Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 07, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
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, $0.001 par value per share | |
Trading Symbol | TWOU | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,858,478 | |
Entity Central Index Key | 0001459417 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 22,621 | $ 60,689 |
Restricted cash | 12,268 | 12,710 |
Accounts receivable, net | 71,338 | 115,944 |
Other receivables, net | 23,819 | 28,293 |
Prepaid expenses and other assets | 34,812 | 33,828 |
Total current assets | 164,858 | 251,464 |
Other receivables, net, non-current | 15,347 | 12,507 |
Property and equipment, net | 33,800 | 40,233 |
Right-of-use assets | 55,324 | 63,986 |
Goodwill | 311,884 | 651,498 |
Intangible assets, net | 293,653 | 371,198 |
Other assets, non-current | 49,448 | 68,797 |
Total assets | 924,314 | 1,459,683 |
Current liabilities | ||
Accounts payable and accrued expenses | 73,186 | 103,378 |
Deferred revenue | 83,781 | 81,949 |
Lease liability | 13,765 | 15,158 |
Accrued restructuring liability | 6,926 | 14,506 |
Long-term debt, current | 908,298 | 8,215 |
Other current liabilities | 36,891 | 36,133 |
Total current liabilities | 1,122,847 | 259,339 |
Long-term debt | 0 | 896,514 |
Deferred tax liabilities, net | 314 | 323 |
Lease liability, non-current | 77,248 | 83,297 |
Other liabilities, non-current | 1,116 | 1,165 |
Total liabilities | 1,201,525 | 1,240,638 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity | ||
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, 2,805,301 shares issued and outstanding as of June 30, 2024; 2,741,980 shares issued and outstanding as of December 31, 2023 | 3 | 3 |
Additional paid-in capital | 1,752,110 | 1,741,737 |
Accumulated deficit | (2,004,668) | (1,497,579) |
Accumulated other comprehensive loss | (24,656) | (25,116) |
Total stockholders’ equity | (277,211) | 219,045 |
Total liabilities and stockholders’ equity | $ 924,314 | $ 1,459,683 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 2,805,301 | 2,741,980 |
Common stock, shares outstanding (in shares) | 2,805,301 | 2,741,980 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Income Statement [Abstract] | |||||
Revenue | $ 180,683 | $ 222,089 | $ 379,060 | $ 460,593 | |
Costs and expenses | |||||
Curriculum and teaching | 29,634 | 34,102 | 60,686 | 66,942 | |
Servicing and support | 22,719 | 33,585 | 48,230 | 69,694 | |
Technology and content development | 32,062 | 44,250 | 67,057 | 89,734 | |
Marketing and sales | 81,768 | 95,882 | 171,480 | 196,057 | |
General and administrative | 41,985 | 32,657 | 81,687 | 71,907 | |
Restructuring charges | 8,406 | 3,622 | 13,133 | 8,497 | |
Impairment charges | 396,149 | 134,117 | 396,149 | 134,117 | |
Total costs and expenses | 612,723 | 378,215 | 838,422 | 636,948 | |
Loss from operations | (432,040) | (156,126) | (459,362) | (176,355) | |
Interest income | 364 | 371 | 941 | 736 | |
Interest expense | (19,376) | (17,916) | (38,643) | (35,873) | |
Debt modification expense and loss on debt extinguishment | 0 | 0 | 0 | (16,735) | |
Other (expense) income, net | (1,428) | 227 | (9,832) | 834 | |
Loss before income taxes | (452,480) | (173,444) | (506,896) | (227,393) | |
Income tax benefit (expense) | 40 | (210) | (193) | (323) | |
Net loss | $ (452,440) | $ (173,654) | $ (507,089) | $ (227,716) | |
Net loss per share, basic (in dollars per share) | [1] | $ (161.30) | $ (64.66) | $ (181.54) | $ (85.45) |
Net loss per share, diluted (in dollars per share) | [1] | $ (161.30) | $ (64.66) | $ (181.54) | $ (85.45) |
Weighted-average shares of common stock outstanding, basic (in shares) | [1] | 2,804,924 | 2,685,645 | 2,793,262 | 2,664,889 |
Weighted-average shares of common stock outstanding, diluted (in shares) | [1] | 2,804,924 | 2,685,645 | 2,793,262 | 2,664,889 |
Other comprehensive income (loss) | |||||
Foreign currency translation adjustments, net of tax of $0 for all periods presented | $ 2,151 | $ (4,001) | $ 460 | $ (7,304) | |
Comprehensive loss | $ (450,289) | $ (177,655) | $ (506,629) | $ (235,020) | |
[1] Amounts have been adjusted to reflect the Reverse Stock Split that became effective on June 13, 2024. Refer to Note 2 for further information about the Reverse Stock Split. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
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 ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | ||
Balance (in shares) at Dec. 31, 2022 | [1] | 2,611,753 | |||||
Balance at Dec. 31, 2022 | $ 501,516 | $ 3 | [1] | $ 1,700,930 | $ (1,179,972) | $ (19,445) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | [1] | 6,697 | |||||
Issuance of common stock in connection with employee stock purchase plan | 1,177 | 1,177 | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | [1] | 34,701 | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (361) | (361) | |||||
Exercise of stock options (in shares) | [1] | 570 | |||||
Exercise of stock options | 110 | 110 | |||||
Stock-based compensation expense | 14,563 | 14,563 | |||||
Net loss | (54,062) | (54,062) | |||||
Foreign currency translation adjustment | (3,303) | (3,303) | |||||
Balance (in shares) at Mar. 31, 2023 | [1] | 2,653,721 | |||||
Balance at Mar. 31, 2023 | 459,640 | $ 3 | [1] | 1,716,419 | (1,234,034) | (22,748) | |
Balance (in shares) at Dec. 31, 2022 | [1] | 2,611,753 | |||||
Balance at Dec. 31, 2022 | 501,516 | $ 3 | [1] | 1,700,930 | (1,179,972) | (19,445) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net loss | (227,716) | ||||||
Foreign currency translation adjustment | (7,304) | ||||||
Balance (in shares) at Jun. 30, 2023 | [1] | 2,698,684 | |||||
Balance at Jun. 30, 2023 | 293,518 | $ 3 | [1] | 1,727,952 | (1,407,688) | (26,749) | |
Balance (in shares) at Mar. 31, 2023 | [1] | 2,653,721 | |||||
Balance at Mar. 31, 2023 | $ 459,640 | $ 3 | [1] | 1,716,419 | (1,234,034) | (22,748) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | [1] | 8,304 | |||||
Issuance of common stock in connection with employee stock purchase plan | $ 925 | 925 | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | [1] | 36,659 | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (375) | (375) | |||||
Stock-based compensation expense | 10,983 | 10,983 | |||||
Net loss | (173,654) | (173,654) | |||||
Foreign currency translation adjustment | (4,001) | (4,001) | |||||
Balance (in shares) at Jun. 30, 2023 | [1] | 2,698,684 | |||||
Balance at Jun. 30, 2023 | $ 293,518 | $ 3 | [1] | 1,727,952 | (1,407,688) | (26,749) | |
Balance (in shares) at Dec. 31, 2023 | 2,741,980 | 2,741,980 | [2] | ||||
Balance at Dec. 31, 2023 | $ 219,045 | $ 3 | [2] | 1,741,737 | (1,497,579) | (25,116) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | [2] | 20,756 | |||||
Issuance of common stock in connection with employee stock purchase plan | 661 | 661 | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | [2] | 25,404 | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (112) | (112) | |||||
Stock-based compensation expense | 5,324 | 5,324 | |||||
Net loss | (54,649) | (54,649) | |||||
Foreign currency translation adjustment | (1,691) | (1,691) | |||||
Balance (in shares) at Mar. 31, 2024 | [2] | 2,788,140 | |||||
Balance at Mar. 31, 2024 | $ 168,578 | $ 3 | [2] | 1,747,610 | (1,552,228) | (26,807) | |
Balance (in shares) at Dec. 31, 2023 | 2,741,980 | 2,741,980 | [2] | ||||
Balance at Dec. 31, 2023 | $ 219,045 | $ 3 | [2] | 1,741,737 | (1,497,579) | (25,116) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Exercise of stock options (in shares) | 0 | ||||||
Net loss | $ (507,089) | ||||||
Foreign currency translation adjustment | $ 460 | ||||||
Balance (in shares) at Jun. 30, 2024 | 2,805,301 | 2,805,301 | [2] | ||||
Balance at Jun. 30, 2024 | $ (277,211) | $ 3 | [2] | 1,752,110 | (2,004,668) | (24,656) | |
Balance (in shares) at Mar. 31, 2024 | [2] | 2,788,140 | |||||
Balance at Mar. 31, 2024 | 168,578 | $ 3 | [2] | 1,747,610 | (1,552,228) | (26,807) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | [2] | 17,161 | |||||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (11) | (11) | |||||
Stock-based compensation expense | 4,511 | 4,511 | |||||
Net loss | (452,440) | (452,440) | |||||
Foreign currency translation adjustment | $ 2,151 | 2,151 | |||||
Balance (in shares) at Jun. 30, 2024 | 2,805,301 | 2,805,301 | [2] | ||||
Balance at Jun. 30, 2024 | $ (277,211) | $ 3 | [2] | $ 1,752,110 | $ (2,004,668) | $ (24,656) | |
[1] Amounts have been adjusted to reflect the Reverse Stock Split that became effective on June 13, 2024. Refer to Note 2 for further information about the Reverse Stock Split. Amounts have been adjusted to reflect the Reverse Stock Split that became effective on June 13, 2024. Refer to Note 2 for further information about the Reverse Stock Split. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities | ||
Net loss | $ (507,089) | $ (227,716) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Non-cash interest expense | 6,159 | 6,818 |
Depreciation and amortization expense | 49,572 | 57,348 |
Stock-based compensation expense | 9,835 | 25,546 |
Non-cash lease expense | 8,313 | 8,804 |
Restructuring | 0 | (13) |
Impairment charges | 396,149 | 134,117 |
Provision for credit losses | 2,368 | 4,245 |
Loss on debt extinguishment | 0 | 12,123 |
Loss on sale of receivables | 8,120 | 0 |
Other | 1,713 | (787) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 34,510 | (26,968) |
Other receivables, net | 577 | 723 |
Prepaid expenses and other assets | 17,977 | 4,358 |
Accounts payable and accrued expenses | (38,659) | 5,014 |
Deferred revenue | 1,986 | 16,736 |
Other liabilities, net | (11,456) | (19,166) |
Net cash (used in) provided by operating activities | (19,925) | 1,182 |
Cash flows from investing activities | ||
Additions of amortizable intangible assets | (15,243) | (23,027) |
Purchases of property and equipment | (465) | (2,105) |
Advances repaid by university clients | 0 | 100 |
Net cash used in investing activities | (15,708) | (25,032) |
Cash flows from financing activities | ||
Proceeds from debt | 0 | 269,223 |
Payments on debt | (2,488) | (352,533) |
Prepayment premium on extinguishment of senior secured term loan facility | 0 | (5,666) |
Payment of debt issuance costs | 0 | (4,411) |
Tax withholding payments associated with settlement of restricted stock units | (123) | (736) |
Proceeds from exercise of stock options | 0 | 110 |
Proceeds from employee stock purchase plan share purchases | 661 | 2,102 |
Net cash used in financing activities | (1,950) | (91,911) |
Effect of exchange rate changes on cash | (927) | (118) |
Net decrease in cash, cash equivalents and restricted cash | (38,510) | (115,879) |
Cash, cash equivalents and restricted cash, beginning of period | 73,399 | 182,578 |
Cash, cash equivalents and restricted cash, end of period | $ 34,889 | $ 66,699 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization 2U, Inc. (together with its subsidiaries, the “Company”) is a leading online education platform company. The Company’s mission is to expand access to high-quality education and unlock human potential. As a trusted partner to top-ranked nonprofit universities and other leading organizations, the Company delivers technology and services that enable its clients to bring their educational offerings online at scale. The Company provides 89 million people worldwide with access to world-class education in partnership with 260 top-ranked global universities and other leading organizations. Through edX, its education consumer marketplace, the Company offers more than 4,700 high-quality online learning opportunities, including open courses, executive education offerings, boot camps, professional certificates as well as undergraduate and graduate degree programs. The Company’s offerings cover a wide range of topics including artificial intelligence, business, healthcare, education, and social work, and provide learners with an affordable pathway to achieve both short-term and long-term professional and educational goals. The Company’s platform provides its clients with the digital infrastructure to launch world-class online education offerings and allow students to easily access high-quality, job-relevant education without the barriers of cost or location. 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. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
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 six months ended June 30, 2024 and 2023 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, 2023. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2023 was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP on an annual reporting basis. As further discussed in the Reverse Stock Split section below, all per share amounts and common share amounts have been adjusted on a retrospective basis to reflect the Reverse Stock Split (as defined below). Going Concern At each annual and interim period, the Company evaluates whether there are conditions or events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. The evaluation is based on relevant conditions or events that are known or reasonably knowable at the date that the consolidated financial statements are issued. Pursuant to the Second Amended Credit Agreement, as defined in Note 8, if more than $40 million of the Company’s 2025 Notes, as defined below, remain outstanding on January 30, 2025, the maturity date of the outstanding term loan balance of $372.4 million springs forward to January 30, 2025. As disclosed in Note 15, on July 24, 2024, the Debtors entered into the RSA with certain creditors, including (i) the Consenting Noteholders comprising certain holders of the 2025 Notes, (ii) the Consenting Noteholders comprising certain holders of the 2030 Notes, and (iii) the Consenting Lenders comprising certain lenders under the Second Amended Credit Agreement. As set forth in the RSA, including in the Restructuring Term Sheet, the parties to the RSA have agreed to the principal terms of a proposed financial restructuring of the Debtors. Pursuant to the RSA, on July 24, 2024, the Debtors commenced solicitation of votes on its Plan, and on July 25, 2024, the Debtors commenced voluntary cases under the Bankruptcy Code in the Bankruptcy Court providing for a court-administered reorganization pursuant to the Plan. The Debtors expect to continue to operate their business as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The filing of the Chapter 11 Cases constituted an event of default under the 2025 Notes Indenture, the 2030 Notes Indenture, and the Second Amended Credit Agreement (the “Debt Instruments”) that accelerated obligations under the Debt Instruments. The amount outstanding under each Debt Instrument as of the Petition Date was: approximately $380.0 million of borrowings (plus any accrued but unpaid interest in respect thereof) under the 2025 Notes Indenture; approximately $147.0 million of borrowings (plus any accrued but unpaid interest in respect thereof) under the 2030 Notes Indenture; and approximately $414.3 million of borrowings (plus any accrued but unpaid interest in respect thereof) under the Second Amended Credit Agreement. The Debt Instruments provide that, as a result of the Chapter 11 Cases, the principal and interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments are automatically stayed as a result of the Chapter 11 Cases and the holders’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code. Pursuant to the RSA, the Consenting Lenders have committed to amend and restate the Second Amended Credit Agreement to provide for, among other things, (i) a revised covenant package that does not require that the Company achieve a minimum level of Recurring Revenue and (ii) an extended maturity date for the borrowings thereunder that is 27 months following the effective date of the Plan. In addition, the Second Amended Credit Agreement also contains a financial covenant that requires the Company to maintain at least $900 million of Recurring Revenues (as defined by the Second Amended Credit Agreement) as of the last day of any period of four consecutive fiscal quarters. The Recurring Revenue for the four consecutive quarters ending June 30, 2024 was less than $900 million and accordingly the Company was not in compliance with this covenant under the Second Amended Credit Agreement. Although failure to comply with this financial covenant without being able to cure or otherwise obtain a waiver could cause the obligations under the Second Amended Credit Agreement to accelerate, any efforts to enforce such acceleration under the Second Amended Credit Agreement is automatically stayed as a result of the Chapter 11 Cases and the lenders’ rights of enforcement in respect of the Second Amended Credit Agreement are subject to the applicable provisions of the Bankruptcy Code. In light of the foregoing, substantial doubt exists about the Company’s ability to continue as a going concern within one year from the date that the condensed consolidated financial statements are issued. The Company’s ability to continue as a going concern is contingent upon, among other things, its ability to, subject to approval by the Bankruptcy Court, implement the Transaction, successfully emerge from the Chapter 11 Cases and generate sufficient liquidity following the Transaction to meet its obligations and operating needs. The Transaction contemplated by the RSA, including the Restructuring Term Sheet, is subject to approval by the Bankruptcy Court, among other conditions. Accordingly, no assurance can be given that the transactions described therein will be consummated on the expected terms, if at all. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will be able to continue as a going concern and contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, nor do they include adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. Nasdaq Listing Status On March 14, 2024, the Company received a written notification from Nasdaq that it had failed to comply with Nasdaq’s minimum bid price requirement. In accordance with Nasdaq rules, the Company had a period of 180 calendar days, or until September 10, 2024 to regain compliance with the minimum bid price requirement. As part of the Company’s efforts to regain compliance with Nasdaq’s minimum bid price requirement, the Company effected a 1-for-30 reverse stock split on June 13, 2024 and the Company’s common stock began trading on a post-split adjusted basis on June 14, 2024. See below for a discussion of the Reverse Stock Split. On July 1, 2024, the Company received a written notification from Nasdaq that for the prior 10 consecutive business days, the closing bid price of the Company’s common stock had been at $1.00 per share or greater. Accordingly, the Company regained compliance with the minimum bid price requirement. On July 29, 2024, the Company was notified by Nasdaq that it had determined to delist the Company’s common stock pursuant to Nasdaq Listing Rules 5101, 5110(b), and IM‑5101-1 as a result of the commencement of the Chapter 11 Cases. The Company does not intend to appeal this determination. Trading of the Company’s common stock was suspended at the opening of business on August 7, 2024, and a Form 25-NSE will be filed with the SEC, which will remove the Company’s common stock from listing and registration on Nasdaq. Effective August 7, 2024, the Company’s common stock began being quoted on the OTC Pink Market operated by OTC Markets Group Company under the symbol “TWOUQ”. Reverse Stock Split On May 20, 2024, the Company’s stockholders voted to approve amendments to the Company’s Eighth Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), to effect a reverse stock split of all of the outstanding shares of the Company’s common stock, par value $0.001 per share, at a ratio ranging from any whole number between 1-for-10 and 1-for-40, with the exact ratio within such range to be determined by the Company’s Board of Directors (the “Board”) in its discretion, subject to the Board’s authority to abandon such amendments. On June 5, 2024, the Board approved the amendment to the Certificate of Incorporation effecting the reverse stock split at a ratio of 1-for-30 (the “Reverse Stock Split”). On June 13, 2024, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split. The Reverse Stock Split became effective on June 13, 2024 and trading on the Nasdaq Global Select Market on a post-split basis began on June 14, 2024. Following the Reverse Stock Split, the number of authorized shares of the Company’s common stock remained at 200,000,000. The Reverse Stock Split reduced the total number of issued and outstanding shares of common stock from 82,260,619 to 2,741,980 as of December 31, 2023. The par value of the Company’s common stock remained at $0.001. The Company’s stockholders’ equity, in the aggregate, remained unchanged following the Reverse Stock Split. Per share net loss increased because there were fewer shares of the Company’s common stock outstanding. There were no other accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, that arose as a result of the Reverse Stock Split. No fractional shares were issued in conjunction with the Reverse Stock Split. Instead, stockholders who would otherwise have been entitled to receive fractional shares as a result of the Reverse Stock Split received a cash payment in lieu thereof at a price equal to the fraction to which the stockholder would otherwise be entitled multiplied by the closing sales price per share of the common stock (as adjusted for the Reverse Stock Split) on the Nasdaq Global Select Market on June 13, 2024. These cash payments were immaterial to the Company’s condensed consolidated financial statements. The Reverse Stock Split impacted all stockholders uniformly and did not affect any stockholder’s percentage of ownership or proportionate voting power other than very minor impacts from the treatment of fractional shares. 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, implied price concessions, acquired intangible assets, the recoverability of goodwill, indefinite-lived intangible assets and long- lived assets, deferred tax assets, and the fair value of the convertible senior notes. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. The Company evaluates its estimates and assumptions on an ongoing basis. Fair Value Measurements The carrying amounts of certain assets and liabilities, including cash and cash equivalents, receivables, advances to university clients, accounts payable and accrued expenses and other current liabilities, approximate their respective fair values due to their short-term nature. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in the absence of a principal, most advantageous, market for the specific asset or liability. U.S. GAAP provides for a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. Generally, assets are recorded at fair value on a non-recurring basis as a result of impairment charges. The Company remeasures non-financial assets such as goodwill, intangible assets and other long-lived assets at fair value when there is an indicator of impairment, and records them at fair value only when recognizing an impairment loss. The fair value hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. Refer to Note 3 for further discussion of assets measured at fair value on a nonrecurring basis. The three tiers are defined as follows: • Level 1 —Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; • Level 2 —Observable inputs, other than quoted prices in active markets, that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and • Level 3 —Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The Company has financial instruments, including cash deposits, receivables, accounts payable and debt. The carrying values for such financial instruments, other than the Company’s convertible senior notes, each approximated their fair values as of June 30, 2024 and December 31, 2023. Refer to Note 8 for more information regarding the Company’s convertible senior notes. Long-lived Assets The Company reviews long-lived assets, which consist of property and equipment, capitalized technology, capitalized content development and acquired finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. In order to assess the recoverability of the capitalized technology and content development, the amounts are grouped by the lowest level of independent cash flows. Recoverability of a long-lived asset is measured by a comparison of the carrying value of an asset or asset group to the future undiscounted net cash flows expected to be generated by that asset or asset group. If such assets are not recoverable, the impairment to be recognized is measured by the amount by which the carrying value of an asset exceeds the estimated fair value (discounted cash flow) of the asset or asset group. The Company’s impairment analysis is based upon cumulative results and forecasted performance. Determining whether a long-lived asset is impaired requires various estimates and assumptions, including whether a triggering event has occurred, the identification of asset groups, estimates of future cash flows, and discount rates and royalty rates used to determine fair values. During the three and six months ended June 30, 2024, the Company recorded impairment charges of $56.2 million related to intangible and other long-lived assets within the Alternative Credential Segment, of which $32.2 million related to university client relationships, $10.3 million related to capitalized technology, $5.2 million related to right-of-use assets, $4.4 million related to trade names and domain names, $2.4 million related to capitalized content development, and $1.7 million related to fixed assets. During the three and six months ended June 30, 2023, the Company did not record impairment charges related to its long-lived assets. Goodwill and Other Indefinite-lived Intangible Assets The Company reviews goodwill and other indefinite-lived intangible assets for impairment annually, as of October 1, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of goodwill or an indefinite-lived asset below its carrying value. Goodwill Goodwill is the excess of purchase price over the fair value of identified net assets of businesses acquired. The Company’s goodwill balance relates to its acquisitions of GetSmarter in July 2017, Trilogy in May 2019 and edX in November 2021. The Company tests goodwill at the reporting unit level, which is an operating segment or one level below an operating segment. The Company initially assesses qualitative factors to determine if it is necessary to perform a quantitative goodwill impairment review. The Company reviews goodwill for impairment using a quantitative approach if it decides to bypass the qualitative assessment or determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value based on a qualitative assessment. Upon completion of a quantitative assessment, the Company may be required to recognize an impairment based on the difference between the carrying value and the fair value of the reporting unit. During the second quarter of 2023, the Company completed the update of its internal financial reporting structure to better align with the executive structure following the 2022 Strategic Realignment. As a result of this update, the Company’s three reporting units within the Alternative Credential Segment (Executive Education, Boot Camp, and Open Courses) were combined into a single reporting unit (Alternative Credential). The Degree Program Segment continues to have one reporting unit (Degree Program). The Company performed impairment assessments before and after the change in reporting units. Refer to the Interim Impairment Assessments section below for further information regarding the results of these assessments. The Company determines the fair value of a reporting unit by utilizing a weighted combination of the income-based and market-based approaches. The income-based approach requires the Company to make significant assumptions and estimates. These assumptions and estimates primarily include, but are not limited to, discount rates, terminal growth rates, and forecasts of revenue and margins. When determining these assumptions and preparing these estimates, the Company considers each reporting unit’s historical results and current operating trends, revenue, profitability, cash flow results and forecasts, and industry trends. These estimates can be affected by a number of factors including, but not limited to, general economic and regulatory conditions, market capitalization, the continued efforts of competitors to gain market share and prospective student enrollment patterns. In addition, the value of a reporting unit using the market-based approach is estimated by comparing the reporting unit to other publicly traded companies and/or to publicly-disclosed business mergers and acquisitions in similar lines of business. The value of a reporting unit is based on pricing multiples of certain financial parameters observed in the comparable companies. The Company also makes estimates and assumptions for market values to determine a reporting unit’s estimated fair value. Other Indefinite-lived Intangible Assets In November 2021, the Company acquired an indefinite-lived intangible asset, which represented the established edX trade name. The Company concluded that due to changes in facts and circumstances, effective July 1, 2023, the edX trade name should no longer have an indefinite useful life. The Company began amortizing the edX trade name on a straight-line basis over its estimated remaining useful life of 25 years. The Company determined the fair value of its indefinite-lived asset utilizing the income-based approach. The income-based approach requires the Company to make significant assumptions and estimates. These assumptions and estimates primarily include, but are not limited to, discount rates, terminal growth rates, forecasts of revenue and margins, and royalty rates. When determining these assumptions and preparing these estimates, the Company considers historical results and current operating trends, revenue, profitability, cash flow results and forecasts, and industry trends. These estimates can be affected by a number of factors including, but not limited to, general economic and regulatory conditions, the continued efforts of competitors to gain market share and prospective student enrollment patterns. Interim Impairment Assessments During the second quarter of 2023, the Company experienced a significant decline in its market capitalization, which management deemed to be a triggering event related to the Company’s goodwill and indefinite-lived intangible asset. In addition, as a result of the change in the Company’s reporting units in the second quarter of 2023, the Company performed interim impairment assessments before and after the change in reporting units. The Company performed these interim impairment assessments as of May 1, 2023. For the quantitative interim impairment assessment performed as of May 1, 2023, before the change in reporting units, management determined the carrying value of the Open Courses reporting unit and the carrying value of an indefinite-lived intangible asset, both within the Alternative Credential Segment, exceeded their respective estimated fair value. As a result, during the three months ended June 30, 2023, the Company recorded impairment charges of $16.7 million to goodwill, all of which related to the Open Courses reporting unit, and $117.4 million to the indefinite-lived intangible asset. These charges are included within operating expense on the Company’s condensed consolidated statements of operations. The estimated fair value of each of the remaining reporting units exceeded their respective carrying value by approximately 10% or more. For the interim impairment assessment performed as of May 1, 2023, after the change in reporting units, management determined it was not more likely than not that the fair values of the Degree Program reporting unit and the Alternative Credential reporting unit were less than their respective carrying amounts. As such, the Company concluded that the goodwill relating to those reporting units was not impaired and further quantitative impairment assessment was not necessary. During the third quarter of 2023, the Company experienced a significant decline in its market capitalization, which management deemed to be a triggering event related to the Company’s goodwill. The Company performed a quantitative interim impairment assessment as of September 30, 2023. The estimated fair value of each of the Company’s reporting units exceeded their respective carrying value by more than 10%. Based on the qualitative assessment performed as of October 1, 2023, the date of the annual goodwill impairment assessment, the Company had no reporting units whose estimated fair value exceeded their carrying value by less than 10%. During the fourth quarter of 2023, the Company experienced a significant decline in its market capitalization. In addition, the Company made updates to certain long-term financial projections. Management deemed these factors to be triggering events related to the Company’s goodwill. The Company performed a quantitative interim impairment assessment as of December 31, 2023 and determined the carrying value of its Alternative Credential reporting unit exceeded its estimated fair value. As a result, during the three months ended December 31, 2023, the Company recorded impairment charges of $62.8 million to goodwill. This charge is included within operating expense on the Company’s consolidated statements of operations. The estimated fair value of the Degree Program reporting unit exceeded its carrying value by more than 10%. During the second quarter of 2024, the Company experienced a significant decline in its market capitalization. In addition, the Company updated its long-term financial projections in connection with contingency planning related to the Chapter 11 Cases. Management deemed these factors to be triggering events related to the Company’s goodwill. The Company performed a quantitative interim impairment assessment as of May 31, 2024 and determined the carrying value of its Alternative Credential reporting unit exceeded its estimated fair value. As a result, during the three and six months ended June 30, 2024, the Company recorded impairment charges of $339.9 million to goodwill. This charge is included within operating expense on the Company’s condensed consolidated statements of operations. The estimated fair value of the Degree Program reporting unit exceeded its carrying value by more than 10%. It is possible that future changes in circumstances or in the variables associated with the judgments, assumptions and estimates used in assessing the fair value of our reporting units, could require us to record additional impairment charges in the future. For each of the interim impairment assessments, the Company utilized a weighted combination of an income-based approach and market-based approach to determine the fair value of each reporting unit and an income-based approach to determine the fair value of its indefinite-lived intangible asset. Key assumptions used in the income-based approach included discount rates based upon each respective reporting unit’s or indefinite-lived intangible asset’s weighted-average cost of capital adjusted for the risk associated with the operations at the time of the assessment, terminal growth rates, forecasts of revenue and margins, and royalty rates. The income-based approach largely relied on inputs that were not observable to active markets, which would be deemed “Level 3” fair value measurements, as defined in the Fair Value Measurements section above. Key assumptions used in the market-based approach included the selection of appropriate peer group companies. Changes in the estimates and assumptions used to estimate fair value could materially affect the determination of fair value and the impairment test result. Convertible Senior Notes In April 2020, the Company issued the 2025 Notes in an aggregate principal amount of $380 million, including the exercise by the initial purchasers of an option to purchase additional 2025 Notes, in a private offering. Refer to Note 8 for more information regarding the 2025 Notes. In January 2023, the Company issued the 2030 Notes in an aggregate principal amount of $147.0 million in a private offering. Refer to Note 8 for more information regarding the 2030 Notes. Pursuant to 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 , the Company’s convertible senior notes are accounted for as a single instrument. Debt Issuance Costs Debt issuance costs are incurred as a result of entering into certain borrowing transactions and are presented as a reduction from the carrying amount of the debt liability on the Company’s condensed consolidated balance sheets. Debt issuance costs are amortized over the term of the associated debt instrument. The amortization of debt issuance costs is included as a component of interest expense on the Company’s condensed consolidated statements of operations and comprehensive loss. If the Company extinguishes debt prior to the end of the underlying instrument’s full term, some or all of the unamortized debt issuance costs may need to be written off, and a loss on extinguishment may need to be recognized. Refer to Note 8 for further information about the Company’s debt. Recent Accounting Pronouncements 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. On December 21, 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 . This ASU defers the sunset date from December 31, 2022 to December 31, 2024 and is effective immediately. The Company will adopt the standard when LIBOR is discontinued and does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU No 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This ASU requires annual and interim disclosures that are expected to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for fiscal years beginning after December 15, 2023 and should be adopted on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires new disclosures about income taxes, primarily focused on the disclosure of income taxes paid and the rate reconciliation table. The ASU is effective for annual periods beginning after December 15, 2024 and should be applied on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and related disclosures. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following tables present the changes in the carrying amount of goodwill by reportable segment on the Company’s condensed consolidated balance sheets for the periods indicated. Balance as of December 31, 2023 Impairment Charges* Foreign Currency Translation Adjustments Balance as of June 30, 2024 (in thousands) Degree Program Segment Gross goodwill $ 192,459 $ — $ — $ 192,459 Accumulated impairments — — — — Net goodwill 192,459 — — 192,459 Alternative Credential Segment Gross goodwill $ 687,880 $ — $ 314 $ 688,194 Accumulated impairments (228,841) (339,928) — (568,769) Net goodwill 459,039 (339,928) 314 119,425 Total Gross goodwill $ 880,339 $ — $ 314 $ 880,653 Accumulated impairments (228,841) (339,928) — (568,769) Net goodwill $ 651,498 $ (339,928) $ 314 $ 311,884 * Refer to Note 2 for further information about the goodwill impairment charges. The following table presents the components of intangible assets, net on the Company’s condensed consolidated balance sheets as of each of the dates indicated. June 30, 2024 December 31, 2023 Estimated Gross Accumulated Net Gross Accumulated Net (in thousands) Capitalized technology 3-5 $ 244,002 $ (173,765) $ 70,237 $ 245,867 $ (159,155) $ 86,712 Capitalized content development 4-5 228,337 (182,199) 46,138 233,592 (176,374) 57,218 University client relationships 9-10 176,677 (86,036) 90,641 208,823 (75,849) 132,974 Enterprise client relationships 10 14,300 (3,754) 10,546 14,300 (3,039) 11,261 Trade names and domain names* 5-25 278,072 (201,981) 76,091 284,810 (201,777) 83,033 Total intangible assets $ 941,388 $ (647,735) $ 293,653 $ 987,392 $ (616,194) $ 371,198 * During the three and six months ended June 30, 2024, the Company recorded impairment charges of $10.3 million to capitalized technology, $2.4 million to capitalized content development, $32.2 million to university client relationships, and $4.4 million to trade names and domain names. ** The Company concluded that due to changes in facts and circumstances, the edX trade name, which was classified as indefinite-lived as of June 30, 2023, is now finite-lived. In the third quarter of 2023, the Company began amortizing the trade name on a straight-line basis over its estimated useful life. The gross carrying amount of the edX trade name was $255.0 million as of both June 30, 2024 and December 31, 2023. Accumulated amortization and impairments include $181.1 million and $176.7 million of impairment charges related to the edX trade name as June 30, 2024 and December 31, 2023, respectively. Refer to Note 2 for further information about these impairment charges. The amounts presented in the table above include $39.4 million and $43.4 million of in-process capitalized technology and content development as of June 30, 2024 and December 31, 2023, respectively. The Company recorded amortization expense related to amortizable intangible assets of $22.3 million and $24.7 million for the three months ended June 30, 2024 and 2023, respectively, and $44.4 million and $51.9 million for the six months ended June 30, 2024 and 2023, respectively. The following table presents the estimated future amortization expense of the Company’s amortizable intangible assets placed in service as of June 30, 2024. Future Amortization Expense (in thousands) Remainder of 2024 $ 30,641 2025 52,452 2026 38,076 2027 26,542 2028 19,766 Thereafter 86,813 Total $ 254,290 |
Other Balance Sheet Details
Other Balance Sheet Details | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Other Balance Sheet Details | Other Balance Sheet Details Prepaid Expenses and Other Assets As of June 30, 2024 and December 31, 2023, the Company had balances of $23.1 million and $19.8 million, respectively, of prepaid assets within prepaid expenses and other assets on the condensed consolidated balance sheets. Other Assets, Non-current As of June 30, 2024 and December 31, 2023, the Company had balances of $13.8 million and $13.6 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 Accounts Payable and 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. June 30, 2024 December 31, 2023 (in thousands) Accrued university and instructional staff compensation $ 23,769 $ 28,339 Accrued marketing expenses 9,212 19,652 Accrued compensation and related benefits 6,835 9,870 Accounts payable and other accrued expenses 33,370 45,517 Total accounts payable and accrued expenses $ 73,186 $ 103,378 Other Current Liabilities As of June 30, 2024 and December 31, 2023, the Company had balances of $12.6 million and $10.5 million, respectively, within other current liabilities on the condensed consolidated balance sheets, which represent proceeds received from students enrolled in certain of the Company’s alternative credential offerings that are payable to an associated university client. As of June 30, 2024 and December 31, 2023, the Company had accrued interest balances of $13.5 million and $13.6 million, respectively, within other current liabilities on the condensed consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
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. 2U, Inc., et al. v. Cardona, et al. On April 4, 2023, the Company filed a lawsuit on behalf of itself and its South African subsidiary, Get Educated International Proprietary Ltd., against the Department of Education (the “Department”) and Secretary of Education Miguel Cardona. The suit challenges a Dear Colleague Letter issued by the Department that would treat the Company and other Online Program Managers (OPMs) as highly regulated “Third-Party Servicers” for purposes of the Higher Education Act (“HEA”). The Company contends that the Department has exceeded its authority by seeking to expand the definition of “Third-Party Servicer” contained in the HEA, 20 U.S.C. § 1088(c), as well as in the Department’s regulations and longstanding guidance documents. The Company also argues that the Department violated both the HEA and the Administrative Procedure Act in issuing its new understanding of Third-Party Servicer without following required rulemaking procedures. The case is now pending in the District of D.C., under case number 1:23-cv-00925. On April 7, 2023, the Company filed a motion for a stay and preliminary injunction to block the new Dear Colleague Letter to take effect as planned on September 1, 2023. On April 11, 2023, the Department announced that it would suspend the September 1, 2023 effective date and consider changes to the Dear Colleague Letter. The Department indicated that when it finalizes an updated version of the Dear Colleague Letter, the updated version will not go into effect for at least six months, to give regulated entities sufficient time to comply. Given these developments, the Company withdrew its motion for a stay and preliminary injunction and the court stayed the litigation pending the release of the finalized Dear Colleague Letter. On June 17, 2024, the parties filed a joint status report to the court, in which the government indicated that it was still in the process of developing an updated guidance, and that it did not anticipate issuing an updated guidance in the next 90 days. The Company believes that it has a meritorious claim and intends to vigorously pursue its challenge against the Department if the Department continues seeking to treat the Company as a Third-Party Servicer. Due to the complex nature of the legal issues involved, the outcome of this matter is not presently determinable. Francis v. 2U, Inc. et al; Privacy Class Action On October 10, 2023, plaintiff Chad Francis filed a putative class action against the Company and edX LLC in the United States District Court for the District of Massachusetts, alleging violations of the federal Video Privacy Protection Act. The plaintiff, who seeks to represent a class of individuals who viewed a video on edX while they had a Facebook account, alleges that 2U and edX disclosed his personal viewing information to Facebook without his consent. Plaintiff seeks damages of $2,500 for each violation, punitive damages, injunctive relief and attorney fees. On December 15, 2023, the Company and edX filed a motion to dismiss the complaint for failure to state a claim. The plaintiff filed a response on February 12, 2024, and the Company and edX filed a reply on March 13, 2024. While the motion to dismiss was pending before the Court, the Company and edX filed a Suggestion of Bankruptcy notifying the court of the recently filed Chapter 11 Cases. Upon the filing of the Suggestion of Bankruptcy notice, the court dismissed the action without prejudice. The court’s order further states that either party may bring a motion to restore the case docket, following final determination of the Chapter 11 Cases. In re: 2U, Inc., et al. Case No. 24-11279 (MEW) (Bankr. S.D.N.Y.) On July 25, 2024, the Debtors commenced voluntary cases under the Bankruptcy Code in the Bankruptcy Court providing for a court-administered reorganization pursuant to its prepackaged joint plan of reorganization. The Chapter 11 Cases are being jointly administered under the caption “In re: 2U, Inc., et al Case No. 24-11279 (MEW) (Bankr. S.D.N.Y.).” Beaumont v. 2U, Inc., et al; Securities Class Action On June 13, 2024, the Company, Christoper Paucek, Paul Lalljie, and Matt Norden were named as defendants in a putative securities class action filed in the United States District Court for the District of Maryland. The plaintiff Michael Beaumont, who seeks to represent a class of persons and entities that purchased or otherwise acquired 2U securities between February 9, 2022 and February 12, 2024, alleges that defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects, and, therefore, violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder. In addition, the plaintiff alleges that Messrs. Paucek, Lallije and Norden violated Section 20(a) of the Exchange Act. The plaintiff is seeking compensatory damages against the defendants, reasonable costs and expenses incurred in the action, and further relief as the Court may deem just and proper. On July 30, 2024, 2U filed a Suggestion of Bankruptcy and Imposition of Automatic Stay pursuant to Section 362(A) of the Bankruptcy Code. 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. De La Paz v. 2U, Inc., et al; Privacy Class Action On April 19, 2024, plaintiff Henry De la Paz filed a putative class action against the Company and edX LLC in the United States District Court for the District of Massachusetts, alleging violations of the federal Video Privacy Protection Act. The plaintiff, who seeks to represent a class of individuals who viewed a video on the edX mobile application, alleges that 2U and edX disclosed his personal viewing information to third parties. Plaintiff seeks damages of $2,500 for each violation, punitive damages, injunctive relief and attorney fees. On July 26, 2024, the Company and edX filed a Suggestion of Bankruptcy notifying the court of the recently filed voluntary petitions. Upon the filing of the Suggestion of Bankruptcy notice, the court dismissed the action without prejudice. The court’s order further states that either party may bring a motion to restore the case docket, following final determination of all bankruptcy proceedings. 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. Other Vendor Commitments In September 2023, as part of an effort to consolidate vendors to reduce the cost of launching programs, the Company entered into an agreement with an existing vendor to purchase content development and other services at more favorable pricing, with a total minimum commitment of $30.0 million through December 31, 2026. 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. The following table presents the estimated future minimum payments due to university clients as of June 30, 2024. Future Minimum Payments (in thousands) Remainder of 2024 $ 1,600 2025 3,500 2026 3,500 2027 3,500 2028 3,500 Thereafter — Total future minimum payments to university clients $ 15,600 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. |
Restructuring Charges
Restructuring Charges | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges During the second quarter of 2022, the Company accelerated its planned transition to a platform company (the “2022 Strategic Realignment Plan”). The plan was designed to reorient the Company around a single platform allowing it to pursue a portfolio-based marketing strategy that drives traffic to the edX marketplace. As part of the plan, the Company simplified its executive structure, reduced employee headcount, rationalized its real estate footprint and implemented steps to optimize marketing spend. During the third quarter of 2022, the Company completed the planned headcount reductions and consolidated its in-person operations to its offices in Lanham, Maryland and Cape Town, South Africa. In furtherance of the 2022 Strategic Realignment Plan, the Company reduced employee headcount during the third quarter of 2023. Restructuring charges related to the 2022 Strategic Realignment Plan were $2.7 million and $3.2 million for the three months ended June 30, 2024 and 2023, respectively, and $5.5 million and $7.7 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, the Company incurred cumulative restructuring charges of $61.2 million related to the 2022 Strategic Realignment Plan. The Company anticipates that it will incur aggregate restructuring charges associated with the 2022 Strategic Realignment Plan of approximately $70 million to $75 million. The majority of the estimated remaining restructuring charges relate to leased facilities and will be recognized as expense over the remaining lease terms, ranging from 1 to 7 years. On July 25, 2024, the Company took steps to reject several operating leases in connection with the Chapter 11 Cases. The Bankruptcy Court will assess these motions at a hearing scheduled for September 6, 2024. In late 2023, the Company announced leadership changes and commenced a comprehensive performance improvement exercise aimed at, among other things, further improving its profitability and optimizing its operating model and balance sheet. Part of this exercise includes headcount reductions associated with implementing changes to the Company’s organizational structure, as management works to align staffing levels with business priorities across functional areas. During the second quarter of 2024, the Company further reduced its occupancy in its Lanham, Maryland office. The following tables present restructuring charges by reportable segment on the Company’s condensed consolidated statements of operations for the periods indicated. Three Months Ended Three Months Ended Degree Program Segment Alternative Credential Segment Degree Program Segment Alternative Credential Segment (in thousands) Leadership and organizational structure changes Severance and severance-related costs $ 3,951 $ — $ — $ — Lease and lease-related charges 1,398 — — — 5,349 — — — 2022 Strategic Realignment Plan Severance and severance-related costs — — — — Lease and lease-related charges 1,956 717 2,129 682 Professional and other fees relating to restructuring activities — — 404 — Other* — — 13 — 1,956 717 2,546 682 Other restructuring charges** 384 — 373 21 Total restructuring charges $ 7,689 $ 717 $ 2,919 $ 703 Six Months Ended Six Months Ended Degree Program Segment Alternative Credential Segment Degree Program Segment Alternative Credential Segment (in thousands) Leadership and organizational structure changes Severance and severance-related costs $ 5,091 $ 308 $ — $ — Lease and lease-related charges 1,398 — — — 6,489 308 — — 2022 Strategic Realignment Plan Severance and severance-related costs — — 1,231 — Lease and lease-related charges 3,967 1,459 4,272 1,441 Professional and other fees relating to restructuring activities — 119 744 — Other* — — 26 — 3,967 1,578 6,273 1,441 Other restructuring charges** 791 — 753 30 Total restructuring charges $ 11,247 $ 1,886 $ 7,026 $ 1,471 * Includes the acceleration of certain technology and content development costs. ** Includes severance and severance-related costs and lease-related charges. Summary of Accrued Restructuring Liability The following table presents the additions and adjustments to the accrued restructuring liability on the Company’s condensed consolidated balance sheets for the periods indicated. Balance as of December 31, 2023 Additional Costs Cash Payments Balance as of June 30, 2024 (in thousands) Leadership and organizational structure changes Severance and severance-related costs $ 9,779 $ 5,025 $ (8,907) $ 5,897 2022 Strategic Realignment Plan Severance and severance-related costs 4,093 107 (3,595) 605 Professional and other fees relating to restructuring activities 363 191 (558) (4) Lease and lease-related charges 28 7,614 (7,214) 428 Other severance and severance-related costs 243 — (243) — Total restructuring $ 14,506 $ 12,937 $ (20,517) $ 6,926 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company leases facilities under non-cancellable operating leases primarily in the United States, South Africa, and the United Kingdom. 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 Six Months Ended 2024 2023 2024 2023 (in thousands) Operating lease expense $ 4,158 $ 4,346 $ 8,326 $ 8,803 Short-term lease expense 39 35 82 69 Variable lease expense 2,242 1,362 4,172 3,269 Sublease income (611) (481) (1,247) (908) Total lease expense $ 5,828 $ 5,262 $ 11,333 $ 11,233 As of June 30, 2024, for the Company’s operating leases, the weighted-average remaining lease term was 5.9 years and the weighted-average discount rate was 10.8%. For the six months ended June 30, 2024 and 2023, cash paid for amounts included in the measurement of operating lease liabilities was $12.3 million and $12.1 million, respectively. There were no lease liabilities arising from obtaining right-of-use assets for each of the six months ended June 30, 2024 and 2023. 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 $3.6 million in aggregate. June 30, 2024 (in thousands) Remainder of 2024 $ 12,016 2025 20,549 2026 21,107 2027 21,688 2028 17,214 Thereafter 33,051 Total lease payments 125,625 Less: imputed interest (34,612) Total lease liability $ 91,013 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
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. June 30, 2024 December 31, 2023 (in thousands) Term loan facilities $ 374,300 $ 376,200 Revolving facility 40,000 40,000 Convertible senior notes 527,000 527,000 Deferred government grant obligations 3,500 3,500 Other borrowings 1,111 1,699 Less: unamortized debt discount and issuance costs (37,613) (43,670) Total debt 908,298 904,729 Less: current portion of long-term debt (908,298) (8,215) Total long-term debt $ — $ 896,514 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 2025 Notes, which had an estimated fair value of $205.2 million and $191.7 million as of June 30, 2024 and December 31, 2023, respectively, and the 2030 Notes, which had an estimated fair value of $48.5 million and $55.0 million as of June 30, 2024 and December 31, 2023, 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 On January 9, 2023, the Company entered into an Extension Amendment, Second Amendment and First Incremental Agreement to Credit and Guaranty Agreement, dated as of January 9, 2023 (the “Second Amended Credit Agreement”), which amended the Company’s existing term loan facilities, previously referred to as the Amended Term Loan Facilities. The provisions of the Second Amended Credit Agreement became effective upon the satisfaction of certain conditions set for therein, including, without limitation, the funding of the 2030 Notes referenced below and the prepayment of certain existing term loans to reduce the outstanding principal amount of term loans outstanding under the Amended Term Loan Facilities from $567 million to $380 million. Pursuant to the Second Amended Credit Agreement, the lenders thereunder agreed to, among other amendments, extend the maturity date of the term loans thereunder from December 28, 2024 to December 28, 2026 (or, if more than $40 million of the Company’s 2025 Notes remain outstanding on January 30, 2025, January 30, 2025) and to provide a senior secured first lien revolving loan facility to the Company in the principal amount of $40 million (the “Revolving Loan Facility”). The termination date for such revolving loans will be June 28, 2026 (or, if more than $50 million of the Company’s 2025 Notes remain outstanding on January 1, 2025, January 1, 2025). As of June 30, 2024, outstanding borrowings under the Revolving Loan Facility were $40 million. In addition, our Second Amended Credit Agreement includes a financial covenant that requires the Company to maintain $900 million minimum Recurring Revenues (as defined by the Second Amended Credit Agreement) as of the last day of any period of four consecutive fiscal quarters, commencing with the fiscal quarter ending September 30, 2021 through the maturity date. The Recurring Revenue for the four consecutive quarters ending June 30, 2024 was less than $900 million and accordingly the Company was not in compliance with the covenants under the Second Amended Credit Agreement. Loans under the Second Amended Credit Agreement bear interest at a per annum rate equal to (i) with respect to term loans, a base rate or the Term SOFR (as defined in the Second Amended Credit Agreement) rate, as applicable, plus a margin of 5.50% in the case of the base rate loans and 6.50% in the case of Term SOFR loans and (ii) with respect to revolving loans, a base rate or the Term SOFR rate, as applicable, plus a margin of 4.50% in the case of the base rate loans and 5.50% in the case of Term SOFR loans. If the term loans under the Second Amended Credit Agreement are prepaid or amended prior to the six month anniversary of the Second Amended Credit Agreement in connection with a Repricing Event (as defined in the Second Amended Credit Agreement), the Company shall pay a prepayment premium of 1.0% of the amount of the loans so prepaid. Prior to the amendment, loans under the Amended Term Loan Facilities bore 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 Company is required to make quarterly principal repayments equal to 0.25% of the aggregate principal amount. The obligations under the Second Amended Credit Agreement are guaranteed by certain of the Company’s subsidiaries (the Company and the guarantors, collectively, the “Credit Parties”). The obligations under the Second Amended Credit 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 Second Amended Credit 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 Second Amended Credit 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 Second Amended Credit Agreement contains (i) a financial covenant for the benefit of the lenders that requires the Company to maintain minimum Recurring Revenues (as defined in the Second Amended Credit 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 and (ii) three financial covenants solely for the benefit of the revolving lenders, in respect of a maximum consolidated senior secured net leverage ratio, a maximum consolidated total net leverage ratio, and a minimum consolidated fixed charge coverage ratio. The Second Amended Credit 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 Second Amended Credit Agreement); failure of any material provision of the Second Amended Credit Agreement or any guaranty to remain in full force and effect; a change of control of the Company; and material judgment defaults. If an event of default under the Second Amended Credit Agreement occurs and is continuing, then, at the request (or with the consent) of the lenders holding the applicable requisite amount of commitments and loans under the Second Amended Credit Agreement, upon notice by the administrative agent to the borrowers, the obligations under the Second Amended Credit 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 Second Amended Credit Agreement will automatically become immediately due and payable. The commencement of the Chapter 11 Cases constitutes an event of default or termination event under all debt agreements of the Company. Refer to Note 15 for further discussion of the Chapter 11 Cases. As of June 30, 2024 and December 31, 2023, the balance of unamortized debt discount and issuance costs related to the term loan under the Second Amended Credit Agreement was $18.2 million and $21.7 million, respectively. The associated effective interest rate for the term loan under the Second Amended Credit Agreement was approximately 14.5% and 14.4%, for the three months ended June 30, 2024 and 2023, respectively, and approximately 14.5% and 14.1%, for the six months ended June 30, 2024 and 2023, respectively. The associated interest rate for the revolving loan under the Second Amended Credit Agreement was approximately 10.8% and 10.6%, for the three months ended June 30, 2024 and 2023, respectively, and approximately 10.9% and 10.6%, for the six months ended June 30, 2024 and 2023, respectively. The associated interest expense for these facilities was approximately $14.3 million and $13.3 million for the three months ended June 30, 2024 and 2023, respectively, and $28.4 million and $26.5 million for the six months ended June 30, 2024 and 2023, respectively. Convertible Senior Notes 2025 Notes In April 2020, the Company issued the 2025 Notes in an aggregate principal amount of $380 million, including the exercise by the initial purchasers of an option to purchase additional 2025 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 2025 Notes were approximately $369.6 million after deducting the initial purchasers’ discounts, commissions and offering expenses payable by the Company. The 2025 Notes are governed by the 2025 Indenture. The 2025 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 2025 Notes will mature on May 1, 2025, unless earlier repurchased, redeemed or converted and contain a cross-acceleration provision tied to the acceleration of other material debt, including the Second Amended Credit Agreement and the 2030 Notes. The 2025 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 2025 Notes, effectively subordinated to the Company’s senior secured indebtedness (including indebtedness under the Second Amended Credit Agreement), 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. The net carrying amount of the 2025 Notes consists of the following as of each of the dates indicated: June 30, 2024 December 31, 2023 (in thousands) Principal $ 380,000 $ 380,000 Unamortized issuance costs (1,757) (2,807) Net carrying amount $ 378,243 $ 377,193 Issuance costs are being amortized to interest expense over the contractual term of the 2025 Notes. Subsequent to the adoption of ASU 2020-06 in the first quarter of 2022, the effective interest rate used to amortize the issuance costs was 2.9%. The interest expense related to the 2025 Notes was $2.6 million and $2.6 million for the three months ended June 30, 2024 and 2023, respectively, and $5.3 million and $5.3 million for the six months ended June 30, 2024 and 2023, respectively. Holders may convert their 2025 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 2025 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 2025 Indenture; • if the Company calls such 2025 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 2025 Notes is 35.3773 shares of the Company’s common stock per $1,000 principal amount of 2025 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 2025 Indenture. Following the Reverse Stock Split, the conversion rate for the 2025 Notes is 1.1792 shares of the Company’s common stock per $1,000 principal amount of 2025 Notes. 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 2025 Notes for redemption or the holders of the 2025 Notes electing to convert their 2025 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 2025 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 2025 Indenture), holders of the 2025 Notes may require the Company to repurchase their 2025 Notes at a cash repurchase price equal to the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest, if any. The 2025 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 2025 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 2025 Notes. As of June 30, 2024, the conditions allowing holders of the 2025 Notes to convert had not been met and the Company has the right under the 2025 Indenture to determine the method of settlement at the time of conversion. In connection with the 2025 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 2025 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2025 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. On July 25, 2024, the Company was notified by the counterparties that, as a result of the Company’s bankruptcy filing, the counterparties had terminated the Capped Call Transactions. In April 2020, the Company used a portion of the proceeds from the sale of the 2025 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 2025 Notes for working capital or other general corporate purposes, which may include capital expenditures, potential acquisitions and strategic transactions. 2030 Notes On January 11, 2023, the Company issued the 2030 Notes in an aggregate principal amount of $147.0 million. The 2030 Notes are governed by the 2030 Indenture. The 2030 Notes bear interest at a rate of 4.50% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2023. The 2030 Notes mature on February 1, 2030, unless earlier redeemed or repurchased by the Company or converted and contain a cross-acceleration provision tied to the acceleration of other material debt, including the Second Amended Credit Agreement and the 2025 Notes. The net proceeds from the issuance of the 2030 Notes was $127.1 million. The 2030 Notes are the senior, unsecured obligations of the Company and are equal in right of payment with the Company’s senior indebtedness, senior in right of payment to the Company’s indebtedness that is expressly subordinated to the 2030 Notes, effectively subordinated to the Company’s senior secured indebtedness, 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. The net carrying amount of the 2030 Notes consist of the following as of the date indicated: June 30, 2024 December 31, 2023 (in thousands) Principal $ 147,000 $ 147,000 Unamortized debt discount and issuance costs (17,662) (19,136) Net carrying amount $ 129,338 $ 127,864 Issuance costs are being amortized to interest expense over the contractual term of the 2030 Notes. The effective interest rate used to amortize the issuance costs was approximately 7.5% for each of the three and six months ended June 30, 2024. The interest expense related to the 2030 Notes was $2.4 million and $2.3 million for the three months ended June 30, 2024 and 2023, respectively, and $4.8 million and $4.3 million for the six months ended June 30, 2024 and 2023, respectively. Holders may convert their 2030 Notes at their option in the following circumstances: • at any time from, and after January 11, 2023 until the close of business on the second scheduled trading day immediately before the maturity date; • upon the occurrence of certain corporate events or distributions on the Common Stock as provided in the Indenture; • if the Company calls such 2030 Notes for redemption; subject to the right of certain holders to elect a delayed conversion period for any such 2030 Notes called for redemption that would cause such holders to beneficially own shares of Common Stock, in excess of the Ownership Cap (as defined in the 2030 Indenture), over which threshold a settlement of such conversion could be made in cash; and • upon the occurrence of a default with regard to the Company’s financial covenants under the 2030 Indenture. The initial conversion rate for the 2030 Notes is 111.1111 shares of Common Stock per $1,000 principal amount of 2030 Notes, which represents an initial conversion price of approximately $9.00 per share, and is subject to adjustment upon the occurrence of certain specified events as set forth in the 2030 Indenture. Following the Reverse Stock Split, the conversion rate for the 2030 Notes is 3.7037 shares of the Company’s common stock per $1,000 principal amount of 2030 Notes. Upon conversion, the Company will pay or deliver, as applicable, cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Company’s election (subject to aforementioned Ownership Cap). Upon the occurrence of a “Make-Whole Fundamental Change” (as defined in the 2030 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 2030 Indenture), holders of the 2030 Notes may require the Company to repurchase their 2030 Notes at a cash repurchase price equal to the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid interest, if any. The 2030 Notes are redeemable, in whole or in part, at the Company’s option at any time, and from time to time, subject to limited exceptions with respect to 2030 Notes that cannot be immediately physically settled due to the Ownership Cap, on or after January 11, 2026 and on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of Common Stock exceeds 130% of the conversion price on 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. 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 2030 Notes. The Company used cash on hand and the proceeds from the offering of the 2030 Notes to repay a portion of the amounts outstanding under the Amended Term Loan Facilities. The Company has the right under the 2030 Indenture to determine the method of settlement at the time of conversion. The filing of the Chapter 11 Cases constituted an event of default under the Debt Instruments that accelerated obligations under the Debt Instruments. The Debt Instruments provide that, as a result of the Chapter 11 Cases, the principal and interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments are automatically stayed as a result of the Chapter 11 Cases and the holders’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code. Pursuant to the RSA, the Consenting Lenders have committed to amend and restate the Second Amended Credit Agreement to provide for, among other things, a new maturity date for the borrowings thereunder of the date that is 27 months following the effective date of the Plan. Deferred Government Grant Obligations The Company has 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. The conditional loan with Prince George’s County has a maturity date of June 22, 2027 and the conditional loan agreement with the State of Maryland has a maturity date of June 30, 2028. The interest expense related to these loans for the three and six months ended June 30, 2024 and 2023 was immaterial. Letters of Credit Certain of the Company’s operating lease agreements entered into require security deposits in the form of cash or an unconditional, irrevocable letter of credit. As of June 30, 2024, the Company has entered into standby letters of credit totaling $11.7 million as security deposits for the applicable leased facilities and in connection with the deferred government grant obligations. The Company maintains restricted cash as collateral for standby letters of credit for the Company’s leased facilities and in connection with the deferred government grant obligations. Debt Refinancing Costs In January 2023, the Company entered into the Second Amended Credit Agreement, which amended the Amended Term Loan Facilities. Certain investors in the Amended Term Loan Facilities participated in the Second Amended Credit Agreement and the change in the present value of future cash flows between the investments was less than 10%. Accordingly, the Company accounted for this refinancing event for these investors as a debt modification. Certain investors in the Amended Term Loan Facilities did not participate in the Second Amended Credit Agreement or the change in the present value of future cash flows between the investments was greater than 10%. Accordingly, the Company accounted for this refinancing event for these investors as a debt extinguishment. In applying debt modification accounting in connection with this refinancing event, during the first quarter of 2023, the Company recorded $12.1 million in loss on debt extinguishment and $4.6 million in debt modification expense. Impact of the Chapter 11 Cases on Debt The commencement of the Chapter 11 Cases constitutes an event of default or termination event under all debt agreements of the Company. Accordingly, all long-term debt was classified as current on the condensed consolidated balance sheets as of June 30, 2024. However, any efforts to enforce payment obligations related to the Company’s outstanding debt have been automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. Refer to Note 15 for further discussion of the Chapter 11 Cases. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
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 provision for the three and six months ended June 30, 2024 and 2023 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 six months ended June 30, 2024 and 2023 was less than 1%. For the three months ended June 30, 2024, the Company’s income tax benefit was insignificant. For the three months ended June 30, 2023, the Company’s income tax expense was $0.2 million. For the six months ended June 30, 2024 and 2023, the Company’s income tax expense was $0.2 million and $0.3 million, respectively. 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 | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Reverse Stock Split On May 20, 2024, the Company’s stockholders voted to approve amendments to the Company’s Certificate of Incorporation, to effect a reverse stock split of all of the outstanding shares of the Company’s common stock, par value $0.001 per share, at a ratio ranging from any whole number between 1-for-10 and 1-for-40, with the exact ratio within such range to be determined by the Company’s Board in its discretion, subject to the Board’s authority to abandon such amendments. On June 5, 2024, the Board approved the amendment to the Certificate of Incorporation effecting the Reverse Stock Split at a ratio of 1-for-30 and abandoned all other amendments to the Certificate of Incorporation previously approved by the Board and the Company’s stockholders. On June 13, 2024, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split. The Reverse Stock Split became effective on June 13, 2024 and trading on the Nasdaq Global Select Market on a post-split basis began on June 14, 2024. Following the Reverse Stock Split, the number of authorized shares of the Company’s common stock remained at 200,000,000. The Reverse Stock Split reduced the total number of issued and outstanding shares of common stock from 82,260,619 to 2,741,980 as of December 31, 2023. The par value of the Company’s common stock remained at $0.001. All per share amounts and common shares have been adjusted on a retrospective basis to reflect the Reverse Stock Split for all periods. In addition, common stock decreased by $0.1 million and additional paid-in capital increased by $0.1 million in the condensed consolidated statement of changes in stockholders’ equity as of both June 30, 2024 and December 31, 2023. The Company’s stockholders’ equity, in the aggregate, remained unchanged following the Reverse Stock Split. Per share net loss increased because there were fewer shares of the Company’s common stock outstanding. There were no other accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, that arose as a result of the Reverse Stock Split. No fractional shares were issued in conjunction with the Reverse Stock Split. Instead, stockholders who would otherwise have been entitled to receive fractional shares as a result of the Reverse Stock Split received a cash payment in lieu thereof at a price equal to the fraction to which the stockholder would otherwise be entitled multiplied by the closing sales price per share of the common stock (as adjusted for the Reverse Stock Split) on the Nasdaq Global Select Market on June 13, 2024. These cash payments were immaterial to the Company’s condensed consolidated financial statements. The Reverse Stock Split impacted all stockholders uniformly and did not affect any stockholder’s percentage of ownership or proportionate voting power other than very minor impacts from the treatment of fractional shares. Common Stock As of June 30, 2024, 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 June 30, 2024, there were 2,805,301 shares of common stock outstanding, and the Company had reserved a total of 1,502,497 of its authorized shares of common stock for future issuance as follows: Shares Reserved for Future Issuance Outstanding restricted stock units 88,226 Outstanding performance restricted stock units 77,112 Outstanding stock options 100,058 Reserved for convertible senior notes 1,237,101 Total shares of common stock reserved for future issuance 1,502,497 Stock-Based Compensation The Company maintains a stock-based compensation plan: the Amended and Restated 2014 Equity Incentive Plan (the “2014 Plan”), which became effective in January 2014. The shares available for future issuance under the 2014 Plan increased by 137,101 and 130,557 on January 1, 2024 and 2023, 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 second quarter of 2023, shares available for purchase under the ESPP increased by 66,666 shares, pursuant to an amendment to the Company’s ESPP to increase the number of authorized shares available under such plan. With the commencement of the Chapter 11 Cases, the Company does not expect to continue to maintain the ESPP and the operation of the ESPP was suspended in July 2024. The following table presents stock-based compensation expense related to the 2014 Plan 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 Six Months Ended 2024 2023 2024 2023 (in thousands) Curriculum and teaching $ 95 $ 51 $ 135 $ 91 Servicing and support 1,118 2,239 2,592 5,516 Technology and content development 393 1,960 1,002 3,617 Marketing and sales 695 1,369 1,208 2,523 General and administrative 2,210 5,364 4,898 13,799 Total stock-based compensation expense $ 4,511 $ 10,983 $ 9,835 $ 25,546 Restricted Stock Units The 2014 Plan provides for the issuance of restricted stock units (“RSUs”) to eligible participants. Restricted stock units are generally subject to service-based vesting conditions and vest at various times from the date of grant, with most RSUs vesting in equal quarterly or annual tranches, generally over a period of three years. The following table presents a summary of the Company’s RSU activity, adjusted on a retroactive basis to reflect the Reverse Stock Split, for the period indicated. No RSUs were granted during the six months ended June 30, 2024. Number of Weighted- Outstanding balance as of December 31, 2023 152,911 $ 244.00 Granted — — Vested (41,006) 282.01 Forfeited (23,679) 210.69 Outstanding balance as of June 30, 2024 88,226 $ 235.27 The total fair value of RSUs vested during the three months ended June 30, 2024 and 2023 was $0.2 million and $7.9 million, respectively. The total fair value of RSUs vested during the six months ended June 30, 2024 and 2023 was $0.9 million and $13.1 million, respectively. The total compensation cost related to the unvested RSUs not yet recognized as of June 30, 2024 was $12.2 million, and will be recognized over a weighted-average period of approximately 1.3 years. Performance Restricted Stock Units The 2014 Plan provides for the issuance of performance restricted stock units (“PRSUs”) to eligible participants. PRSUs generally include both service conditions and market conditions related to total shareholder return targets relative to that of companies comprising the Russell 3000 Index and/or conditions based on the Company’s internal financial performance achieving predetermined targets. The terms of the performance restricted stock unit grants under the 2014 Plan, including the vesting periods, are determined by the Company’s Board or the compensation committee thereof. During the first quarter of 2022, as part of its annual equity awards cycle, the Company awarded 56,163 PRSUs with an aggregate intrinsic value of $20.4 million. The PRSU award agreements provide that the quantity of units subject to vesting may range from 200% to 0% of the granted quantities, depending on the achievement of internal financial performance-based targets, which are established annually. Certain of these PRSUs vest at the end of all three one-year performance periods, while others vest at the end of each of three one-year performance periods. Of the PRSUs awarded, 18,721 were granted in March 2022 with a weighted-average grant date fair value per share of $323.10, 18,721 were granted in February 2023 with a weighted-average grant date fair value per share of $334.65, and 11,147 were granted in February 2024 with a weighted-average grant date fair value of $11.97. The expense recognized each period is estimated at the time of grant and is subject to fluctuation due to the achievement of internal financial performance-based targets. For the first and second performance periods, 100% and 27.8% of the eligible PRSUs were earned, respectively. During the first quarter of 2023, as part of its annual equity award cycle, the Company awarded 46,722 PRSUs with an aggregate intrinsic value of $12.2 million. The PRSU award agreements provide that the quantity of units subject to vesting may range from 150% to 0% of the granted quantities. For the first performance period, which began on January 1, 2023 and ended on December 31, 2023, and the second performance period, which began on January 1, 2024 and ends on December 31, 2024, the quantity of units eligible to be earned ranges from 130% to 0% depending on the achievement of internal financial performance-based targets, which are established annually. Additionally, the actual number of PRSUs earned may be adjusted upward or downward by 20% based upon the Company’s total shareholder return (“TSR”) performance compared to the Russell 3000 Index’s TSR performance over the same period. If the Company’s absolute TSR is negative, the TSR multiplier cannot exceed 0% and the achievement percentage based up on the internal financial performance-based targets is capped at 125%. Of the PRSUs awarded, 15,573 were granted in March 2023 with a weighted-average grant date fair value per share of $214.50 and 14,413 were granted in February 2024 with a weighted-average grant date fair value per share of $11.94. These include the fair values per share of the TSR-performance component of the awards, which were determined using a Monte Carlo valuation model, and were $11.70 and $0.00 per share for the first and second performance periods, respectively. For the first performance period, 0% of the eligible PRSUs were earned. During the first quarter of 2024, as part of a one-time award cycle, the Company granted 24,999 PRSUs with a grant date fair value per share of $14.70. The PRSU award agreements provide that the awards are eligible to vest upon the 30-day average stock price of the Company attaining at least $300.00 on or prior to the two-year anniversary of the grant date. The following tables present a summary of (i) for the six months ended June 30, 2024 and 2023, the assumptions used for estimating the fair values of the TSR-performance component of the PRSUs, and (ii) for the six months ended June 30, 2024, the assumptions used for estimating the fair value of the PRSUs subject to market-based vesting conditions. As of June 30, 2024 and December 31, 2023, there were 14,036 and 40,910 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 June 30, 2024 and December 31, 2023, and have been excluded from the tables below. No PRSUs were granted during each of the three months ended June 30, 2024 and 2023. Six Months Ended 2024 2023 Risk-free interest rate 5.11% 4.68% Expected term (years) 1.00 1.00 Expected volatility 162% 108% Dividend yield 0% 0% Six Months Ended Risk-free interest rate 4.33% Expected term (years) 1.30 Expected volatility 126% Dividend yield 0% The following table presents a summary of the Company’s PRSU activity, adjusted on a retroactive basis to reflect the Reverse Stock Split, for the period indicated. Number of Weighted- Outstanding balance as of December 31, 2023 27,695 $ 403.04 Granted 59,293 13.12 Vested — — Forfeited (9,876) 11.98 Outstanding balance as of June 30, 2024 77,112 $ 153.31 The total compensation expense related to the unvested PRSUs not yet recognized as of June 30, 2024 was $1.2 million, and will be recognized over a weighted-average period of approximately 1.0 years. Stock Options The 2014 Plan provides for the issuance of stock options to eligible participants. Stock options issued under the 2014 Plan generally are exercisable for periods not to exceed 10 years and generally vest over a three-year period. The following table summarizes the assumptions used for estimating the fair value of the stock options granted for the period presented. No stock options were granted during the six months ended June 30, 2024 or the three months ended June 30, 2023. Six Months Ended Risk-free interest rate 3.6% Expected term (years) 5.69 Expected volatility 87% Dividend yield 0% Weighted-average grant date fair value per share $147.90 The following table presents a summary of the Company’s stock option activity, adjusted on a retroactive basis to reflect the Reverse Stock Split, for the period indicated. Number of Weighted-Average Weighted-Average Aggregate Outstanding balance as of December 31, 2023 135,176 $ 838.34 4.63 $ — Granted — — 0.00 Exercised — — 0.00 Forfeited (4,787) 305.40 Expired (30,331) 592.77 Outstanding balance as of June 30, 2024 100,058 938.27 4.62 — Exercisable as of June 30, 2024 85,523 $ 1,025.12 4.16 $ — The aggregate intrinsic value of options exercised during the six months ended June 30, 2023 was $0.1 million. The total unrecognized compensation cost related to the unvested options as of June 30, 2024 was $2.0 million, and will be recognized over a weighted-average period of approximately 0.6 years. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2024 | |
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 Six Months Ended 2024 2023 Stock options 100,058 161,760 Restricted stock units 88,226 212,283 Performance restricted stock units 77,112 87,485 Shares related to convertible senior notes 992,556 992,556 Total antidilutive securities (1) 1,257,952 1,454,084 (1) Amounts have been adjusted to reflect the Reverse Stock Split that became effective on June 13, 2024. Refer to Note 2 for further information about the Reverse Stock Split. 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 Six Months Ended 2024 2023 2024 2023 Numerator (in thousands): Net loss $ (452,440) $ (173,654) $ (507,089) $ (227,716) Denominator: Weighted-average shares of common stock outstanding, basic and diluted (1) 2,804,924 2,685,645 2,793,262 2,664,889 Net loss per share, basic and diluted (1) $ (161.30) $ (64.66) $ (181.54) $ (85.45) (1) Amounts have been adjusted to reflect the Reverse Stock Split that became effective on June 13, 2024. Refer to Note 2 for further information about the Reverse Stock Split. |
Segment and Geographic Informat
Segment and Geographic Information | 6 Months Ended |
Jun. 30, 2024 | |
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 executive education programs and technical skills-based boot camps provided through relationships with nonprofit colleges, universities, and other leading organizations. Significant Customers For each of the three and six months ended June 30, 2024 and 2023, no university client accounted for 10% or more of the Company’s consolidated revenue. As of June 30, 2024, no university client accounted for 10% or more of the Company’s consolidated accounts receivable, net balance. As of December 31, 2023, two university clients in the Degree Program Segment accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, as follows: $36.4 million and $14.3 million, which equaled 31% and 12% 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 Six Months Ended 2024 2023 2024 2023 (dollars in thousands) Revenue by segment* Degree Program Segment $ 101,978 $ 119,494 $ 213,524 $ 259,974 Alternative Credential Segment 78,705 102,595 165,536 200,619 Total revenue $ 180,683 $ 222,089 $ 379,060 $ 460,593 Segment profitability** Degree Program Segment $ 28,655 $ 33,111 $ 60,640 $ 80,315 Alternative Credential Segment (9,260) (11,319) (23,950) (28,332) Total segment profitability $ 19,395 $ 21,792 $ 36,690 $ 51,983 Segment profitability margin*** Degree Program Segment 28.1 % 27.7 % 28.4 % 30.9 % Alternative Credential Segment (11.8) (11.0) (14.5) (14.1) Total segment profitability margin 10.7 % 9.8 % 9.7 % 11.3 % * The Company has excluded immaterial amounts of intersegment revenues from each of the three and six months ended June 30, 2024 and 2023. ** 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, transaction costs, integration costs, professional fees associated with the Chapter 11 Cases, performance improvement initiative implementation expense, restructuring-related costs, stockholder activism costs, certain litigation-related costs, consisting of fees for certain non-ordinary course litigation and other proceedings, impairment charges, debt modification expense and 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 Six Months Ended 2024 2023 2024 2023 (in thousands) Net loss $ (452,440) $ (173,654) $ (507,089) $ (227,716) Adjustments: Stock-based compensation expense 4,511 10,983 9,835 25,546 Other expense (income), net 1,428 (227) 9,832 (834) Net interest expense 19,012 17,545 37,702 35,137 Income tax (benefit) expense (40) 210 193 323 Depreciation and amortization expense 24,886 27,328 49,572 57,348 Impairment charges 396,149 134,117 396,149 134,117 Debt modification expense and loss on debt extinguishment — — — 16,735 Restructuring charges 8,406 3,622 13,133 8,497 Other* 17,483 1,868 27,363 2,830 Total adjustments 471,835 195,446 543,779 279,699 Total segment profitability $ 19,395 $ 21,792 $ 36,690 $ 51,983 * Includes (i) transaction and integration costs of $0.0 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, and $0.3 million and $0.2 million for the six months ended June 30, 2024 and 2023, respectively, (ii) litigation-related costs of $1.6 million and $1.8 million for the three months ended June 30, 2024 and 2023, respectively, and $4.2 million and $2.6 million for the six months ended June 30, 2024 and 2023, respectively, and (iii) professional fees associated with the Chapter 11 Cases and performance improvement initiative implementation expense of $15.9 million and $0.0 million for the three months ended June 30, 2024 and 2023, respectively, and $22.9 million and $0.0 million for the six months ended June 30, 2024 and 2023, respectively. The following table presents the Company’s total assets by segment as of each of the dates indicated. June 30, December 31, (in thousands) Total assets Degree Program Segment $ 283,664 $ 377,395 Alternative Credential Segment 640,650 1,082,288 Total assets $ 924,314 $ 1,459,683 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 $25.1 million and $28.8 million for the three months ended June 30, 2024 and 2023, respectively, and $53.5 million and $59.5 million for the six months ended June 30, 2024 and 2023, 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 June 30, 2024 and December 31, 2023 totaled approximately $3.1 million and $3.5 million, respectively. |
Receivables and Contract Liabil
Receivables and Contract Liabilities | 6 Months Ended |
Jun. 30, 2024 | |
Receivables And Contract Liabilities Disclosure [Abstract] | |
Receivables and Contract Liabilities | Receivables and Contract Liabilities Trade Accounts Receivable The Company’s trade accounts receivable balances relate to amounts due from students or customers occurring in the normal course of business. Trade accounts 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 following table presents the Company’s trade accounts receivable in each segment as of each of the dates indicated. June 30, December 31, (in thousands) Degree Program Segment accounts receivable $ 16,912 $ 3,207 Degree Program Segment unbilled revenue 26,372 72,525 Alternative Credential Segment accounts receivable 34,092 47,455 Total 77,376 123,187 Less: Provision for credit losses (6,038) (7,243) Trade accounts receivable, net $ 71,338 $ 115,944 The Company regularly reviews its portfolio of offerings for alignment with its business objectives, including cost to operate, expected enrollments, and other factors, and from time to time, the Company has entered into, and may in the future enter into, agreements to strategically exit certain programs. As of June 30, 2024 and December 31, 2023, the Company had balances of $9.9 million and $68.2 million, respectively, of unbilled revenue associated with portfolio management activities within accounts receivable, net on the condensed consolidated balance sheets. In addition, as of June 30, 2024 and December 31, 2023, the Company had balances of $0.5 million and $16.9 million, respectively, of non-current accounts receivable associated with portfolio management activities within other assets, non-current on the condensed consolidated balance sheets. These non-current accounts receivable are typically due within 12 to 24 months. In January 2024, the Company entered into a receivables factoring transaction whereby a counterparty committed to purchase certain receivables owing to the company related to portfolio management activities at a purchase rate of 88% (the “Factoring Agreement”). Under the Factoring Agreement, the Company could sell eligible receivables without recourse in exchange for cash. In accordance with ASC 860 Transfers and Servicing of Financial Assets , the sold receivables were derecognized from the Company’s balance sheet. The fair value of the sold receivables approximated their book value due to their short-term nature. Proceeds from the sale of receivables are reflected as cash flows from operating activities on the condensed consolidated statement of cash flows. In the first quarter of 2024, the Company sold, without recourse, $82.1 million of receivables under the Factoring Agreement, with net proceeds of $74.0 million. The loss on the sale of these receivables of $8.1 million is included within other income (expense), net on the Company’s condensed consolidated statements of operations. The following table presents the change in provision for credit losses for trade accounts receivable on the Company’s condensed consolidated balance sheets for the period indicated. Provision for Credit Losses (in thousands) Balance as of December 31, 2023 $ 7,243 Current period provision 1,450 Amounts written off (2,651) Foreign currency translation adjustments (4) Balance as of June 30, 2024 $ 6,038 Other Receivables The Company’s other receivables are comprised of amounts due under tuition payment plans with extended payment terms from students enrolled in certain 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 range from 12 to 42 months 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. The following table presents the components of the Company’s other receivables, net, as of each of the dates indicated. June 30, December 31, (in thousands) Other receivables, amortized cost $ 48,642 $ 49,358 Less: Provision for credit losses (9,476) (8,558) Other receivables, net $ 39,166 $ 40,800 Other receivables, net, current $ 23,819 $ 28,293 Other receivables, net, non-current $ 15,347 $ 12,507 The following table presents the change in provision for credit losses for other receivables on the Company’s condensed consolidated balance sheets for the period indicated. Provision for Credit Losses (in thousands) Balance as of December 31, 2023 $ 8,558 Current period provision 918 Balance as of June 30, 2024 $ 9,476 The Company considers receivables to be past due when amounts contractually due under the extended payment plans have not been paid. As of June 30, 2024, 68% of other receivables, net due under extended payment plans were current. At the time of origination, the Company categorizes its other receivables using a credit quality indicator based on the credit tier rankings obtained from the third-party providers that manage and service the payment plans. The third-party providers utilize credit rating agency data to determine the credit tier rankings. The Company monitors the collectability of its other receivables on an ongoing basis. The adequacy of the allowance for credit losses is determined through analysis of multiple factors, including industry trends, portfolio performance, and delinquency rates. The following tables present other receivables, at amortized cost including interest accretion, by credit quality indicator and year of origination, as of the dates indicated. June 30, 2024 Year of Origination 2024 2023 2022 2021 2020 & Prior Total (in thousands) Credit Quality Tier High $ 5,216 $ 5,966 $ 1,147 $ 366 $ 1,023 $ 13,718 Mid 6,392 7,237 2,853 1,609 2,538 20,629 Low 4,327 4,224 2,037 1,574 2,133 14,295 Total $ 15,935 $ 17,427 $ 6,037 $ 3,549 $ 5,694 $ 48,642 December 31, 2023 Year of Origination 2023 2022 2021 2020 2019 & Prior Total (in thousands) Credit Quality Tier High $ 12,744 $ 1,229 $ 404 $ 311 $ 205 $ 14,893 Mid 13,178 3,067 2,614 735 674 20,268 Low 7,658 2,464 2,684 734 657 14,197 Total $ 33,580 $ 6,760 $ 5,702 $ 1,780 $ 1,536 $ 49,358 Contract Liabilities The Company’s deferred revenue represents contract liabilities. The Company generally receives payments from Degree Program Segment university clients early in each academic term and from Alternative Credential Segment students, either in full upon registration for the course or in full before the end of the course based on a payment plan, prior to completion of the service period. These payments are recorded as deferred revenue until the services are delivered or until the Company’s obligations are otherwise met, at which time revenue is recognized. The following table presents the Company’s contract liabilities in each segment as of each of the dates indicated. June 30, December 31, (in thousands) Degree Program Segment deferred revenue $ 14,482 $ 1,735 Alternative Credential Segment deferred revenue 69,299 80,214 Total contract liabilities $ 83,781 $ 81,949 For the Degree Program Segment, during each of the three months ended June 30, 2024 and 2023 revenue related to deferred revenue balances that existed at the end of each preceding year was insignificant. During the six months ended June 30, 2024 and 2023 the Company recognized $1.7 million and $1.2 million, respectively, of revenue related to deferred revenue balances that existed at the end of each preceding year. For the Alternative Credential Segment, during the three months ended June 30, 2024 and 2023 the Company recognized $4.6 million and $16.1 million, respectively, of revenue related to deferred revenue balances that existed at the end of each preceding year. During the six months ended June 30, 2024 and 2023 the Company recognized $59.5 million and $71.0 million, respectively, of revenue related to deferred revenue balances that existed at the end of each preceding year. Contract Acquisition Costs The Degree Program Segment had $1.0 million and $1.0 million of net capitalized contract acquisition costs recorded primarily within other assets, non-current on the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023, respectively. For each of the six months ended June 30, 2024 and 2023, the Company capitalized an immaterial amount of contract acquisition costs and recorded an immaterial amount of associated amortization expense in the Degree Program Segment. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2024 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow InformationThe Company’s cash interest payments, net of amounts capitalized, were $32.5 million and $28.4 million for the six months ended June 30, 2024 and 2023, respectively. The Company’s accrued but unpaid capital expenditures were $1.1 million and $2.4 million for the six months ended June 30, 2024 and 2023, respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Chapter 11 Filing On the Petition Date, the Company commenced the Chapter 11 Cases in the Bankruptcy Court in accordance with the terms of the RSA. The Company has requested that the Chapter 11 Cases be jointly administered under the caption “In re: 2U, Inc., et al. Case No. 24-11279 (MEW) (Bankr. S.D.N.Y.).” The Debtors will continue to manage their business and properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. On the Petition Date, the Debtors filed certain motions with the Bankruptcy Court generally designed to facilitate the Debtor’s transition into Chapter 11. These motions sought authority from the Bankruptcy Court for the Debtors to obtain debtor-in-possession financing and make payments upon, or otherwise honor, certain obligations that arose prior to the Petition Date, including obligations related to employee wages, salaries and benefits, taxes, and certain vendors and other providers of goods and services that were, and in some cases continue to be, essential to the Debtors’ businesses. On July 26, 2024, the Bankruptcy Court approved the relief sought in these motions on an interim basis. Debtor-in-Possession Facility On July 29, 2024, the Company entered into that certain Debtor-In-Possession Credit and Guaranty Agreement, by and among the Company, the Consenting Noteholders party thereto (in such capacity, the “DIP Lenders”), and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent (the “DIP Credit Agreement”). Pursuant to the DIP Credit Agreement, the DIP Lenders will provide a secured, multi-draw, junior lien debtor-in-possession financing facility in an aggregate principal amount of up to $64 million (the “DIP Facility”), with an initial draw of $60 million that occurred following entry of the interim order related to the DIP Facility and a subsequent draw not to exceed $4 million permitted following entry of the final order related to the DIP Facility (in the case of the second draw, subject to the consent of the Required Lenders (as defined in the DIP Credit Agreement)) and the satisfaction of certain other draw conditions as set forth in the DIP Credit Agreement. Borrowings under the DIP Facility are secured obligations of the Company, secured by a junior lien on the collateral securing borrowings under the Second Amended Credit Agreement, and a first priority lien on the DIP Account (as defined in the DIP Credit Agreement) and the proceeds therein. The DIP Credit Agreement contains conditions precedent, representations and warranties, affirmative and negative covenants, events of default, and other provisions customary for financings of this type and size. During the continuance of an event of default, all overdue amounts of principal and interest under the DIP Facility will bear interest at the applicable rate, plus an additional 2.00% per annum. The DIP Facility matures on the earlier of (i) January 24, 2025 and (ii) acceleration as a result of an event of default under the DIP Credit Agreement that has occurred and is continuing. The loans under the DIP Facility will accrue interest at a rate of either, at the Company’s election, a base rate (subject to a floor of 1.75%) plus 7.50% per annum or Term SOFR (subject to a floor of 0.75%) plus 8.50% per annum, in each case, payable in kind. Effect of Chapter 11 Cases & Automatic Stay on Pre-Petition Debt Obligations The filing of the Chapter 11 Cases constituted an event of default under the Debt Instruments that accelerated the obligations thereunder. The amount outstanding under each Debt Instrument as of the Petition Date is as follows: approximately $380.0 million of borrowings (plus any accrued but unpaid interest in respect thereof) under the 2025 Notes Indenture; approximately $147.0 million of borrowings (plus any accrued but unpaid interest in respect thereof) under the 2030 Notes Indenture; and approximately $414.3 million of borrowings (plus any accrued but unpaid interest in respect thereof) under the Second Amended Credit Agreement. The Debt Documents provide that, as a result of the Chapter 11 Cases, the principal and interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments are automatically stayed as a result of the Chapter 11 Cases and the holders’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code. In addition, if the Plan is approved by the Bankruptcy Court, obligations under the Indentures will be extinguished, and any defaults or events of default outstanding under the Second Amended Credit Agreement will cease to exist in connection with the Company entering into the Amended and Restated Credit Agreement . Delisting of Common Stock from Nasdaq On July 29, 2024, the Company received a letter from Nasdaq indicating that as a result of the Debtors filing the Chapter 11 Cases on the Petition Date, and in accordance with Nasdaq Listing Rules 5101, 5110(b), and IM-5101-1, Nasdaq determined that the Company’s securities will be delisted from The Nasdaq Global Select Market. Trading of the Company’s common stock was suspended at the opening of business on August 7, 2024, and a Form 25-NSE will be filed with the SEC, which will remove the Company’s common stock from listing and registration on Nasdaq. The Company does not intend to appeal Nasdaq’s decision. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||||
Net loss | $ (452,440) | $ (54,649) | $ (173,654) | $ (54,062) | $ (507,089) | $ (227,716) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Andrew Hermalyn [Member] | |
Trading Arrangements, by Individual | |
Arrangement Duration | 357 days |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
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 six months ended June 30, 2024 and 2023 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, 2023. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2023 was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP on an annual reporting basis. As further discussed in the Reverse Stock Split section below, all per share amounts and common share amounts have been adjusted on a retrospective basis to reflect the Reverse Stock Split (as defined below). |
Going Concern | Going Concern At each annual and interim period, the Company evaluates whether there are conditions or events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. The evaluation is based on relevant conditions or events that are known or reasonably knowable at the date that the consolidated financial statements are issued. Pursuant to the Second Amended Credit Agreement, as defined in Note 8, if more than $40 million of the Company’s 2025 Notes, as defined below, remain outstanding on January 30, 2025, the maturity date of the outstanding term loan balance of $372.4 million springs forward to January 30, 2025. As disclosed in Note 15, on July 24, 2024, the Debtors entered into the RSA with certain creditors, including (i) the Consenting Noteholders comprising certain holders of the 2025 Notes, (ii) the Consenting Noteholders comprising certain holders of the 2030 Notes, and (iii) the Consenting Lenders comprising certain lenders under the Second Amended Credit Agreement. As set forth in the RSA, including in the Restructuring Term Sheet, the parties to the RSA have agreed to the principal terms of a proposed financial restructuring of the Debtors. Pursuant to the RSA, on July 24, 2024, the Debtors commenced solicitation of votes on its Plan, and on July 25, 2024, the Debtors commenced voluntary cases under the Bankruptcy Code in the Bankruptcy Court providing for a court-administered reorganization pursuant to the Plan. The Debtors expect to continue to operate their business as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The filing of the Chapter 11 Cases constituted an event of default under the 2025 Notes Indenture, the 2030 Notes Indenture, and the Second Amended Credit Agreement (the “Debt Instruments”) that accelerated obligations under the Debt Instruments. The amount outstanding under each Debt Instrument as of the Petition Date was: approximately $380.0 million of borrowings (plus any accrued but unpaid interest in respect thereof) under the 2025 Notes Indenture; approximately $147.0 million of borrowings (plus any accrued but unpaid interest in respect thereof) under the 2030 Notes Indenture; and approximately $414.3 million of borrowings (plus any accrued but unpaid interest in respect thereof) under the Second Amended Credit Agreement. The Debt Instruments provide that, as a result of the Chapter 11 Cases, the principal and interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments are automatically stayed as a result of the Chapter 11 Cases and the holders’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code. Pursuant to the RSA, the Consenting Lenders have committed to amend and restate the Second Amended Credit Agreement to provide for, among other things, (i) a revised covenant package that does not require that the Company achieve a minimum level of Recurring Revenue and (ii) an extended maturity date for the borrowings thereunder that is 27 months following the effective date of the Plan. In addition, the Second Amended Credit Agreement also contains a financial covenant that requires the Company to maintain at least $900 million of Recurring Revenues (as defined by the Second Amended Credit Agreement) as of the last day of any period of four consecutive fiscal quarters. The Recurring Revenue for the four consecutive quarters ending June 30, 2024 was less than $900 million and accordingly the Company was not in compliance with this covenant under the Second Amended Credit Agreement. Although failure to comply with this financial covenant without being able to cure or otherwise obtain a waiver could cause the obligations under the Second Amended Credit Agreement to accelerate, any efforts to enforce such acceleration under the Second Amended Credit Agreement is automatically stayed as a result of the Chapter 11 Cases and the lenders’ rights of enforcement in respect of the Second Amended Credit Agreement are subject to the applicable provisions of the Bankruptcy Code. In light of the foregoing, substantial doubt exists about the Company’s ability to continue as a going concern within one year from the date that the condensed consolidated financial statements are issued. The Company’s ability to continue as a going concern is contingent upon, among other things, its ability to, subject to approval by the Bankruptcy Court, implement the Transaction, successfully emerge from the Chapter 11 Cases and generate sufficient liquidity following the Transaction to meet its obligations and operating needs. The Transaction contemplated by the RSA, including the Restructuring Term Sheet, is subject to approval by the Bankruptcy Court, among other conditions. Accordingly, no assurance can be given that the transactions described therein will be consummated on the expected terms, if at all. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will be able to continue as a going concern and contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, nor do they include adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Reverse Stock Split | Reverse Stock Split On May 20, 2024, the Company’s stockholders voted to approve amendments to the Company’s Eighth Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), to effect a reverse stock split of all of the outstanding shares of the Company’s common stock, par value $0.001 per share, at a ratio ranging from any whole number between 1-for-10 and 1-for-40, with the exact ratio within such range to be determined by the Company’s Board of Directors (the “Board”) in its discretion, subject to the Board’s authority to abandon such amendments. On June 5, 2024, the Board approved the amendment to the Certificate of Incorporation effecting the reverse stock split at a ratio of 1-for-30 (the “Reverse Stock Split”). On June 13, 2024, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split. The Reverse Stock Split became effective on June 13, 2024 and trading on the Nasdaq Global Select Market on a post-split basis began on June 14, 2024. Following the Reverse Stock Split, the number of authorized shares of the Company’s common stock remained at 200,000,000. The Reverse Stock Split reduced the total number of issued and outstanding shares of common stock from 82,260,619 to 2,741,980 as of December 31, 2023. The par value of the Company’s common stock remained at $0.001. The Company’s stockholders’ equity, in the aggregate, remained unchanged following the Reverse Stock Split. Per share net loss increased because there were fewer shares of the Company’s common stock outstanding. There were no other accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, that arose as a result of the Reverse Stock Split. No fractional shares were issued in conjunction with the Reverse Stock Split. Instead, stockholders who would otherwise have been entitled to receive fractional shares as a result of the Reverse Stock Split received a cash payment in lieu thereof at a price equal to the fraction to which the stockholder would otherwise be entitled multiplied by the closing sales price per share of the common stock (as adjusted for the Reverse Stock Split) on the Nasdaq Global Select Market on June 13, 2024. These cash payments were immaterial to the Company’s condensed consolidated financial statements. The Reverse Stock Split impacted all stockholders uniformly and did not affect any stockholder’s percentage of ownership or proportionate voting power other than very minor impacts from the treatment of fractional shares. |
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, implied price concessions, acquired intangible assets, the recoverability of goodwill, indefinite-lived intangible assets and long- lived assets, deferred tax assets, and the fair value of the convertible senior notes. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. The Company evaluates its estimates and assumptions on an ongoing basis. |
Fair Value Measurements | Fair Value Measurements The carrying amounts of certain assets and liabilities, including cash and cash equivalents, receivables, advances to university clients, accounts payable and accrued expenses and other current liabilities, approximate their respective fair values due to their short-term nature. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in the absence of a principal, most advantageous, market for the specific asset or liability. U.S. GAAP provides for a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. Generally, assets are recorded at fair value on a non-recurring basis as a result of impairment charges. The Company remeasures non-financial assets such as goodwill, intangible assets and other long-lived assets at fair value when there is an indicator of impairment, and records them at fair value only when recognizing an impairment loss. The fair value hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. Refer to Note 3 for further discussion of assets measured at fair value on a nonrecurring basis. The three tiers are defined as follows: • Level 1 —Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; • Level 2 —Observable inputs, other than quoted prices in active markets, that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and • Level 3 —Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. |
Long-lived Assets | Long-lived Assets The Company reviews long-lived assets, which consist of property and equipment, capitalized technology, capitalized content development and acquired finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. In order to assess the recoverability of the capitalized technology and content development, the amounts are grouped by the lowest level of independent cash flows. Recoverability of a long-lived asset is measured by a comparison of the carrying value of an asset or asset group to the future undiscounted net cash flows expected to be generated by that asset or asset group. If such assets are not recoverable, the impairment to be recognized is measured by the amount by which the carrying value of an asset exceeds the estimated fair value (discounted cash flow) of the asset or asset group. The Company’s impairment analysis is based upon cumulative results and forecasted performance. Determining whether a long-lived asset is impaired requires various estimates and assumptions, including whether a triggering event has occurred, the identification of asset groups, estimates of future cash flows, and discount rates and royalty rates used to determine fair values. During the three and six months ended June 30, 2024, the Company recorded impairment charges of $56.2 million related to intangible and other long-lived assets within the Alternative Credential Segment, of which $32.2 million related to university client relationships, $10.3 million related to capitalized technology, $5.2 million related to right-of-use assets, $4.4 million related to trade names and domain names, $2.4 million related to capitalized content development, and $1.7 million related to fixed assets. During the three and six months ended June 30, 2023, the Company did not record impairment charges related to its long-lived assets. |
Goodwill | Goodwill Goodwill is the excess of purchase price over the fair value of identified net assets of businesses acquired. The Company’s goodwill balance relates to its acquisitions of GetSmarter in July 2017, Trilogy in May 2019 and edX in November 2021. The Company tests goodwill at the reporting unit level, which is an operating segment or one level below an operating segment. The Company initially assesses qualitative factors to determine if it is necessary to perform a quantitative goodwill impairment review. The Company reviews goodwill for impairment using a quantitative approach if it decides to bypass the qualitative assessment or determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value based on a qualitative assessment. Upon completion of a quantitative assessment, the Company may be required to recognize an impairment based on the difference between the carrying value and the fair value of the reporting unit. During the second quarter of 2023, the Company completed the update of its internal financial reporting structure to better align with the executive structure following the 2022 Strategic Realignment. As a result of this update, the Company’s three reporting units within the Alternative Credential Segment (Executive Education, Boot Camp, and Open Courses) were combined into a single reporting unit (Alternative Credential). The Degree Program Segment continues to have one reporting unit (Degree Program). The Company performed impairment assessments before and after the change in reporting units. Refer to the Interim Impairment Assessments section below for further information regarding the results of these assessments. The Company determines the fair value of a reporting unit by utilizing a weighted combination of the income-based and market-based approaches. The income-based approach requires the Company to make significant assumptions and estimates. These assumptions and estimates primarily include, but are not limited to, discount rates, terminal growth rates, and forecasts of revenue and margins. When determining these assumptions and preparing these estimates, the Company considers each reporting unit’s historical results and current operating trends, revenue, profitability, cash flow results and forecasts, and industry trends. These estimates can be affected by a number of factors including, but not limited to, general economic and regulatory conditions, market capitalization, the continued efforts of competitors to gain market share and prospective student enrollment patterns. In addition, the value of a reporting unit using the market-based approach is estimated by comparing the reporting unit to other publicly traded companies and/or to publicly-disclosed business mergers and acquisitions in similar lines of business. The value of a reporting unit is based on pricing multiples of certain financial parameters observed in the comparable companies. The Company also makes estimates and assumptions for market values to determine a reporting unit’s estimated fair value. |
Other Indefinite-lived Intangible Assets | Other Indefinite-lived Intangible Assets |
Interim Impairment Assessment | Interim Impairment Assessments During the second quarter of 2023, the Company experienced a significant decline in its market capitalization, which management deemed to be a triggering event related to the Company’s goodwill and indefinite-lived intangible asset. In addition, as a result of the change in the Company’s reporting units in the second quarter of 2023, the Company performed interim impairment assessments before and after the change in reporting units. The Company performed these interim impairment assessments as of May 1, 2023. For the interim impairment assessment performed as of May 1, 2023, after the change in reporting units, management determined it was not more likely than not that the fair values of the Degree Program reporting unit and the Alternative Credential reporting unit were less than their respective carrying amounts. As such, the Company concluded that the goodwill relating to those reporting units was not impaired and further quantitative impairment assessment was not necessary. During the third quarter of 2023, the Company experienced a significant decline in its market capitalization, which management deemed to be a triggering event related to the Company’s goodwill. The Company performed a quantitative interim impairment assessment as of September 30, 2023. The estimated fair value of each of the Company’s reporting units exceeded their respective carrying value by more than 10%. Based on the qualitative assessment performed as of October 1, 2023, the date of the annual goodwill impairment assessment, the Company had no reporting units whose estimated fair value exceeded their carrying value by less than 10%. During the fourth quarter of 2023, the Company experienced a significant decline in its market capitalization. In addition, the Company made updates to certain long-term financial projections. Management deemed these factors to be triggering events related to the Company’s goodwill. The Company performed a quantitative interim impairment assessment as of December 31, 2023 and determined the carrying value of its Alternative Credential reporting unit exceeded its estimated fair value. As a result, during the three months ended December 31, 2023, the Company recorded impairment charges of $62.8 million to goodwill. This charge is included within operating expense on the Company’s consolidated statements of operations. The estimated fair value of the Degree Program reporting unit exceeded its carrying value by more than 10%. During the second quarter of 2024, the Company experienced a significant decline in its market capitalization. In addition, the Company updated its long-term financial projections in connection with contingency planning related to the Chapter 11 Cases. Management deemed these factors to be triggering events related to the Company’s goodwill. The Company performed a quantitative interim impairment assessment as of May 31, 2024 and determined the carrying value of its Alternative Credential reporting unit exceeded its estimated fair value. As a result, during the three and six months ended June 30, 2024, the Company recorded impairment charges of $339.9 million to goodwill. This charge is included within operating expense on the Company’s condensed consolidated statements of operations. The estimated fair value of the Degree Program reporting unit exceeded its carrying value by more than 10%. It is possible that future changes in circumstances or in the variables associated with the judgments, assumptions and estimates used in assessing the fair value of our reporting units, could require us to record additional impairment charges in the future. For each of the interim impairment assessments, the Company utilized a weighted combination of an income-based approach and market-based approach to determine the fair value of each reporting unit and an income-based approach to determine the fair value of its indefinite-lived intangible asset. Key assumptions used in the income-based approach included discount rates based upon each respective reporting unit’s or indefinite-lived intangible asset’s weighted-average cost of capital adjusted for the risk associated with the operations at the time of the assessment, terminal growth rates, forecasts of revenue and margins, and royalty rates. The income-based approach largely relied on inputs that were not observable to active markets, which would be deemed “Level 3” fair value measurements, as defined in the Fair Value Measurements section above. Key assumptions used in the market-based approach included the selection of appropriate peer group companies. Changes in the estimates and assumptions used to estimate fair value could materially affect the determination of fair value and the impairment test result. |
Convertible Senior Notes and Debt Issuance Costs | Convertible Senior Notes In April 2020, the Company issued the 2025 Notes in an aggregate principal amount of $380 million, including the exercise by the initial purchasers of an option to purchase additional 2025 Notes, in a private offering. Refer to Note 8 for more information regarding the 2025 Notes. In January 2023, the Company issued the 2030 Notes in an aggregate principal amount of $147.0 million in a private offering. Refer to Note 8 for more information regarding the 2030 Notes. Pursuant to 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 , the Company’s convertible senior notes are accounted for as a single instrument. Debt Issuance Costs Debt issuance costs are incurred as a result of entering into certain borrowing transactions and are presented as a reduction from the carrying amount of the debt liability on the Company’s condensed consolidated balance sheets. Debt issuance costs are amortized over the term of the associated debt instrument. The amortization of debt issuance costs is included as a component of interest expense on the Company’s condensed consolidated statements of operations and comprehensive loss. If the Company extinguishes debt prior to the end of the underlying instrument’s full term, some or all of the unamortized debt issuance costs may need to be written off, and a loss on extinguishment may need to be recognized. Refer to Note 8 for further information about the Company’s debt. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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. On December 21, 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 . This ASU defers the sunset date from December 31, 2022 to December 31, 2024 and is effective immediately. The Company will adopt the standard when LIBOR is discontinued and does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU No 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This ASU requires annual and interim disclosures that are expected to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for fiscal years beginning after December 15, 2023 and should be adopted on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires new disclosures about income taxes, primarily focused on the disclosure of income taxes paid and the rate reconciliation table. The ASU is effective for annual periods beginning after December 15, 2024 and should be applied on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and related disclosures. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule Of Goodwill | The following tables present the changes in the carrying amount of goodwill by reportable segment on the Company’s condensed consolidated balance sheets for the periods indicated. Balance as of December 31, 2023 Impairment Charges* Foreign Currency Translation Adjustments Balance as of June 30, 2024 (in thousands) Degree Program Segment Gross goodwill $ 192,459 $ — $ — $ 192,459 Accumulated impairments — — — — Net goodwill 192,459 — — 192,459 Alternative Credential Segment Gross goodwill $ 687,880 $ — $ 314 $ 688,194 Accumulated impairments (228,841) (339,928) — (568,769) Net goodwill 459,039 (339,928) 314 119,425 Total Gross goodwill $ 880,339 $ — $ 314 $ 880,653 Accumulated impairments (228,841) (339,928) — (568,769) Net goodwill $ 651,498 $ (339,928) $ 314 $ 311,884 * Refer to Note 2 for further information about the goodwill impairment charges. |
Schedule Of Amortizable Intangible Assets | The following table presents the components of intangible assets, net on the Company’s condensed consolidated balance sheets as of each of the dates indicated. June 30, 2024 December 31, 2023 Estimated Gross Accumulated Net Gross Accumulated Net (in thousands) Capitalized technology 3-5 $ 244,002 $ (173,765) $ 70,237 $ 245,867 $ (159,155) $ 86,712 Capitalized content development 4-5 228,337 (182,199) 46,138 233,592 (176,374) 57,218 University client relationships 9-10 176,677 (86,036) 90,641 208,823 (75,849) 132,974 Enterprise client relationships 10 14,300 (3,754) 10,546 14,300 (3,039) 11,261 Trade names and domain names* 5-25 278,072 (201,981) 76,091 284,810 (201,777) 83,033 Total intangible assets $ 941,388 $ (647,735) $ 293,653 $ 987,392 $ (616,194) $ 371,198 * During the three and six months ended June 30, 2024, the Company recorded impairment charges of $10.3 million to capitalized technology, $2.4 million to capitalized content development, $32.2 million to university client relationships, and $4.4 million to trade names and domain names. ** The Company concluded that due to changes in facts and circumstances, the edX trade name, which was classified as indefinite-lived as of June 30, 2023, is now finite-lived. In the third quarter of 2023, the Company began amortizing the trade name on a straight-line basis over its estimated useful life. The gross carrying amount of the edX trade name was $255.0 million as of both June 30, 2024 and December 31, 2023. Accumulated amortization and impairments include $181.1 million and $176.7 million of impairment charges related to the edX trade name as June 30, 2024 and December 31, 2023, respectively. Refer to Note 2 for further information about these impairment charges. |
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 June 30, 2024. Future Amortization Expense (in thousands) Remainder of 2024 $ 30,641 2025 52,452 2026 38,076 2027 26,542 2028 19,766 Thereafter 86,813 Total $ 254,290 |
Other Balance Sheet Details (Ta
Other Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Schedule Of Accounts Payable And 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. June 30, 2024 December 31, 2023 (in thousands) Accrued university and instructional staff compensation $ 23,769 $ 28,339 Accrued marketing expenses 9,212 19,652 Accrued compensation and related benefits 6,835 9,870 Accounts payable and other accrued expenses 33,370 45,517 Total accounts payable and accrued expenses $ 73,186 $ 103,378 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Future Minimum Payments To University Clients | The following table presents the estimated future minimum payments due to university clients as of June 30, 2024. Future Minimum Payments (in thousands) Remainder of 2024 $ 1,600 2025 3,500 2026 3,500 2027 3,500 2028 3,500 Thereafter — Total future minimum payments to university clients $ 15,600 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule Of Restructuring Charges By Reportable Segment | The following tables present restructuring charges by reportable segment on the Company’s condensed consolidated statements of operations for the periods indicated. Three Months Ended Three Months Ended Degree Program Segment Alternative Credential Segment Degree Program Segment Alternative Credential Segment (in thousands) Leadership and organizational structure changes Severance and severance-related costs $ 3,951 $ — $ — $ — Lease and lease-related charges 1,398 — — — 5,349 — — — 2022 Strategic Realignment Plan Severance and severance-related costs — — — — Lease and lease-related charges 1,956 717 2,129 682 Professional and other fees relating to restructuring activities — — 404 — Other* — — 13 — 1,956 717 2,546 682 Other restructuring charges** 384 — 373 21 Total restructuring charges $ 7,689 $ 717 $ 2,919 $ 703 Six Months Ended Six Months Ended Degree Program Segment Alternative Credential Segment Degree Program Segment Alternative Credential Segment (in thousands) Leadership and organizational structure changes Severance and severance-related costs $ 5,091 $ 308 $ — $ — Lease and lease-related charges 1,398 — — — 6,489 308 — — 2022 Strategic Realignment Plan Severance and severance-related costs — — 1,231 — Lease and lease-related charges 3,967 1,459 4,272 1,441 Professional and other fees relating to restructuring activities — 119 744 — Other* — — 26 — 3,967 1,578 6,273 1,441 Other restructuring charges** 791 — 753 30 Total restructuring charges $ 11,247 $ 1,886 $ 7,026 $ 1,471 * Includes the acceleration of certain technology and content development costs. ** Includes severance and severance-related costs and lease-related charges. |
Schedule Of Adjustments To The Accrued Restructuring Liability | The following table presents the additions and adjustments to the accrued restructuring liability on the Company’s condensed consolidated balance sheets for the periods indicated. Balance as of December 31, 2023 Additional Costs Cash Payments Balance as of June 30, 2024 (in thousands) Leadership and organizational structure changes Severance and severance-related costs $ 9,779 $ 5,025 $ (8,907) $ 5,897 2022 Strategic Realignment Plan Severance and severance-related costs 4,093 107 (3,595) 605 Professional and other fees relating to restructuring activities 363 191 (558) (4) Lease and lease-related charges 28 7,614 (7,214) 428 Other severance and severance-related costs 243 — (243) — Total restructuring $ 14,506 $ 12,937 $ (20,517) $ 6,926 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 Six Months Ended 2024 2023 2024 2023 (in thousands) Operating lease expense $ 4,158 $ 4,346 $ 8,326 $ 8,803 Short-term lease expense 39 35 82 69 Variable lease expense 2,242 1,362 4,172 3,269 Sublease income (611) (481) (1,247) (908) Total lease expense $ 5,828 $ 5,262 $ 11,333 $ 11,233 |
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 $3.6 million in aggregate. June 30, 2024 (in thousands) Remainder of 2024 $ 12,016 2025 20,549 2026 21,107 2027 21,688 2028 17,214 Thereafter 33,051 Total lease payments 125,625 Less: imputed interest (34,612) Total lease liability $ 91,013 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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. June 30, 2024 December 31, 2023 (in thousands) Term loan facilities $ 374,300 $ 376,200 Revolving facility 40,000 40,000 Convertible senior notes 527,000 527,000 Deferred government grant obligations 3,500 3,500 Other borrowings 1,111 1,699 Less: unamortized debt discount and issuance costs (37,613) (43,670) Total debt 908,298 904,729 Less: current portion of long-term debt (908,298) (8,215) Total long-term debt $ — $ 896,514 The net carrying amount of the 2025 Notes consists of the following as of each of the dates indicated: June 30, 2024 December 31, 2023 (in thousands) Principal $ 380,000 $ 380,000 Unamortized issuance costs (1,757) (2,807) Net carrying amount $ 378,243 $ 377,193 The net carrying amount of the 2030 Notes consist of the following as of the date indicated: June 30, 2024 December 31, 2023 (in thousands) Principal $ 147,000 $ 147,000 Unamortized debt discount and issuance costs (17,662) (19,136) Net carrying amount $ 129,338 $ 127,864 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Schedule Of Shares Of Common Stock Reserved For Future Issuance | As of June 30, 2024, there were 2,805,301 shares of common stock outstanding, and the Company had reserved a total of 1,502,497 of its authorized shares of common stock for future issuance as follows: Shares Reserved for Future Issuance Outstanding restricted stock units 88,226 Outstanding performance restricted stock units 77,112 Outstanding stock options 100,058 Reserved for convertible senior notes 1,237,101 Total shares of common stock reserved for future issuance 1,502,497 |
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 2014 Plan 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 Six Months Ended 2024 2023 2024 2023 (in thousands) Curriculum and teaching $ 95 $ 51 $ 135 $ 91 Servicing and support 1,118 2,239 2,592 5,516 Technology and content development 393 1,960 1,002 3,617 Marketing and sales 695 1,369 1,208 2,523 General and administrative 2,210 5,364 4,898 13,799 Total stock-based compensation expense $ 4,511 $ 10,983 $ 9,835 $ 25,546 |
Schedule Of Restricted And Performance Restricted Stock Unit Activity | The following table presents a summary of the Company’s RSU activity, adjusted on a retroactive basis to reflect the Reverse Stock Split, for the period indicated. No RSUs were granted during the six months ended June 30, 2024. Number of Weighted- Outstanding balance as of December 31, 2023 152,911 $ 244.00 Granted — — Vested (41,006) 282.01 Forfeited (23,679) 210.69 Outstanding balance as of June 30, 2024 88,226 $ 235.27 The following table presents a summary of the Company’s PRSU activity, adjusted on a retroactive basis to reflect the Reverse Stock Split, for the period indicated. Number of Weighted- Outstanding balance as of December 31, 2023 27,695 $ 403.04 Granted 59,293 13.12 Vested — — Forfeited (9,876) 11.98 Outstanding balance as of June 30, 2024 77,112 $ 153.31 |
Schedule Of Assumptions Used For Estimating The Fair Value Of The Stock Options Granted | The following tables present a summary of (i) for the six months ended June 30, 2024 and 2023, the assumptions used for estimating the fair values of the TSR-performance component of the PRSUs, and (ii) for the six months ended June 30, 2024, the assumptions used for estimating the fair value of the PRSUs subject to market-based vesting conditions. As of June 30, 2024 and December 31, 2023, there were 14,036 and 40,910 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 June 30, 2024 and December 31, 2023, and have been excluded from the tables below. No PRSUs were granted during each of the three months ended June 30, 2024 and 2023. Six Months Ended 2024 2023 Risk-free interest rate 5.11% 4.68% Expected term (years) 1.00 1.00 Expected volatility 162% 108% Dividend yield 0% 0% Six Months Ended Risk-free interest rate 4.33% Expected term (years) 1.30 Expected volatility 126% Dividend yield 0% The following table summarizes the assumptions used for estimating the fair value of the stock options granted for the period presented. No stock options were granted during the six months ended June 30, 2024 or the three months ended June 30, 2023. Six Months Ended Risk-free interest rate 3.6% Expected term (years) 5.69 Expected volatility 87% Dividend yield 0% Weighted-average grant date fair value per share $147.90 |
Schedule Of Stock Option Activity | The following table presents a summary of the Company’s stock option activity, adjusted on a retroactive basis to reflect the Reverse Stock Split, for the period indicated. Number of Weighted-Average Weighted-Average Aggregate Outstanding balance as of December 31, 2023 135,176 $ 838.34 4.63 $ — Granted — — 0.00 Exercised — — 0.00 Forfeited (4,787) 305.40 Expired (30,331) 592.77 Outstanding balance as of June 30, 2024 100,058 938.27 4.62 — Exercisable as of June 30, 2024 85,523 $ 1,025.12 4.16 $ — |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 Six Months Ended 2024 2023 Stock options 100,058 161,760 Restricted stock units 88,226 212,283 Performance restricted stock units 77,112 87,485 Shares related to convertible senior notes 992,556 992,556 Total antidilutive securities (1) 1,257,952 1,454,084 (1) Amounts have been adjusted to reflect the Reverse Stock Split that became effective on June 13, 2024. Refer to Note 2 for further information about the Reverse Stock Split. |
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 Six Months Ended 2024 2023 2024 2023 Numerator (in thousands): Net loss $ (452,440) $ (173,654) $ (507,089) $ (227,716) Denominator: Weighted-average shares of common stock outstanding, basic and diluted (1) 2,804,924 2,685,645 2,793,262 2,664,889 Net loss per share, basic and diluted (1) $ (161.30) $ (64.66) $ (181.54) $ (85.45) (1) Amounts have been adjusted to reflect the Reverse Stock Split that became effective on June 13, 2024. Refer to Note 2 for further information about the Reverse Stock Split. |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 Six Months Ended 2024 2023 2024 2023 (dollars in thousands) Revenue by segment* Degree Program Segment $ 101,978 $ 119,494 $ 213,524 $ 259,974 Alternative Credential Segment 78,705 102,595 165,536 200,619 Total revenue $ 180,683 $ 222,089 $ 379,060 $ 460,593 Segment profitability** Degree Program Segment $ 28,655 $ 33,111 $ 60,640 $ 80,315 Alternative Credential Segment (9,260) (11,319) (23,950) (28,332) Total segment profitability $ 19,395 $ 21,792 $ 36,690 $ 51,983 Segment profitability margin*** Degree Program Segment 28.1 % 27.7 % 28.4 % 30.9 % Alternative Credential Segment (11.8) (11.0) (14.5) (14.1) Total segment profitability margin 10.7 % 9.8 % 9.7 % 11.3 % * The Company has excluded immaterial amounts of intersegment revenues from each of the three and six months ended June 30, 2024 and 2023. ** 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, transaction costs, integration costs, professional fees associated with the Chapter 11 Cases, performance improvement initiative implementation expense, restructuring-related costs, stockholder activism costs, certain litigation-related costs, consisting of fees for certain non-ordinary course litigation and other proceedings, impairment charges, debt modification expense and 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 Six Months Ended 2024 2023 2024 2023 (in thousands) Net loss $ (452,440) $ (173,654) $ (507,089) $ (227,716) Adjustments: Stock-based compensation expense 4,511 10,983 9,835 25,546 Other expense (income), net 1,428 (227) 9,832 (834) Net interest expense 19,012 17,545 37,702 35,137 Income tax (benefit) expense (40) 210 193 323 Depreciation and amortization expense 24,886 27,328 49,572 57,348 Impairment charges 396,149 134,117 396,149 134,117 Debt modification expense and loss on debt extinguishment — — — 16,735 Restructuring charges 8,406 3,622 13,133 8,497 Other* 17,483 1,868 27,363 2,830 Total adjustments 471,835 195,446 543,779 279,699 Total segment profitability $ 19,395 $ 21,792 $ 36,690 $ 51,983 * Includes (i) transaction and integration costs of $0.0 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, and $0.3 million and $0.2 million for the six months ended June 30, 2024 and 2023, respectively, (ii) litigation-related costs of $1.6 million and $1.8 million for the three months ended June 30, 2024 and 2023, respectively, and $4.2 million and $2.6 million for the six months ended June 30, 2024 and 2023, respectively, and (iii) professional fees associated with the Chapter 11 Cases and performance improvement initiative implementation expense of $15.9 million and $0.0 million for the three months ended June 30, 2024 and 2023, respectively, and $22.9 million and $0.0 million for the six months ended June 30, 2024 and 2023, 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. June 30, December 31, (in thousands) Total assets Degree Program Segment $ 283,664 $ 377,395 Alternative Credential Segment 640,650 1,082,288 Total assets $ 924,314 $ 1,459,683 |
Receivables and Contract Liab_2
Receivables and Contract Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Receivables And Contract Liabilities Disclosure [Abstract] | |
Schedule Of Receivables | The following table presents the Company’s trade accounts receivable in each segment as of each of the dates indicated. June 30, December 31, (in thousands) Degree Program Segment accounts receivable $ 16,912 $ 3,207 Degree Program Segment unbilled revenue 26,372 72,525 Alternative Credential Segment accounts receivable 34,092 47,455 Total 77,376 123,187 Less: Provision for credit losses (6,038) (7,243) Trade accounts receivable, net $ 71,338 $ 115,944 June 30, December 31, (in thousands) Other receivables, amortized cost $ 48,642 $ 49,358 Less: Provision for credit losses (9,476) (8,558) Other receivables, net $ 39,166 $ 40,800 Other receivables, net, current $ 23,819 $ 28,293 Other receivables, net, non-current $ 15,347 $ 12,507 |
Schedule Of Accounts Receivable, Allowance For Credit Loss | The following table presents the change in provision for credit losses for trade accounts receivable on the Company’s condensed consolidated balance sheets for the period indicated. Provision for Credit Losses (in thousands) Balance as of December 31, 2023 $ 7,243 Current period provision 1,450 Amounts written off (2,651) Foreign currency translation adjustments (4) Balance as of June 30, 2024 $ 6,038 |
Schedule Of Other Receivable, Allowance For Credit Loss | The following table presents the change in provision for credit losses for other receivables on the Company’s condensed consolidated balance sheets for the period indicated. Provision for Credit Losses (in thousands) Balance as of December 31, 2023 $ 8,558 Current period provision 918 Balance as of June 30, 2024 $ 9,476 |
Schedule Of Other Receivable Credit Quality Indicators | The following tables present other receivables, at amortized cost including interest accretion, by credit quality indicator and year of origination, as of the dates indicated. June 30, 2024 Year of Origination 2024 2023 2022 2021 2020 & Prior Total (in thousands) Credit Quality Tier High $ 5,216 $ 5,966 $ 1,147 $ 366 $ 1,023 $ 13,718 Mid 6,392 7,237 2,853 1,609 2,538 20,629 Low 4,327 4,224 2,037 1,574 2,133 14,295 Total $ 15,935 $ 17,427 $ 6,037 $ 3,549 $ 5,694 $ 48,642 December 31, 2023 Year of Origination 2023 2022 2021 2020 2019 & Prior Total (in thousands) Credit Quality Tier High $ 12,744 $ 1,229 $ 404 $ 311 $ 205 $ 14,893 Mid 13,178 3,067 2,614 735 674 20,268 Low 7,658 2,464 2,684 734 657 14,197 Total $ 33,580 $ 6,760 $ 5,702 $ 1,780 $ 1,536 $ 49,358 |
Schedule Of Contract Liabilities By Segment | The following table presents the Company’s contract liabilities in each segment as of each of the dates indicated. June 30, December 31, (in thousands) Degree Program Segment deferred revenue $ 14,482 $ 1,735 Alternative Credential Segment deferred revenue 69,299 80,214 Total contract liabilities $ 83,781 $ 81,949 |
Organization (Details)
Organization (Details) people in Millions | 6 Months Ended |
Jun. 30, 2024 people segment learningOpportunity university | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of registered learners | people | 89 |
Number of universities and other leading institutions that company serves | university | 260 |
Number of learning opportunities offered | learningOpportunity | 4,700 |
Number of reportable segments | segment | 2 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 3 Months Ended | 6 Months Ended | ||||||||||||||
Jun. 13, 2024 | Jun. 05, 2024 | May 20, 2024 $ / shares | Jun. 30, 2024 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) segment | Jun. 30, 2024 USD ($) segment $ / shares shares | Jun. 30, 2023 USD ($) | Jul. 25, 2024 USD ($) | Dec. 30, 2023 shares | Sep. 30, 2023 | Jul. 01, 2023 | Jan. 31, 2023 USD ($) | Jan. 11, 2023 USD ($) | Jan. 09, 2023 USD ($) | Apr. 30, 2020 USD ($) | |
Property and Equipment, Net | ||||||||||||||||
Net carrying amount | $ 908,298,000 | $ 904,729,000 | $ 908,298,000 | |||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Stock split ratio, common stock | 0.033 | 0.033 | ||||||||||||||
Authorized shares of common stock (in shares) | shares | 200,000,000 | 200,000,000 | 200,000,000 | |||||||||||||
Common stock, shares issued (in shares) | shares | 2,805,301 | 2,741,980 | 2,805,301 | 82,260,619 | ||||||||||||
Common stock, shares outstanding (in shares) | shares | 2,805,301 | 2,741,980 | 2,805,301 | 82,260,619 | ||||||||||||
Asset impairment charges | $ (396,149,000) | $ (134,117,000) | $ (396,149,000) | $ (134,117,000) | ||||||||||||
Impairment charges | $ 339,900,000 | $ 62,800,000 | 16,700,000 | $ 339,928,000 | ||||||||||||
Impairment of indefinite lived intangibles | $ 117,400,000 | |||||||||||||||
Trade names | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Estimated average useful life | 25 years | |||||||||||||||
Maximum | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Stock split ratio, common stock | 0.1 | |||||||||||||||
Maximum | University client relationships | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Estimated average useful life | 10 years | 10 years | ||||||||||||||
Maximum | Capitalized technology | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Estimated average useful life | 5 years | 5 years | ||||||||||||||
Maximum | Trade names and domain names | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Estimated average useful life | 25 years | 25 years | ||||||||||||||
Maximum | Artistic-Related Intangible Assets | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Estimated average useful life | 5 years | 5 years | ||||||||||||||
Minimum | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Stock split ratio, common stock | 0.025 | |||||||||||||||
Minimum | University client relationships | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Estimated average useful life | 9 years | 9 years | ||||||||||||||
Minimum | Capitalized technology | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Estimated average useful life | 3 years | 3 years | ||||||||||||||
Minimum | Trade names and domain names | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Estimated average useful life | 5 years | 5 years | ||||||||||||||
Minimum | Artistic-Related Intangible Assets | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Estimated average useful life | 4 years | 4 years | ||||||||||||||
Alternative Credential Segment | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Asset impairment charges | $ (56,200,000) | $ (56,200,000) | ||||||||||||||
Impairment of right of use assets | (5,200,000) | (5,200,000) | ||||||||||||||
Impairment of fixed assets | (1,700,000) | (1,700,000) | ||||||||||||||
Number of reporting units | segment | 3 | |||||||||||||||
Alternative Credential Segment | University client relationships | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Impairment charges | (32,200,000) | (32,200,000) | ||||||||||||||
Alternative Credential Segment | Capitalized technology | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Impairment charges | (10,300,000) | (10,300,000) | ||||||||||||||
Alternative Credential Segment | Trade names and domain names | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Impairment charges | (4,400,000) | (4,400,000) | ||||||||||||||
Alternative Credential Segment | Artistic-Related Intangible Assets | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Impairment charges | $ (2,400,000) | $ (2,400,000) | ||||||||||||||
Degree Program Segment | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Number of reporting units | segment | 1 | |||||||||||||||
Reporting unit carrying percentage | 10% | 10% | 10% | 10% | ||||||||||||
Convertible senior notes | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Net carrying amount | $ 527,000,000 | $ 527,000,000 | $ 527,000,000 | |||||||||||||
Revolving Loan Facility | Line of Credit | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Principal | $ 40,000,000 | |||||||||||||||
Net carrying amount | $ 372,400,000 | |||||||||||||||
Second Amended Credit Agreement | Line of Credit | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Recurring revenues | 900,000,000 | |||||||||||||||
Second Amended Credit Agreement | Line of Credit | Subsequent Event | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Net carrying amount | $ 414,300,000 | |||||||||||||||
2025 Notes | Convertible senior notes | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Principal | 380,000,000 | 380,000,000 | 380,000,000 | $ 380,000,000 | ||||||||||||
Net carrying amount | 378,243,000 | 377,193,000 | 378,243,000 | |||||||||||||
2025 Notes | Convertible senior notes | Subsequent Event | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Net carrying amount | 380,000,000 | |||||||||||||||
2030 Notes | Convertible senior notes | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Principal | 147,000,000 | 147,000,000 | 147,000,000 | $ 147,000,000 | $ 147,000,000 | |||||||||||
Net carrying amount | $ 129,338,000 | $ 127,864,000 | $ 129,338,000 | |||||||||||||
2030 Notes | Convertible senior notes | Subsequent Event | ||||||||||||||||
Property and Equipment, Net | ||||||||||||||||
Net carrying amount | $ 147,000,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule Of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2024 | |
Goodwill [Roll Forward] | ||||
Beginning balance | $ 880,339 | |||
Goodwill, accumulated impairment, beginning balance | (228,841) | |||
Beginning balance | 651,498 | |||
Impairment charges | $ (339,900) | $ (62,800) | $ (16,700) | (339,928) |
Foreign Currency Translation Adjustments | 314 | |||
Ending balance | 880,653 | 880,339 | 880,653 | |
Goodwill, accumulated impairment ending balance | (568,769) | (228,841) | (568,769) | |
Ending balance | 311,884 | 651,498 | 311,884 | |
Degree Program Segment | Operating Segments | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 192,459 | |||
Goodwill, accumulated impairment, beginning balance | 0 | |||
Beginning balance | 192,459 | |||
Impairment charges | 0 | |||
Foreign Currency Translation Adjustments | 0 | |||
Ending balance | 192,459 | 192,459 | 192,459 | |
Goodwill, accumulated impairment ending balance | 0 | 0 | 0 | |
Ending balance | 192,459 | 192,459 | 192,459 | |
Alternative Credential Segment | Operating Segments | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 687,880 | |||
Goodwill, accumulated impairment, beginning balance | (228,841) | |||
Beginning balance | 459,039 | |||
Impairment charges | (339,928) | |||
Foreign Currency Translation Adjustments | 314 | |||
Ending balance | 688,194 | 687,880 | 688,194 | |
Goodwill, accumulated impairment ending balance | (568,769) | (228,841) | (568,769) | |
Ending balance | $ 119,425 | $ 459,039 | $ 119,425 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule Of Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Amortizable Intangible Assets | |||
Gross Carrying Amount | $ 941,388 | $ 941,388 | $ 987,392 |
Accumulated Amortization and Impairments* | (647,735) | (647,735) | (616,194) |
Total | 293,653 | 293,653 | 371,198 |
Capitalized technology | |||
Amortizable Intangible Assets | |||
Gross Carrying Amount | 244,002 | 244,002 | 245,867 |
Accumulated Amortization and Impairments* | (173,765) | (173,765) | (159,155) |
Total | 70,237 | 70,237 | 86,712 |
Capitalized technology | Alternative Credential Segment | |||
Amortizable Intangible Assets | |||
Impairment charges | $ 10,300 | $ 10,300 | |
Capitalized technology | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Average Useful Life (in years) | 3 years | 3 years | |
Capitalized technology | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Average Useful Life (in years) | 5 years | 5 years | |
Capitalized content development | |||
Amortizable Intangible Assets | |||
Gross Carrying Amount | $ 228,337 | $ 228,337 | 233,592 |
Accumulated Amortization and Impairments* | (182,199) | (182,199) | (176,374) |
Total | 46,138 | 46,138 | 57,218 |
Capitalized content development | Alternative Credential Segment | |||
Amortizable Intangible Assets | |||
Impairment charges | $ 2,400 | $ 2,400 | |
Capitalized content development | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Average Useful Life (in years) | 4 years | 4 years | |
Capitalized content development | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Average Useful Life (in years) | 5 years | 5 years | |
University client relationships | |||
Amortizable Intangible Assets | |||
Gross Carrying Amount | $ 176,677 | $ 176,677 | 208,823 |
Accumulated Amortization and Impairments* | (86,036) | (86,036) | (75,849) |
Total | 90,641 | 90,641 | 132,974 |
University client relationships | Alternative Credential Segment | |||
Amortizable Intangible Assets | |||
Impairment charges | $ 32,200 | $ 32,200 | |
University client relationships | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Average Useful Life (in years) | 9 years | 9 years | |
University client relationships | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Average Useful Life (in years) | 10 years | 10 years | |
Enterprise client relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Average Useful Life (in years) | 10 years | 10 years | |
Amortizable Intangible Assets | |||
Gross Carrying Amount | $ 14,300 | $ 14,300 | 14,300 |
Accumulated Amortization and Impairments* | (3,754) | (3,754) | (3,039) |
Total | 10,546 | 10,546 | 11,261 |
Trade names and domain names | |||
Amortizable Intangible Assets | |||
Gross Carrying Amount | 278,072 | 278,072 | 284,810 |
Accumulated Amortization and Impairments* | (201,981) | (201,981) | (201,777) |
Total | 76,091 | 76,091 | 83,033 |
Trade names and domain names | Alternative Credential Segment | |||
Amortizable Intangible Assets | |||
Impairment charges | $ 4,400 | $ 4,400 | |
Trade names and domain names | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Average Useful Life (in years) | 5 years | 5 years | |
Trade names and domain names | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Average Useful Life (in years) | 25 years | 25 years | |
Trade names | |||
Amortizable Intangible Assets | |||
Gross Carrying Amount | $ 255,000 | $ 255,000 | 255,000 |
Accumulated Amortization and Impairments* | $ (181,100) | $ (181,100) | $ (176,700) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||||
In process capitalized technology and content development | $ 293,653 | $ 293,653 | $ 371,198 | ||
Amortization of intangible assets | 22,300 | $ 24,700 | 44,400 | $ 51,900 | |
In Process Capitalized Technology and Content Development | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
In process capitalized technology and content development | $ 39,400 | $ 39,400 | $ 43,400 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule Of Estimated Future Amortization Expense For Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Future Amortization Expense | ||
Total | $ 293,653 | $ 371,198 |
Excluding In Process Capitalized Technology And Content Development | ||
Future Amortization Expense | ||
Remainder of 2024 | 30,641 | |
2025 | 52,452 | |
2026 | 38,076 | |
2027 | 26,542 | |
2028 | 19,766 | |
Thereafter | 86,813 | |
Total | $ 254,290 |
Other Balance Sheet Details - N
Other Balance Sheet Details - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Prepaid assets | $ 23,100 | $ 23,100 | $ 19,800 | ||
Deferred expenses incurred to integrate software | 13,800 | 13,800 | 13,600 | ||
Amortization of capitalized software implementation costs | 1,300 | $ 1,000 | 2,400 | $ 1,800 | |
Other current liabilities | 36,891 | 36,891 | 36,133 | ||
Interest payable | 13,500 | 13,500 | 13,600 | ||
Related Party | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Other current liabilities | $ 12,600 | $ 12,600 | $ 10,500 | ||
Minimum | Capitalized technology | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Estimated average useful life | 3 years | 3 years | |||
Maximum | Capitalized technology | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Estimated average useful life | 5 years | 5 years |
Other Balance Sheet Details - A
Other Balance Sheet Details - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Accrued university and instructional staff compensation | $ 23,769 | $ 28,339 |
Accrued marketing expenses | 9,212 | 19,652 |
Accrued compensation and related benefits | 6,835 | 9,870 |
Accounts payable and other accrued expenses | 33,370 | 45,517 |
Total accounts payable and accrued expenses | $ 73,186 | $ 103,378 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | Apr. 19, 2024 | Sep. 30, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Plaintiff violation damages | $ 2,500 | |
Purchase obligation | $ 30,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule Of Future Minimum Payments To University Clients (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Future Minimum Payments | |
Remainder of 2024 | $ 1,600 |
2025 | 3,500 |
2026 | 3,500 |
2027 | 3,500 |
2028 | 3,500 |
Thereafter | 0 |
Total future minimum payments to university clients | $ 15,600 |
Restructuring Charges - Additio
Restructuring Charges - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 8,406 | $ 3,622 | $ 13,133 | $ 8,497 |
2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 2,700 | $ 3,200 | 5,500 | $ 7,700 |
Cumulative charges | 61,200 | 61,200 | ||
Minimum | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Additional restructuring charges | $ 70,000 | $ 70,000 | ||
Estimated remaining costs | 1 year | 1 year | ||
Maximum | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Additional restructuring charges | $ 75,000 | $ 75,000 | ||
Estimated remaining costs | 7 years | 7 years |
Restructuring Charges - Schedul
Restructuring Charges - Schedule of Restructuring Charges by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Degree Program Segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | $ 7,689 | $ 2,919 | $ 11,247 | $ 7,026 |
Degree Program Segment | Leadership and organizational structure changes | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 5,349 | 0 | 6,489 | 0 |
Degree Program Segment | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 1,956 | 2,546 | 3,967 | 6,273 |
Degree Program Segment | Severance and severance-related costs | Leadership and organizational structure changes | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 3,951 | 0 | 5,091 | 0 |
Degree Program Segment | Severance and severance-related costs | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 0 | 0 | 0 | 1,231 |
Degree Program Segment | Lease and lease-related charges | Leadership and organizational structure changes | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 1,398 | 0 | 1,398 | 0 |
Degree Program Segment | Lease and lease-related charges | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 1,956 | 2,129 | 3,967 | 4,272 |
Degree Program Segment | Professional and other fees relating to restructuring activities | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 0 | 404 | 0 | 744 |
Degree Program Segment | Other | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 0 | 13 | 0 | 26 |
Degree Program Segment | Other restructuring charges | Other restructuring charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 384 | 373 | 791 | 753 |
Alternative Credential Segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 717 | 703 | 1,886 | 1,471 |
Alternative Credential Segment | Leadership and organizational structure changes | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 0 | 0 | 308 | 0 |
Alternative Credential Segment | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 717 | 682 | 1,578 | 1,441 |
Alternative Credential Segment | Severance and severance-related costs | Leadership and organizational structure changes | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 0 | 0 | 308 | 0 |
Alternative Credential Segment | Severance and severance-related costs | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 0 | 0 | 0 | 0 |
Alternative Credential Segment | Lease and lease-related charges | Leadership and organizational structure changes | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 0 | 0 | 0 | 0 |
Alternative Credential Segment | Lease and lease-related charges | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 717 | 682 | 1,459 | 1,441 |
Alternative Credential Segment | Professional and other fees relating to restructuring activities | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 0 | 0 | 119 | 0 |
Alternative Credential Segment | Other | 2022 Strategic Realignment Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 0 | 0 | 0 | 0 |
Alternative Credential Segment | Other restructuring charges | Other restructuring charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | $ 0 | $ 21 | $ 0 | $ 30 |
Restructuring Charges - Sched_2
Restructuring Charges - Schedule of Adjustments to the Accrued Restructuring Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | $ 14,506 | |||
Additional Costs | 12,937 | |||
Cash Payments | (20,517) | |||
Ending Balance | $ 6,926 | 6,926 | ||
Degree Program Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 7,689 | $ 2,919 | 11,247 | $ 7,026 |
Alternative Credential Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 717 | 703 | 1,886 | 1,471 |
Other severance and severance-related costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 243 | |||
Additional Costs | 0 | |||
Cash Payments | (243) | |||
Ending Balance | 0 | 0 | ||
Leadership and organizational structure changes | Degree Program Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 5,349 | 0 | 6,489 | 0 |
Leadership and organizational structure changes | Alternative Credential Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 0 | 0 | 308 | 0 |
Leadership and organizational structure changes | Leadership and organizational structure changes | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 9,779 | |||
Additional Costs | 5,025 | |||
Cash Payments | (8,907) | |||
Ending Balance | 5,897 | 5,897 | ||
Leadership and organizational structure changes | Severance and severance-related costs | Degree Program Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 3,951 | 0 | 5,091 | 0 |
Leadership and organizational structure changes | Severance and severance-related costs | Alternative Credential Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 0 | 0 | 308 | 0 |
Leadership and organizational structure changes | Lease and lease-related charges | Degree Program Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 1,398 | 0 | 1,398 | 0 |
Leadership and organizational structure changes | Lease and lease-related charges | Alternative Credential Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 0 | 0 | 0 | 0 |
2022 Strategic Realignment Plan | Degree Program Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 1,956 | 2,546 | 3,967 | 6,273 |
2022 Strategic Realignment Plan | Alternative Credential Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 717 | 682 | 1,578 | 1,441 |
2022 Strategic Realignment Plan | Severance and severance-related costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 4,093 | |||
Additional Costs | 107 | |||
Cash Payments | (3,595) | |||
Ending Balance | 605 | 605 | ||
2022 Strategic Realignment Plan | Severance and severance-related costs | Degree Program Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 0 | 0 | 0 | 1,231 |
2022 Strategic Realignment Plan | Severance and severance-related costs | Alternative Credential Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 0 | 0 | 0 | 0 |
2022 Strategic Realignment Plan | Professional and other fees relating to restructuring activities | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 363 | |||
Additional Costs | 191 | |||
Cash Payments | (558) | |||
2022 Strategic Realignment Plan | Professional and other fees relating to restructuring activities | Degree Program Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 0 | 404 | 0 | 744 |
2022 Strategic Realignment Plan | Professional and other fees relating to restructuring activities | Alternative Credential Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 0 | 0 | 119 | 0 |
2022 Strategic Realignment Plan | Professional and other fees relating to restructuring activities | ||||
Restructuring Reserve [Roll Forward] | ||||
Ending Balance | (4) | (4) | ||
2022 Strategic Realignment Plan | Lease and lease-related charges | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 28 | |||
Additional Costs | 7,614 | |||
Cash Payments | (7,214) | |||
Ending Balance | 428 | 428 | ||
2022 Strategic Realignment Plan | Lease and lease-related charges | Degree Program Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | 1,956 | 2,129 | 3,967 | 4,272 |
2022 Strategic Realignment Plan | Lease and lease-related charges | Alternative Credential Segment | ||||
Restructuring Reserve [Roll Forward] | ||||
Total restructuring charges | $ 717 | $ 682 | $ 1,459 | $ 1,441 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Lessee, Lease, Description [Line Items] | ||
Renewal term | 5 years | |
Option to terminate, term | 1 year | |
Weighted average remaining lease term | 5 years 10 months 24 days | |
Weighted average discount rate | 10.80% | |
Operating lease payments | $ 12.3 | $ 12.1 |
Lease liabilities arising from obtaining right-of-use assets | 0 | $ 0 |
Future sublease income expected to be earned | $ 3.6 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Contract term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Contract term | 10 years |
Leases - Schedule Of Lease Cost
Leases - Schedule Of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Leases [Abstract] | ||||
Operating lease expense | $ 4,158 | $ 4,346 | $ 8,326 | $ 8,803 |
Short-term lease expense | 39 | 35 | 82 | 69 |
Variable lease expense | 2,242 | 1,362 | 4,172 | 3,269 |
Sublease income | (611) | (481) | (1,247) | (908) |
Total lease expense | $ 5,828 | $ 5,262 | $ 11,333 | $ 11,233 |
Leases - Schedule Of Maturities
Leases - Schedule Of Maturities Of Operating Lease Liabilities (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Leases [Abstract] | |
Remainder of 2024 | $ 12,016 |
2025 | 20,549 |
2026 | 21,107 |
2027 | 21,688 |
2028 | 17,214 |
Thereafter | 33,051 |
Total lease payments | 125,625 |
Less: imputed interest | (34,612) |
Total lease liability | $ 91,013 |
Debt - Schedule Of Long-term De
Debt - Schedule Of Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Less: unamortized debt discount and issuance costs | $ (37,613) | $ (43,670) |
Total debt | 908,298 | 904,729 |
Less: current portion of long-term debt | (908,298) | (8,215) |
Total long-term debt | 0 | 896,514 |
Term loan facilities | ||
Debt Instrument [Line Items] | ||
Net carrying amount | 374,300 | 376,200 |
Revolving facility | ||
Debt Instrument [Line Items] | ||
Net carrying amount | 40,000 | 40,000 |
Convertible senior notes | ||
Debt Instrument [Line Items] | ||
Net carrying amount | 527,000 | 527,000 |
Deferred government grant obligations | ||
Debt Instrument [Line Items] | ||
Net carrying amount | 3,500 | 3,500 |
Other borrowings | ||
Debt Instrument [Line Items] | ||
Net carrying amount | $ 1,111 | $ 1,699 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||
Jun. 13, 2024 | Jan. 11, 2023 USD ($) day $ / shares | Jan. 09, 2023 USD ($) | Apr. 30, 2020 USD ($) day $ / shares | Jun. 30, 2024 USD ($) agreement | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2024 USD ($) day agreement | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | Jan. 31, 2023 USD ($) | Jan. 08, 2023 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, unamortized debt discount and issuance costs | $ 37,613,000 | $ 37,613,000 | $ 43,670,000 | ||||||||||
Proceeds from debt | 0 | $ 269,223,000 | |||||||||||
Loss on debt extinguishment | $ 0 | 12,123,000 | |||||||||||
Prince Georges County Maryland | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate | 3% | 3% | |||||||||||
Standby Letters of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 11,700,000 | $ 11,700,000 | |||||||||||
Prince Georges County Maryland | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of contracts | agreement | 2 | 2 | |||||||||||
Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Net carrying amount | $ 527,000,000 | $ 527,000,000 | 527,000,000 | ||||||||||
Revolving facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Net carrying amount | 40,000,000 | 40,000,000 | 40,000,000 | ||||||||||
Second Amended Credit Agreement | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, restrictive covenants, minimum recurring revenues | $ 900,000,000 | 900,000,000 | |||||||||||
Deferred government grant obligations | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Net carrying amount | 3,500,000 | 3,500,000 | 3,500,000 | ||||||||||
Deferred government grant obligations | Prince Georges County Maryland | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Net carrying amount | 3,500,000 | 3,500,000 | |||||||||||
2025 Notes | Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal | $ 380,000,000 | 380,000,000 | 380,000,000 | 380,000,000 | |||||||||
Interest rate | 2.25% | ||||||||||||
Interest expense, debt | $ 2,600,000 | $ 2,600,000 | $ 5,300,000 | 5,300,000 | |||||||||
Proceeds from debt | $ 369,600,000 | ||||||||||||
Debt instrument, effective interest rate | 2.90% | 2.90% | |||||||||||
Debt instrument, convertible, threshold consecutive trading days, sale price per share | 130% | ||||||||||||
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% | ||||||||||||
Debt instrument, convertible, conversion ratio | 0.0011792 | 0.0353773 | |||||||||||
Debt instrument, convertible, conversion price (in dollars per share) | $ / shares | $ 28.27 | ||||||||||||
2025 Notes | Convertible Debt | Minimum | Outstanding on January 30, 2025 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal | $ 40,000,000 | ||||||||||||
2025 Notes | Line of Credit | Minimum | Outstanding on January 1, 2025 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long-term debt, average amount outstanding | 50,000,000 | ||||||||||||
2025 Notes | Fair Value, Inputs, Level 2 | Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long-term debt, fair value | $ 205,200,000 | $ 205,200,000 | 191,700,000 | ||||||||||
2030 Notes | Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal | $ 147,000,000 | 147,000,000 | 147,000,000 | 147,000,000 | $ 147,000,000 | ||||||||
Interest rate | 4.50% | ||||||||||||
Interest expense, debt | $ 2,400,000 | $ 2,300,000 | $ 4,800,000 | $ 4,300,000 | |||||||||
Proceeds from debt | $ 127,100,000 | ||||||||||||
Debt instrument, convertible, threshold consecutive trading days, sale price per share | 130% | ||||||||||||
Debt instrument, convertible, threshold trading days | day | 20 | ||||||||||||
Debt instrument, convertible, threshold consecutive trading days | day | 30 | ||||||||||||
Debt instrument, convertible, conversion ratio | 0.0038037 | 0.1111111 | |||||||||||
Debt instrument, convertible, conversion price (in dollars per share) | $ / shares | $ 9 | ||||||||||||
Interest rate during period | 7.50% | 7.50% | |||||||||||
2030 Notes | Fair Value, Inputs, Level 2 | Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Long-term debt, fair value | $ 48,500,000 | $ 48,500,000 | 55,000,000 | ||||||||||
Term Loan Agreement | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, unamortized debt discount and issuance costs | $ 18,200,000 | $ 18,200,000 | $ 21,700,000 | ||||||||||
Debt instrument, effective interest rate percentage | 14.50% | 14.40% | 14.50% | 14.10% | |||||||||
Term Loan Agreement | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Net carrying amount | $ 380,000,000 | $ 567,000,000 | |||||||||||
Prepayment premium | 1% | ||||||||||||
Principal repayments | 0.25% | 0.25% | |||||||||||
Interest expense, debt | $ 14,300,000 | $ 13,300,000 | $ 28,400,000 | $ 26,500,000 | |||||||||
Loss on debt extinguishment | $ 12,100,000 | ||||||||||||
Unamortized issuance costs | $ 4,600,000 | ||||||||||||
Term Loan Agreement | Line of Credit | Base Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Variable rate, applicable margin | 5.50% | ||||||||||||
Interest rate | 4.75% | 4.75% | |||||||||||
Term Loan Agreement | Line of Credit | SOFR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Variable rate, applicable margin | 6.50% | ||||||||||||
Term Loan Agreement | Line of Credit | Eurodollar | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate | 5.75% | 5.75% | |||||||||||
Revolving Loan Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, effective interest rate percentage | 10.80% | 10.60% | 10.90% | 10.60% | |||||||||
Revolving Loan Facility | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal | $ 40,000,000 | ||||||||||||
Revolving Loan Facility | Line of Credit | Base Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Variable rate, applicable margin | 4.50% | ||||||||||||
Revolving Loan Facility | Line of Credit | SOFR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Variable rate, applicable margin | 5.50% | ||||||||||||
The Notes | Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Capped call, cap price (in dollars per share) | $ / shares | $ 44.34 | ||||||||||||
Cost of derivative | $ 50,500,000 | ||||||||||||
Senior Secured Term Loan Facility | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Senior secured term loan facility | $ 250,000,000 |
Debt - Net Carrying Amount (Det
Debt - Net Carrying Amount (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Jan. 31, 2023 | Jan. 11, 2023 | Apr. 30, 2020 |
Debt Instrument [Line Items] | |||||
Total debt | $ 908,298,000 | $ 904,729,000 | |||
2025 Notes | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Principal | 380,000,000 | 380,000,000 | $ 380,000,000 | ||
Unamortized issuance costs | (1,757,000) | (2,807,000) | |||
Total debt | 378,243,000 | 377,193,000 | |||
2030 Notes | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Principal | 147,000,000 | 147,000,000 | $ 147,000,000 | $ 147,000,000 | |
Unamortized issuance costs | (17,662,000) | (19,136,000) | |||
Total debt | $ 129,338,000 | $ 127,864,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
U.S. statutory federal income tax rate | 1% | 1% | 1% | 1% |
Income tax (benefit) expense | $ (40) | $ 210 | $ 193 | $ 323 |
Stockholders' Equity - Reverse
Stockholders' Equity - Reverse Stock Split (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Jun. 13, 2024 | Jun. 05, 2024 | May 20, 2024 $ / shares | Jun. 30, 2024 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 30, 2023 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||
Stock split ratio, common stock | 0.033 | 0.033 | ||||
Authorized shares of common stock (in shares) | 200,000,000 | 200,000,000 | ||||
Common stock, shares issued (in shares) | 2,805,301 | 2,741,980 | 82,260,619 | |||
Common stock, shares outstanding (in shares) | 2,805,301 | 2,741,980 | 82,260,619 | |||
Decrease in common stock | $ | $ (100) | |||||
Increase in additional paid-in capital | $ | $ 100 | |||||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock split ratio, common stock | 0.1 | |||||
Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock split ratio, common stock | 0.025 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule Of Shares Of Common Stock Reserved For Future Issuance (Details) - shares | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 30, 2023 |
Stockholders' Equity | |||
Capital stock shares, authorized (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, shares outstanding (in shares) | 2,805,301 | 2,741,980 | 82,260,619 |
Common stock, shares issued (in shares) | 2,805,301 | 2,741,980 | 82,260,619 |
Shares reserved for future issuance (in shares) | 1,502,497 | ||
Outstanding restricted stock units | |||
Stockholders' Equity | |||
Shares reserved for future issuance (in shares) | 88,226 | ||
Outstanding performance restricted stock units | |||
Stockholders' Equity | |||
Shares reserved for future issuance (in shares) | 77,112 | ||
Outstanding stock options | |||
Stockholders' Equity | |||
Shares reserved for future issuance (in shares) | 100,058 | ||
Reserved for convertible senior notes | |||
Stockholders' Equity | |||
Shares reserved for future issuance (in shares) | 1,237,101 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation Narrative (Details) - shares | Jan. 01, 2024 | Jun. 30, 2023 | Jan. 01, 2023 |
Equity Incentive Plan 2014 | |||
Stockholders' Equity | |||
Increase in shares in available for future issuance (in shares) | 137,101 | 130,557 | |
Equity Incentive Plan 2017 | |||
Stockholders' Equity | |||
Increase in shares in available for future issuance (in shares) | 66,666 |
Stockholders' Equity - Stock-_2
Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | $ 4,511 | $ 10,983 | $ 9,835 | $ 25,546 |
Curriculum and teaching | ||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | 95 | 51 | 135 | 91 |
Servicing and support | ||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | 1,118 | 2,239 | 2,592 | 5,516 |
Technology and content development | ||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | 393 | 1,960 | 1,002 | 3,617 |
Marketing and sales | ||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | 695 | 1,369 | 1,208 | 2,523 |
General and administrative | ||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | ||||
Total stock-based compensation expense | $ 2,210 | $ 5,364 | $ 4,898 | $ 13,799 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units Narrative (Details) - RSUs - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 0 | |||
Total fair value of RSUs and PRSUs vested | $ 0.2 | $ 7.9 | $ 0.9 | $ 13.1 |
Total unrecognized compensation cost related to unvested RSUs | $ 12.2 | $ 12.2 | ||
Unrecognized compensation cost period expected to be realized | 1 year 3 months 18 days | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years |
Stockholders' Equity - Restri_2
Stockholders' Equity - Restricted Stock Units and Performance Restricted Stock Units (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | |
RSUs | |||
Number of Units | |||
Outstanding balance at the beginning of the period (in shares) | 152,911 | ||
Granted (in shares) | 0 | ||
Vested (in shares) | (41,006) | ||
Forfeited (in shares) | (23,679) | ||
Outstanding balance at the end of the period (in shares) | 88,226 | 88,226 | |
Weighted- Average Grant Date Fair Value per Share | |||
Outstanding at the beginning of the period (in dollars per share) | $ 244 | ||
Granted (in dollars per share) | 0 | ||
Vested (in dollars per share) | 282.01 | ||
Forfeited (in dollars per share) | 210.69 | ||
Outstanding at the end of the period (in dollars per share) | $ 235.27 | $ 235.27 | |
PRSUs | |||
Number of Units | |||
Outstanding balance at the beginning of the period (in shares) | 27,695 | ||
Granted (in shares) | 0 | 0 | 59,293 |
Vested (in shares) | 0 | ||
Forfeited (in shares) | (9,876) | ||
Outstanding balance at the end of the period (in shares) | 77,112 | 77,112 | |
Weighted- Average Grant Date Fair Value per Share | |||
Outstanding at the beginning of the period (in dollars per share) | $ 403.04 | ||
Granted (in dollars per share) | 13.12 | ||
Vested (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 11.98 | ||
Outstanding at the end of the period (in dollars per share) | $ 153.31 | $ 153.31 |
Stockholders' Equity - Performa
Stockholders' Equity - Performance Restricted Stock Units Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Feb. 29, 2024 $ / shares shares | Mar. 31, 2023 USD ($) $ / shares shares | Feb. 28, 2023 $ / shares shares | Mar. 31, 2022 USD ($) installment $ / shares shares | Jun. 30, 2024 USD ($) shares | Mar. 31, 2024 $ / shares shares | Jun. 30, 2023 shares | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) installment shares | Jun. 30, 2024 USD ($) $ / shares shares | Dec. 31, 2023 shares | |
Monte Carlo Valuation Model | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Granted (in dollars per share) | $ / shares | $ 11.94 | ||||||||||
First Performance Period | Monte Carlo Valuation Model | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Granted (in dollars per share) | $ / shares | $ 11.70 | ||||||||||
Second Performance Period | Monte Carlo Valuation Model | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Granted (in dollars per share) | $ / shares | $ 0 | ||||||||||
PRSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Aggregate grant date fair value | $ | $ 12.2 | $ 12.2 | |||||||||
Granted (in shares) | shares | 0 | 0 | 59,293 | ||||||||
Granted (in dollars per share) | $ / shares | $ 13.12 | ||||||||||
Share-based compensation, adjustment upon company's total shareholder return | 20% | ||||||||||
Total shareholder return multiplier maximum percent | 0% | ||||||||||
Granted (in shares) | shares | 46,722 | ||||||||||
Percent of the award earned | 0% | ||||||||||
Expiration period | 2 years | ||||||||||
Outstanding balance (in shares) | shares | 77,112 | 77,112 | 27,695 | ||||||||
Total unrecognized compensation cost related to unvested RSUs | $ | $ 1.2 | $ 1.2 | |||||||||
Unrecognized compensation cost period expected to be realized | 1 year | ||||||||||
PRSUs | Monte Carlo Valuation Model | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Granted (in dollars per share) | $ / shares | $ 14.70 | ||||||||||
PRSUs | Maximum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
PRSU award vesting | 150% | 200% | |||||||||
Eligible vesting rights, percentage | 130% | ||||||||||
PRSUs | Minimum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
PRSU award vesting | 0% | 0% | |||||||||
Eligible vesting rights, percentage | 0% | ||||||||||
PRSUs | One And Three Year Performance Based Vesting, Stock Price Achievement | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Awarded (in shares) | shares | 56,163 | ||||||||||
Aggregate grant date fair value | $ | $ 20.4 | $ 20.4 | |||||||||
Share-based compensation number of installment | installment | 3 | 3 | |||||||||
Vesting period | 1 year | ||||||||||
Granted (in shares) | shares | 11,147 | 18,721 | 18,721 | ||||||||
Granted (in dollars per share) | $ / shares | $ 11.97 | $ 214.50 | $ 334.65 | $ 323.10 | |||||||
Granted (in shares) | shares | 14,413 | 15,573 | 24,999 | ||||||||
Average stock price (in dollars per share) | $ / shares | $ 300 | ||||||||||
PRSUs | First Performance Period | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
PRSU award vesting | 125% | 100% | |||||||||
PRSUs | Second Performance Period | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
PRSU award vesting | 27.80% | ||||||||||
Performance Restricted Stock Units, Performance Metrics Not Yet Defined | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Outstanding balance (in shares) | shares | 14,036 | 14,036 | 40,910 |
Stockholders' Equity - Fair Val
Stockholders' Equity - Fair Value Assumptions (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
PRSUs | ||
Fair value assumptions and methodology | ||
Risk-free interest rate | 5.11% | 4.68% |
Expected term (years) | 1 year | 1 year |
Expected volatility | 162% | 108% |
Dividend yield | 0% | 0% |
Stock options | ||
Fair value assumptions and methodology | ||
Risk-free interest rate | 3.60% | |
Expected term (years) | 5 years 8 months 8 days | |
Expected volatility | 87% | |
Dividend yield | 0% | |
Weighted average grant date fair value (in dollars per share) | $ 147.90 | |
Market Based PRSU | ||
Fair value assumptions and methodology | ||
Risk-free interest rate | 4.33% | |
Expected term (years) | 1 year 3 months 18 days | |
Expected volatility | 126% | |
Dividend yield | 0% |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Number of Options | ||
Outstanding balance at the beginning of the period (in shares) | 135,176 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | (4,787) | |
Expired (in shares) | (30,331) | |
Outstanding balance at the end of the period (in shares) | 100,058 | 135,176 |
Exercisable at the end of the period (in shares) | 85,523 | |
Weighted-Average Exercise Price per Share | ||
Outstanding balance at the beginning of the period (in dollars per share) | $ 838.34 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 305.40 | |
Expired (in dollars per share) | 592.77 | |
Outstanding balance at the end of the period (in dollars per share) | 938.27 | $ 838.34 |
Exercisable at the end of the period (in dollars per share) | $ 1,025.12 | |
Weighted-Average Remaining Contractual Term (in years) | ||
Outstanding balance | 4 years 7 months 13 days | 4 years 7 months 17 days |
Granted | 0 years | |
Exercised | 0 years | |
Exercisable | 4 years 1 month 28 days | |
Aggregate Intrinsic Value (in thousands) | ||
Outstanding balance at the end of the period | $ 0 | $ 0 |
Exercisable at the end of the period | $ 0 |
Stockholders' Equity - Stock _2
Stockholders' Equity - Stock Option Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Stock-Based Compensation | ||
Granted (in shares) | 0 | |
Stock options | ||
Stock-Based Compensation | ||
Expiration period | 10 years | |
Vesting period | 3 years | |
Aggregate intrinsic value of employee options exercised | $ 0.1 | |
Compensation cost related to the nonvested awards not yet recognized | $ 2 | |
Unrecognized compensation cost period expected to be realized | 7 months 6 days |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Potential dilutive securities that would have been anti-dilutive | |||||
Total antidilutive securities (in shares) | 1,257,952 | 1,454,084 | 1,257,952 | 1,454,084 | |
Numerator: | |||||
Net loss | $ (452,440) | $ (173,654) | $ (507,089) | $ (227,716) | |
Denominator: | |||||
Weighted-average shares of common stock outstanding, basic (in shares) | [1] | 2,804,924 | 2,685,645 | 2,793,262 | 2,664,889 |
Weighted-average shares of common stock outstanding, diluted (in shares) | [1] | 2,804,924 | 2,685,645 | 2,793,262 | 2,664,889 |
Net loss per share, basic (in dollars per share) | [1] | $ (161.30) | $ (64.66) | $ (181.54) | $ (85.45) |
Net loss per share, diluted (in dollars per share) | [1] | $ (161.30) | $ (64.66) | $ (181.54) | $ (85.45) |
Stock options | |||||
Potential dilutive securities that would have been anti-dilutive | |||||
Total antidilutive securities (in shares) | 100,058 | 161,760 | 100,058 | 161,760 | |
Restricted stock units | |||||
Potential dilutive securities that would have been anti-dilutive | |||||
Total antidilutive securities (in shares) | 88,226 | 212,283 | 88,226 | 212,283 | |
Performance restricted stock units | |||||
Potential dilutive securities that would have been anti-dilutive | |||||
Total antidilutive securities (in shares) | 77,112 | 87,485 | 77,112 | 87,485 | |
Shares related to convertible senior notes | |||||
Potential dilutive securities that would have been anti-dilutive | |||||
Total antidilutive securities (in shares) | 992,556 | 992,556 | 992,556 | 992,556 | |
[1] Amounts have been adjusted to reflect the Reverse Stock Split that became effective on June 13, 2024. Refer to Note 2 for further information about the Reverse Stock Split. |
Segment and Geographic Inform_3
Segment and Geographic Information - Narrative (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 USD ($) segment | Dec. 31, 2023 USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 2 | |
Accounts receivable, net | $ 71,338 | $ 115,944 |
University Client 1 | Accounts Receivable, Net | Credit Concentration Risk | Degree Program Segment | ||
Segment Reporting Information [Line Items] | ||
Percentage of concentration of credit risk | 31% | |
Accounts receivable, net | $ 36,400 | |
University Client 2 | Accounts Receivable, Net | Credit Concentration Risk | Degree Program Segment | ||
Segment Reporting Information [Line Items] | ||
Percentage of concentration of credit risk | 12% | |
Accounts receivable, net | $ 14,300 |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule Of Revenue, Segment Profitability And Segment Profitability Margin By Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 180,683 | $ 222,089 | $ 379,060 | $ 460,593 |
Total segment profitability | $ 19,395 | $ 21,792 | $ 36,690 | $ 51,983 |
Total segment profitability margin | 10.70% | 9.80% | 9.70% | 11.30% |
Degree Program Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 101,978 | $ 119,494 | $ 213,524 | $ 259,974 |
Total segment profitability | $ 28,655 | $ 33,111 | $ 60,640 | $ 80,315 |
Total segment profitability margin | 28.10% | 27.70% | 28.40% | 30.90% |
Alternative Credential Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 78,705 | $ 102,595 | $ 165,536 | $ 200,619 |
Total segment profitability | $ (9,260) | $ (11,319) | $ (23,950) | $ (28,332) |
Total segment profitability margin | (11.80%) | (11.00%) | (14.50%) | (14.10%) |
Segment and Geographic Inform_5
Segment and Geographic Information - Schedule Of Reconciliation Of Net Loss To Total Segment Profitability (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting [Abstract] | ||||||
Net loss | $ (452,440) | $ (54,649) | $ (173,654) | $ (54,062) | $ (507,089) | $ (227,716) |
Adjustments: | ||||||
Stock-based compensation expense | 4,511 | 10,983 | 9,835 | 25,546 | ||
Other expense (income), net | 1,428 | (227) | 9,832 | (834) | ||
Net interest expense | 19,012 | 17,545 | 37,702 | 35,137 | ||
Income tax (benefit) expense | (40) | 210 | 193 | 323 | ||
Depreciation and amortization expense | 24,886 | 27,328 | 49,572 | 57,348 | ||
Impairment charges | 396,149 | 134,117 | 396,149 | 134,117 | ||
Debt modification expense and loss on debt extinguishment | 0 | 0 | 0 | 16,735 | ||
Restructuring charges | 8,406 | 3,622 | 13,133 | 8,497 | ||
Other | 17,483 | 1,868 | 27,363 | 2,830 | ||
Total adjustments | 471,835 | 195,446 | 543,779 | 279,699 | ||
Total segment profitability | 19,395 | 21,792 | 36,690 | 51,983 | ||
Transaction and integration costs | 0 | 100 | 300 | 200 | ||
Stockholder activism costs | 1,600 | 1,800 | 4,200 | 2,600 | ||
Performance improvement plan implementation expense | $ 15,900 | $ 0 | $ 22,900 | $ 0 |
Segment and Geographic Inform_6
Segment and Geographic Information - Schedule Of Total Assets By Segment (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 924,314 | $ 1,459,683 |
Degree Program Segment | ||
Segment Reporting Information [Line Items] | ||
Total assets | 283,664 | 377,395 |
Alternative Credential Segment | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 640,650 | $ 1,082,288 |
Segment and Geographic Inform_7
Segment and Geographic Information - Geographical Information Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Geographical Information | |||||
Total revenue | $ 180,683 | $ 222,089 | $ 379,060 | $ 460,593 | |
Assets | 924,314 | 924,314 | $ 1,459,683 | ||
Alternative Credential Segment | |||||
Geographical Information | |||||
Total revenue | 78,705 | 102,595 | 165,536 | 200,619 | |
Assets | 640,650 | 640,650 | 1,082,288 | ||
Non-US | |||||
Geographical Information | |||||
Total revenue | 25,100 | $ 28,800 | 53,500 | $ 59,500 | |
Non-US | Alternative Credential Segment | |||||
Geographical Information | |||||
Assets | $ 3,100 | $ 3,100 | $ 3,500 |
Receivables and Contract Liab_3
Receivables and Contract Liabilities - Trade Accounts Receivable and Contract Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Segment Reporting Information [Line Items] | ||
Degree program segment and alternative credential segment accounts receivable | $ 77,376 | $ 123,187 |
Less: Provision for credit losses | (6,038) | (7,243) |
Trade accounts receivable, net | 71,338 | 115,944 |
Degree Program Segment | ||
Segment Reporting Information [Line Items] | ||
Degree program segment and alternative credential segment accounts receivable | 16,912 | 3,207 |
Degree Program Segment unbilled revenue | 26,372 | 72,525 |
Alternative Credential Segment | ||
Segment Reporting Information [Line Items] | ||
Degree program segment and alternative credential segment accounts receivable | $ 34,092 | $ 47,455 |
Receivables and Contract Liab_4
Receivables and Contract Liabilities - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Segment Reporting Information [Line Items] | ||||||
Accounts receivable, factored receivable purchase rate | 88% | |||||
Accounts receivable, sale | $ 82,100 | $ 82,100 | ||||
Proceeds from sale of accounts receivable | $ 74,000 | 74,000 | ||||
Loss on sale of receivables | $ 8,120 | $ 0 | ||||
Percentage of other receivables that are current | 68% | 68% | ||||
Degree Program Segment | ||||||
Segment Reporting Information [Line Items] | ||||||
Unbilled revenue | $ 26,372 | $ 26,372 | $ 72,525 | |||
Contract with customer, liability, revenue recognized | 0 | $ 0 | 1,700 | 1,200 | ||
Capitalized contract cost | 1,000 | 1,000 | 1,000 | |||
Alternative Credential Segment | ||||||
Segment Reporting Information [Line Items] | ||||||
Contract with customer, liability, revenue recognized | 4,600 | $ 16,100 | $ 59,500 | $ 71,000 | ||
Minimum | ||||||
Segment Reporting Information [Line Items] | ||||||
Trade receivables, term | 12 months | |||||
Term of other receivables | 12 months | |||||
Maximum | ||||||
Segment Reporting Information [Line Items] | ||||||
Trade receivables, term | 24 months | |||||
Term of other receivables | 42 months | |||||
Portfolio Management Agreement | ||||||
Segment Reporting Information [Line Items] | ||||||
Unbilled revenue | 9,900 | $ 9,900 | 68,200 | |||
Accounts receivable noncurrent | $ 500 | $ 500 | $ 16,900 |
Receivables and Contract Liab_5
Receivables and Contract Liabilities - Change in Provision for Credit Losses for Trade Receivables (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Provision for Credit Losses | |
Beginning balance | $ 7,243 |
Current period provision | 1,450 |
Amounts written off | (2,651) |
Foreign currency translation adjustments | (4) |
Ending balance | $ 6,038 |
Receivables and Contract Liab_6
Receivables and Contract Liabilities - Other Receivables (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Receivables And Contract Liabilities Disclosure [Abstract] | ||
Other receivables, amortized cost | $ 48,642 | $ 49,358 |
Less: Provision for credit losses | (9,476) | (8,558) |
Other receivables, net | 39,166 | 40,800 |
Other receivables, net, current | 23,819 | 28,293 |
Other receivables, net, non-current | $ 15,347 | $ 12,507 |
Receivables and Contract Liab_7
Receivables and Contract Liabilities - Change in Provision for Credit Losses for Other Receivables (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Other Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance as of December 31, 2023 | $ 8,558 |
Current period provision | 918 |
Balance as of June 30, 2024 | $ 9,476 |
Receivables and Contract Liab_8
Receivables and Contract Liabilities -Schedule Of Other Receivable Credit Quality Indicators (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Origination year | $ 15,935 | $ 33,580 |
Origination year, one year before current fiscal year | 17,427 | 6,760 |
Origination year, two years before current fiscal year | 6,037 | 5,702 |
Origination year, three years before current fiscal year | 3,549 | 1,780 |
Origination year, four years before current fiscal year | 5,694 | 1,536 |
Total | 48,642 | 49,358 |
High | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Origination year | 5,216 | 12,744 |
Origination year, one year before current fiscal year | 5,966 | 1,229 |
Origination year, two years before current fiscal year | 1,147 | 404 |
Origination year, three years before current fiscal year | 366 | 311 |
Origination year, four years before current fiscal year | 1,023 | 205 |
Total | 13,718 | 14,893 |
Mid | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Origination year | 6,392 | 13,178 |
Origination year, one year before current fiscal year | 7,237 | 3,067 |
Origination year, two years before current fiscal year | 2,853 | 2,614 |
Origination year, three years before current fiscal year | 1,609 | 735 |
Origination year, four years before current fiscal year | 2,538 | 674 |
Total | 20,629 | 20,268 |
Low | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Origination year | 4,327 | 7,658 |
Origination year, one year before current fiscal year | 4,224 | 2,464 |
Origination year, two years before current fiscal year | 2,037 | 2,684 |
Origination year, three years before current fiscal year | 1,574 | 734 |
Origination year, four years before current fiscal year | 2,133 | 657 |
Total | $ 14,295 | $ 14,197 |
Receivables and Contract Liab_9
Receivables and Contract Liabilities - Schedule Of Contract Liabilities By Segment (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Segment Reporting Information [Line Items] | ||
Total contract liabilities | $ 83,781 | $ 81,949 |
Degree Program Segment | ||
Segment Reporting Information [Line Items] | ||
Total contract liabilities | 14,482 | 1,735 |
Alternative Credential Segment | ||
Segment Reporting Information [Line Items] | ||
Total contract liabilities | $ 69,299 | $ 80,214 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash interest payments | $ 32.5 | $ 28.4 |
Unpaid capital expenditures | $ 1.1 | $ 2.4 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Jul. 29, 2024 | Jul. 25, 2024 | Jun. 30, 2024 | Dec. 31, 2023 |
Convertible senior notes | ||||
Subsequent Events [Line Items] | ||||
Net carrying amount | $ 527,000 | $ 527,000 | ||
DIP Facility | Subsequent Event | Base Rate | ||||
Subsequent Events [Line Items] | ||||
Basis spread on interest rate | 0.0750 | |||
DIP Facility | Subsequent Event | Base Rate | Minimum | ||||
Subsequent Events [Line Items] | ||||
Basis spread on interest rate | 0.0175 | |||
DIP Facility | Subsequent Event | Secured Overnight Financing Rate (SOFR) | ||||
Subsequent Events [Line Items] | ||||
Basis spread on interest rate | 0.0850 | |||
DIP Facility | Subsequent Event | Secured Overnight Financing Rate (SOFR) | Minimum | ||||
Subsequent Events [Line Items] | ||||
Basis spread on interest rate | 0.0075 | |||
DIP Facility | Secured Debt | Subsequent Event | ||||
Subsequent Events [Line Items] | ||||
Aggregate principal amount | $ 64,000 | |||
Initial borrowings outstanding | 60,000 | |||
Subsequent borrowings outstanding | $ 4,000 | |||
Interest rate on borrowings outstanding | 2% | |||
2025 Notes | Convertible senior notes | Subsequent Event | ||||
Subsequent Events [Line Items] | ||||
Net carrying amount | $ 380,000 | |||
2030 Notes | Convertible senior notes | Subsequent Event | ||||
Subsequent Events [Line Items] | ||||
Net carrying amount | 147,000 | |||
Second Amended Credit Agreement | Line of Credit | Subsequent Event | ||||
Subsequent Events [Line Items] | ||||
Net carrying amount | $ 414,300 |