0.26% | ||
Expected term (years) | 1 year | ||
Expected volatility | 75.00% | ||
Expected volatility minimum | 85.00% | ||
Expected volatility maximum | 89.00% | ||
Dividend yield | 0.00% | 0.00% | |
Weighted average grant date fair value (in dollars per share) | $ 43.71 | $ 23.51 | |
Performance restricted stock units | Minimum | |||
Fair value assumptions and methodology] | |||
Expected term (years) | 1 year | ||
Performance restricted stock units | Maximum | |||
Fair value assumptions and methodology] | |||
Expected term (years) | 3 years | ||
Stock options | |||
Fair value assumptions and methodology] | |||
Risk-free interest rate | 1.50% | ||
Expected term (years) | 6 years 14 days | ||
Expected volatility | 64.00% | ||
Dividend yield | 0.00% | ||
Weighted average grant date fair value (in dollars per share) | $ 11.48 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | |
Number of Options | ||
Outstanding balance at the beginning of the period (in shares) | shares | 3,916,867 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | (280,241) | |
Forfeited (in shares) | shares | (52,640) | |
Expired (in shares) | shares | (45,464) | |
Outstanding balance at the end of the period (in shares) | shares | 3,538,522 | 3,916,867 |
Exercisable at the end of the period (in shares) | shares | 3,144,706 | |
Weighted-Average Exercise Price per Share | ||
Outstanding balance at the beginning of the period (in dollars per share) | $ / shares | $ 35.63 | |
Granted (in dollars per share) | $ / shares | ||
Exercised (in dollars per share) | $ / shares | 21.77 | |
Forfeited (in dollars per share) | $ / shares | 54.10 | |
Expired (in dollars per share) | $ / shares | 68.56 | |
Outstanding balance at the end of the period (in dollars per share) | $ / shares | 36.03 | $ 35.63 |
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 31.68 | |
Weighted Average Remaining Contractual Term | ||
Outstanding balance (in years) | 4 years 3 months 18 days | 5 years 29 days |
Exercised (in years) | 1 year 9 months 18 days | |
Weighted-average remaining contractual term of options exercisable at the end of the period (in years) | 3 years 11 months 8 days | |
Aggregate Intrinsic Value | ||
Outstanding balance at the end of the period | $ | $ 41,267 | $ 59,906 |
Exercisable at the end of the period | $ | $ 40,938 |
Stockholders' Equity - Stock _2
Stockholders' Equity - Stock Option Narrative (Details) - Stock options - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Stock-Based Compensation | ||
Expiration period | 10 years | |
Vesting period | 4 years | |
Intrinsic value of options exercisable at the end of the period | $ 6.3 | $ 6.8 |
Compensation cost related to the nonvested awards not yet recognized | $ 11.5 | |
Weighted average period for recognition of compensation cost | 1 year 10 months 24 days |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Potential dilutive securities that would have been anti-dilutive | ||||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 21,221,624 | 12,648,571 | 21,221,624 | 12,648,571 |
Numerator: | ||||
Net loss | $ (60,110) | $ (52,554) | $ (127,505) | $ (178,827) |
Denominator: | ||||
Weighted-average shares of common stock outstanding, basic (in shares) | 74,691,521 | 68,580,439 | 74,266,999 | 66,368,686 |
Weighted-average shares of common stock outstanding, diluted (in shares) | 74,691,521 | 68,580,439 | 74,266,999 | 66,368,686 |
Net loss per share, basic (in dollars per share) | $ (0.80) | $ (0.77) | $ (1.72) | $ (2.69) |
Net loss per share, diluted (in dollars per share) | $ (0.80) | $ (0.77) | $ (1.72) | $ (2.69) |
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) | 3,538,522 | 4,023,741 | 3,538,522 | 4,023,741 |
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) | 2,681,579 | 3,431,829 | 2,681,579 | 3,431,829 |
Performance 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) | 1,558,149 | 1,760,164 | 1,558,149 | 1,760,164 |
Shares related to convertible senior notes | ||||
Potential dilutive securities that would have been anti-dilutive | ||||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 13,443,374 | 3,432,837 | 13,443,374 | 3,432,837 |
Segment and Geographic Inform_3
Segment and Geographic Information - Concentration Risk (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments (in segments) | segment | 2 | ||||
Total revenue | $ 232,376 | $ 201,073 | $ 702,058 | $ 559,239 | |
Accounts receivable, net | 95,390 | 95,390 | $ 46,663 | ||
Degree Program Segment | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 147,795 | 122,036 | $ 439,884 | 356,178 | |
University client 1 | Customer concentration risk | Sales Revenue, Net | Degree Program Segment | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | $ 19,300 | $ 55,500 | |||
Percentage of concentration of credit risk | 10.00% | 10.00% | |||
University client 1 | Credit concentration risk | Accounts receivable, net | Degree Program Segment | |||||
Segment Reporting Information [Line Items] | |||||
Percentage of concentration of credit risk | 16.00% | 12.00% | |||
Accounts receivable, net | $ 14,900 | $ 14,900 | $ 5,800 | ||
University client 2 | Credit concentration risk | Accounts receivable, net | Degree Program Segment | |||||
Segment Reporting Information [Line Items] | |||||
Percentage of concentration of credit risk | 11.00% | ||||
Accounts receivable, net | $ 5,200 |
Segment and Geographic Inform_4
Segment and Geographic Information - Segment Results of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 232,376 | $ 201,073 | $ 702,058 | $ 559,239 |
Total segment profitability | $ 14,740 | $ 3,712 | $ 45,600 | $ (2,679) |
Total segment profitability margin | 6.40% | 1.80% | 6.50% | (0.50%) |
Degree Program Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 147,795 | $ 122,036 | $ 439,884 | $ 356,178 |
Total segment profitability | $ 32,925 | $ 9,713 | $ 86,786 | $ 20,876 |
Total segment profitability margin | 22.30% | 8.00% | 19.70% | 5.90% |
Alternative Credential Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 84,581 | $ 79,037 | $ 262,174 | $ 203,061 |
Total segment profitability | $ (18,185) | $ (6,001) | $ (41,186) | $ (23,555) |
Total segment profitability margin | (21.50%) | (7.60%) | (15.70%) | (11.60%) |
Segment and Geographic Inform_5
Segment and Geographic Information - Reconciliation of Net Loss to Total Segment Profitability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting [Abstract] | ||||||||
Net loss | $ (60,110) | $ (21,831) | $ (45,564) | $ (52,554) | $ (66,167) | $ (60,106) | $ (127,505) | $ (178,827) |
Adjustments | ||||||||
Stock-based compensation expense | 25,022 | 22,001 | 74,745 | 63,962 | ||||
Other income (expense), net | 425 | (42) | (22,730) | 1,659 | ||||
Net interest expense | 16,471 | 6,851 | 31,826 | 18,195 | ||||
Income tax benefit | (319) | (162) | (448) | (1,580) | ||||
Depreciation and amortization expense | 26,168 | 23,936 | 77,577 | 71,406 | ||||
Loss on debt extinguishment | 0 | 0 | 1,101 | 11,671 | ||||
Other | 7,083 | 3,682 | 11,034 | 10,835 | ||||
Total adjustments | 74,850 | 56,266 | 173,105 | 176,148 | ||||
Total segment profitability | 14,740 | 3,712 | 45,600 | (2,679) | ||||
Transaction and integration costs | 800 | 400 | 2,600 | 1,500 | ||||
Restructuring-related costs | 5,400 | 2,700 | 7,200 | 3,200 | ||||
Stockholder activism costs | $ 800 | $ 600 | $ 1,200 | $ 6,200 |
Segment and Geographic Inform_6
Segment and Geographic Information - Total Assets by Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 2,033,482 | $ 1,544,264 |
Degree Program Segment | ||
Segment Reporting Information [Line Items] | ||
Total assets | 1,303,115 | 830,706 |
Alternative Credential Segment | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 730,367 | $ 713,558 |
Segment and Geographic Inform_7
Segment and Geographic Information - Geographical Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Geographical Information | |||||
Total revenue | $ 232,376 | $ 201,073 | $ 702,058 | $ 559,239 | |
Assets | 2,033,482 | 2,033,482 | $ 1,544,264 | ||
Alternative Credential Segment | |||||
Geographical Information | |||||
Total revenue | 84,581 | 79,037 | 262,174 | 203,061 | |
Assets | 730,367 | 730,367 | 713,558 | ||
Alternative Credential Segment | Non-US | |||||
Geographical Information | |||||
Total revenue | 24,700 | $ 19,700 | 74,100 | $ 49,200 | |
Assets | $ 2,300 | $ 2,300 | $ 1,600 |
Receivables and Contract Liab_3
Receivables and Contract Liabilities - Trade Accounts Receivable and Contract Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Total trade accounts receivable | $ 95,390 | $ 46,277 | |
Contract liabilities | 96,984 | 75,493 | |
Degree Program Segment | |||
Segment Reporting Information [Line Items] | |||
Accounts receivable, before allowance for credit loss, current | 24,927 | 16,424 | |
Degree Program Segment unbilled revenue | 43,602 | 6,072 | |
Contract liabilities | 11,224 | 1,714 | |
Contract with customer, liability, revenue recognized | 1,700 | $ 2,200 | |
Alternative Credential Segment | |||
Segment Reporting Information [Line Items] | |||
Accounts receivable, before allowance for credit loss, current | 37,805 | 29,717 | |
Provision for credit losses | (10,944) | (5,936) | |
Contract liabilities | 85,760 | $ 73,779 | |
Contract with customer, liability, revenue recognized | $ 71,900 | $ 46,600 |
Receivables and Contract Liab_4
Receivables and Contract Liabilities - Change in Provision for Credit Losses for Trade Receivables (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance as of December 31, 2020 | $ 6,115 | |
Current period provision | 5,712 | $ 2,703 |
Amounts written off | 0 | |
Amounts recovered | (877) | |
Foreign currency translation adjustments | (6) | |
Balance as of September 30, 2021 | $ 10,944 |
Receivables and Contract Liab_5
Receivables and Contract Liabilities - Contract Acquisition Costs (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Degree Program Segment | ||
Segment Reporting Information [Line Items] | ||
Capitalized contract cost | $ 0.5 | $ 0.5 |
Receivables and Contract Liab_6
Receivables and Contract Liabilities - Other Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Receivables, gross | $ 49,993 | $ 25,587 |
Less: provision for credit losses | (899) | (179) |
Receivables, net | 49,094 | 25,408 |
Short-term receivables | $ 25,734 | $ 1,076 |
Outstanding receivables, percent current | 94.00% |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash interest payments | $ 4.5 | $ 6.3 |
Unpaid capital expenditures | $ 4.3 | $ 3.1 |