2U, Inc (TWOU) saw its loss widen to $3.44 million, or $0.07 a share for the quarter ended Mar. 31, 2017. In the previous year period, the company reported a loss of $3.38 million, or $0.07 a share. On an adjusted basis, net profit for the quarter was $0.46 million, when compared with $0.16 million in the last year period.
Revenue during the quarter surged 36.64 percent to $64.83 million from $47.44 million in the previous year period. Gross margin for the quarter expanded 433 basis points over the previous year period to 68.95 percent. Operating margin for the quarter stood at negative 5.61 percent as compared to a negative 7.26 percent for the previous year period.
Operating loss for the quarter was $3.64 million, compared with an operating loss of $3.45 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $3.91 million compared with $2.25 million in the prior year period. At the same time, adjusted EBITDA margin improved 129 basis points in the quarter to 6.03 percent from 4.74 percent in the last year period.
"We once again produced strong financial performance in the first quarter of 2017, showing significant revenue growth as well as margin improvement in each of our earnings measures," said Christopher "Chip" Paucek, 2U's chief executive officer and co-founder. "Our business now has a sizable, and increasing, number of domestic graduate programs operating at positive margins. This enables us to invest in accelerating our program launch cadence to drive future revenue growth while continuing to improve total company margins. Earlier this year, we confirmed our new domestic graduate program launch targets, which would result in more than tripling our total launched DGPs by the end of 2020. As of today, we have slotted 5 of the 13 new DGPs we expect to launch in 2018."
For the second-quarter 2017, 2U, Inc projects revenue to be in the range of $64 million to $64.40 million. The company expects net loss to be in the range of $11.40 million to $10.90. The company forecasts adjusted net loss to be in the range of $5.80 million to $5.40 million. The company forecasts diluted loss per share to be in the range of $0.24 to $0.23. On an adjusted basis, the company forecasts diluted loss per share to be in the range of $0.12 to $0.11 for the second-quarter.
For fiscal year 2017, 2U, Inc projects revenue to be in the range of $269.40 million to $270.90 million. The company expects net loss to be in the range of $26.80 million to $25 million. The company forecasts adjusted net loss to be in the range of $6.20 million to $4.70 million.The company forecasts diluted loss per share to be in the range of $0.56 to $0.52. The company forecasts diluted loss per share to be in the range of $0.13 to $0.10 on adjusted basis.
Operating cash flow turns negative
2U, Inc has spent $11.60 million cash to meet operating activities during the quarter as against cash inflow of $6.28 million in the last year period.
The company has spent $14.29 million cash to meet investing activities during the quarter as against cash outgo of $3.97 million in the last year period.
Cash flow from financing activities was $0.05 million for the quarter, down 92.39 percent or $0.62 million, when compared with the last year period.
Cash and cash equivalents stood at $142.89 million as on Mar. 31, 2017, down 23.47 percent or $43.82 million from $186.71 million on Mar. 31, 2016.
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