2U, Inc (TWOU) saw its loss narrow to $6.76 million, or $0.14 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $8.24 million, or $0.20 a share. On an adjusted basis, net loss for the quarter was $2.68 million, when compared with $4.93 million in the last year period. Revenue during the quarter surged 40.08 percent to $51.96 million from $37.09 million in the previous year period. Gross margin for the quarter expanded 364 basis points over the previous year period to 63.39 percent. Operating margin for the quarter stood at negative 13.08 percent as compared to a negative 21.24 percent for the previous year period.
Operating loss for the quarter was $6.80 million, compared with an operating loss of $7.88 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $0.19 million compared to negative $2.93 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at negative 0.36 percent for the quarter compared to negative 7.90 percent in the last year period.
"Once again 2U delivered strong financial performance in the third quarter of 2016. Revenue for Q3 was $52 million, an increase of 40% year over year," said Chip Paucek, 2U's chief executive officer and co-founder. "We have now announced two new programs, including a new university partner in a new region as well as an existing partner launching a new program with us. Given the state of the new program pipeline, we are increasing our 2017 launch target from nine to 10 new programs. We will discuss our long-term growth strategy in detail during our Investor Day on November 15th."
For the fourth-quarter 2016, 2U, Inc expects revenue to be in the range of $56 million to $56.40 million. It forecasts net loss to be in the range of $3.50 million to $3.10 million. The company projects adjusted net income to be in the range of $1.10 million to $1.50 million. The company projects diluted loss per share to be in the range of $0.70 to $0.60. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.02 to $0.03.
For fiscal year 2016, 2U, Inc expects revenue to be in the range of $204.50 million to $204.90 million. It forecasts net loss to be in the range of $21.90 million to $21.50 million. The projects adjusted net loss to be in the range of $5.80 million to $5.40 million. The company projects diluted loss per share to be in the range of $0.47 to $0.46. The company projects diluted loss per share to be in the range of $0.13 to $0.12 on adjusted basis.
Operating cash flow remains negative
2U, Inc has spent $14.42 million cash to meet operating activities during the nine month period as against cash outgo of $22.62 million in the last year period. The company has spent $16.16 million cash to meet investing activities during the nine month period as against cash outgo of $10.34 million in the last year period.
Cash flow from financing activities was $3.78 million for the nine month period, down 96.89 percent or $117.57 million, when compared with the last year period.
Cash and cash equivalents stood at $156.93 million as on Sep. 30, 2016, down 10.49 percent or $18.40 million from $175.32 million on Sep. 30, 2015.
Working capital declines
2U, Inc has witnessed a decline in the working capital over the last year. It stood at $147.89 million as at Sep. 30, 2016, down 8.55 percent or $13.83 million from $161.72 million on Sep. 30, 2015. Current ratio was at 4.89 as on Sep. 30, 2016, down from 5.95 on Sep. 30, 2015.
Days sales outstanding went up to 22 days for the quarter compared with 21 days for the same period last year.
At the same time, days payable outstanding went down to 18 days for the quarter from 22 for the same period last year.
Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
