LANHAM, Md. - 2U, Inc. (NASDAQ:TWOU), an online education platform company, disclosed its financial and operational results for the fourth quarter and full year ending December 31, 2023. The company experienced an 8% revenue increase in Q4 compared to the same period in 2022, reaching $255.7 million. However, for the full year, 2U reported a 2% decrease in revenue to $946.0 million.
In the fourth quarter, the Degree Program Segment saw a 19% revenue increase to $163.5 million, while the Alternative Credential Segment's revenue dropped by 7% to $92.2 million. The net loss for Q4 was $42.4 million, which includes non-cash impairment charges of $62.8 million. The Adjusted EBITDA, a non-GAAP financial measure, rose by 54% to $90.2 million, representing a 35% margin.
For the entire year, the Degree Program Segment and Alternative Credential Segment both reported a 2% decrease in revenue, with figures of $561.0 million and $384.9 million, respectively. The annual net loss widened to $317.6 million, including non-cash impairment charges totaling $196.9 million. Despite the net loss, the Adjusted EBITDA for the full year increased by 37% to $170.8 million, equating to an 18% margin.
CEO Paul Lalljie expressed pride in the company's performance, particularly in executive education, and highlighted a new organizational structure aimed at enhancing transparency and alignment. CFO Matthew Norden emphasized the focus on strengthening business fundamentals to restore a healthy balance sheet and extend debt maturities.
The company's cash position at the end of 2023 was $73.4 million, down from $182.6 million the previous year. Total debt stood at $904.7 million, including a $40.0 million draw on the revolving credit facility. In January 2024, 2U entered a receivables factoring transaction with Morgan Stanley, committing to purchase up to $86.2 million of receivables at an 88% rate.
2U also provided forward-looking guidance for Q1 and the full year of 2024, not reflecting the potential results of an ongoing comprehensive performance improvement exercise. The Q1 revenue is projected to range between $195 million and $198 million, with an expected net loss between $60 million and $55 million. For the full year, revenue is anticipated to be between $805 million and $815 million, and the net loss is forecasted between $90 million and $85 million.
This financial update is based on a press release statement from 2U, Inc.
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