2U Inc. (TWOU 1.00%) announced fourth-quarter 2018 results on Monday after the market closed, showcasing accelerated global growth and beating guidance yet again as the online education-platform company continues to expand its reach.

With shares up more than 8% on Tuesday as of this writing, let's buckle down for a closer look at how 2U ended the year and what investors can expect next.

Student working on a laptop.


2U results: The raw numbers


Q4 2018

Q4 2017

Year-Over-Year Growth


$115.1 million

$86.7 million


GAAP net income (loss)

$4.8 million

$0.5 million


GAAP earnings (loss) per share




DATA SOURCE: 2U, INC. GAAP = generally accepted accounting principles.

What happened with 2U this quarter?

  • Adjusted for items like stock-based compensation and acquisition costs, 2U's (non-GAAP) net income was $13.7 million, or $0.23 per share, up from $7.9 million, or $0.14 per share, in the same year-ago period.
  • By comparison, 2U's guidance provided in November called for revenue in the range of $114.4 million to $115.3 million, GAAP earnings per share of $0.04 to $0.05, and adjusted earnings per share of $0.20 to $0.21.
  • Adjusted EBITDA grew 58.3% to $20.1 million, right at the midpoint of guidance, for a range of $19.8 million to $20.4 million.
  • Recent new partnership and contract highlights include:
    • Two new online graduate degrees with Tufts University School of Medicine,
    • a new collaboration with LinkedIn for complimentary access to LinkedIn Premium Career for students in 2U-powered programs,
    • a partnership with Keypath Education to enable 2U to support smaller or lower-tuition degree programs than it typically supports,
    • an extended partnership with The We Company to provide Global Access Memberships to over 425 WeWork locations in 27 countries for faculty in 2U programs and lead conveners in its short courses,
    • a new online MBA with EGADE Business School at Tecnologico de Monterrey, Mexico -- the company's first full degree program in Latin America -- expected to launch this fall,
    • an expanded partnership to launch no fewer than 10 new online short courses across various professional disciplines with Syracuse University, and
    • a new online Master of Science in social administration graduate program with Case Western Reserve University.

Check out the latest 2U earnings call transcript.

What management had to say

2U co-founder and CEO Chip Paucek stated:

The strength and resilience of 2U's business is clear from our 2018 fourth quarter and full-year results, and reflects the continued expansion and increasing diversity of our degree and short course portfolios, both domestically and internationally. Our commitment to investing in sustained growth not only sets 2U apart in the education technology industry, but will allow us to better meet the evolving needs of our partners and the marketplace.

Looking forward

For the first quarter of 2019, 2U expects revenue ranging from $121.5 million to $122.1 million, an adjusted EBITDA loss of $4.6 million to $4.2 million, a GAAP net loss per share of $0.38 to $0.37, and an adjusted net loss per share of $0.19 to $0.18.

As such, for the full year 2019, 2U now sees revenue of $546.6 million to $550.8 million -- a slight increase at the midpoint from its preliminary guidance provided in November -- with adjusted EBITDA of $11.8 million to $14.2 million, a net loss per share of $1.37 to $1.33, and an adjusted net loss per share of $0.37 to $0.33. 

In the end, from 2U's relative outperformance in the fourth quarter to this solid forward outlook, supported by the company's steadily expanding worldwide list of partners, programs, and short courses, this report offered nothing not to like for long-term 2U shareholders. 2U stock is climbing accordingly.