0001459417 false 0001459417 2019-11-11 2019-11-12 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):

November 12, 2019

 

2U, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

Delaware

(STATE OF INCORPORATION)

 

001-36376   26-2335939
(COMMISSION FILE NUMBER)   (IRS EMPLOYER ID. NUMBER)

 

7900 Harkins Road    
Lanham, MD   20706
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)   (ZIP CODE)

 

(301) 892-4350

(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, $0.001 par value per share TWOU The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 2.02Results of Operations and Financial Condition

 

On November 12, 2019, 2U, Inc. issued a press release announcing its results for the quarter ended September 30, 2019. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated by reference herein.

 

The information in this Item 2.02, and Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any of the Registrant’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any incorporation language in such a filing, except as expressly set forth by specific reference in such a filing.

 

Item 9.01Financial Statements and Exhibits

 

(d)     Exhibits

 

Exhibit Number    Exhibit Description 
99.1   Press release, dated November 12, 2019, “2U, Inc. Reports Results for Third Quarter 2019 .”
104   Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  2U, INC.
   
  By: /s/ Paul S. Lalljie
  Name: Paul S. Lalljie
  Title: Chief Financial Officer

 

Date: November 12, 2019

 

 

 

 

 

Exhibit 99.1

 

2U, Inc. Reports Results for Third Quarter 2019

Delivers revenue growth of 44%

 

 

LANHAM, Md. — November 12, 2019 — 2U, Inc. (Nasdaq: TWOU), a global leader in education technology, today reported financial and operating results for the third quarter ended September 30, 2019 and updated its guidance for full-year 2019.

 

Results for Third Quarter 2019 Compared to Third Quarter 2018

 

Revenue increased 44% to $153.8 million
Graduate Program Segment revenue increased 15% to $103.4 million
Alternative Credential Segment revenue increased 192% to $50.4 million, including $29.2 million in revenue from the Trilogy acquisition completed in May 2019
Net loss increased $131.2 million to $141.1 million, or $(2.23) per share

 

Non-GAAP Results for Third Quarter 2019 Compared to Third Quarter 2018

 

Adjusted net loss increased $25.6 million to $26.2 million, or $(0.41) per share
Adjusted EBITDA loss increased to $10.7 million

 

“Our strong topline growth and recent pipeline wins, bolstered by the success of our strategic M&A, validate our position as a leader in the digital transformation of higher education,” Co-Founder and Chief Executive Officer Christopher “Chip” Paucek said. “2U’s expanding portfolio of 72 top tier universities and over 300 offerings are testaments to the ongoing strength of our partnership model and to the quality of the student outcomes we deliver.”

 

Chief Financial Officer Paul Lalljie commented, “I chose to join 2U because of its mission and unique position as a leader in the education technology market. I feel good about our performance this quarter, and I am confident about the guidance we provided. As we continue to invest in the quality of our solutions, we want to take a closer look at improving the efficiency of our operations. With disciplined cost management and focused execution behind working capital initiatives, we expect to drive improved cash flow progression company-wide. Additionally, we will accelerate our integration of the Trilogy acquisition.”

 

Discussion of Third Quarter 2019 Results

 

Revenue totaled $153.8 million, a 44% increase from $107.0 million in the third quarter of 2018. Graduate Program Segment revenue grew 15% to $103.4 million driven by a 25% increase in full course equivalent enrollments, partially offset by an 8% decrease in average revenue per full course equivalent enrollment. Alternative Credential Segment revenue increased 192% to $50.4 million, driven by full course equivalent enrollments of 14,729.

 

Costs and expenses totaled $288.8 million, a 143% increase from $118.8 million in the third quarter of 2018. This $169.9 million increase was driven by a $70.4 million non-cash impairment of goodwill related to the carrying value of the boot camp business acquired in 2019 within the company’s Alternative Credential Segment, $9.1 million in acquisition-related transaction, integration, and organizational restructuring-related costs, and $59.9 million of incremental operating costs resulting from the acquisition of Trilogy. The remainder is primarily attributable to increases in costs related to direct marketing, personnel, and curriculum and teaching. These cost increases are due to new offerings and growth in existing offerings, increased depreciation and amortization expense associated with implementing new features and capabilities in the company’s platform, and content for the company’s offerings. For a further discussion of the non-cash impairment of goodwill, see Note 4 to the company’s unaudited financial statements included in its periodic report on Form 10-Q for the quarter ended September 30, 2019.

 

 

 

 

As of September 30, 2019, the company's cash and cash equivalents totaled $154.1 million, a decrease of $64.6 million from $218.7 million as of June 30, 2019, and a decrease of $295.7 million from $449.8 million as of December 31, 2018. The $64.6 million decrease from June 30, 2019 was primarily driven by a use of cash from operations of $37.7 million and additions of amortizable intangible assets related to content and technology of $18.5 million. As of September 30, 2019, the company reported outstanding long-term debt of $253.5 million principally related to its term loan facility maturing in May 2024.

 

Business Outlook for Fiscal Year 2019

 

The company updated its full year 2019 guidance measures provided on July 30, 2019:

 

Revenue to range from $570.0 million to $575.0 million, or growth of 38% to 40%
Net loss to range from $238.8 million to $232.8 million, or $(3.89) to $(3.79) per share
Adjusted net loss to range from $78.5 million to $72.5 million
Adjusted EBITDA loss to range from $28.0 million to $22.0 million
Weighted-average shares of common stock outstanding of 61.4 million

 

 

 

 

Non-GAAP Measures

 

To provide investors and others with additional information regarding 2U’s results, the company has disclosed the following non-GAAP financial measures: adjusted EBITDA (loss), adjusted net income (loss), and adjusted net income (loss) per share. The company has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. The company defines adjusted EBITDA (loss) as net income or net loss, as applicable, before net interest income (expense), taxes, depreciation and amortization expense, foreign currency gains or losses, acquisition-related gains or losses, deferred revenue fair value adjustments, transaction costs, integration costs, restructuring-related costs, impairment charges, and stock-based compensation expense. The company defines adjusted net income (loss) as net income or net loss, as applicable, before foreign currency gains or losses, acquisition-related gains or losses, deferred revenue fair value adjustments, transaction costs, integration costs, restructuring-related costs, impairment charges, and stock-based compensation expense. Adjusted net income (loss) per share is calculated as adjusted net income (loss) divided by diluted weighted-average shares of common stock outstanding for periods which result in adjusted net income, and basic weighted-average shares outstanding for periods which result in an adjusted net loss.

 

The company’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate the company’s financial performance. Management believes these non-GAAP financial measures reflect the company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in the company’s business as they exclude expenses that are not reflective of ongoing operating results. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the company’s operating results and prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.

 

The use of adjusted EBITDA (loss), adjusted net income (loss), and adjusted net income (loss) per share measures have certain limitations, as they do not reflect all items of income and expense that affect the company’s operations. The company compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review the company’s financial information in its entirety and not rely on a single financial measure.

 

Conference Call Information

 

What: 2U, Inc.’s third quarter 2019 financial results conference call
When: Tuesday, November 12, 2019
Time: 5 p.m. ET
Live Call: (877) 359-9508
Webcast: investor.2U.com

 

About 2U, Inc. (Nasdaq: TWOU)

 

Eliminating the back row in higher education is not just a metaphor—it’s our mission. For more than a decade, 2U, Inc., a global leader in education technology, has been a trusted partner and brand steward of great universities. We build, deliver, and support more than 300 digital and in-person educational offerings, including graduate degrees, professional certificates, Trilogy-powered boot camps, and GetSmarter short courses. Together with our partners, 2U has positively transformed the lives of more than 170,000 students and lifelong learners. To learn more, visit 2U.com. #NoBackRow

 

 

 

 

Cautionary Language Concerning Forward-Looking Statements

 

This press release contains forward-looking statements regarding 2U, Inc.’s future business expectations, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements regarding the acquisition of Trilogy and future results of the operations and financial position of 2U, including financial targets, business strategy, and plans and objectives for future operations, are forward-looking statements. 2U has based these forward-looking statements largely on its estimates of its financial results and its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs as of the date of this press release. The company undertakes no obligation to update these statements as a result of new information or future events. These forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from the results predicted, including, but not limited to:

 

trends in the higher education market and the market for online education, and expectations for growth in those markets;
the acceptance, adoption and growth of online learning by colleges and universities, faculty, students, employers, accreditors and state and federal licensing bodies;
the company’s ability to comply with evolving regulations and legal obligations related to data privacy, data protection and information security;
the company’s expectations about the potential benefits of its cloud-based software-as-a-service, or SaaS, technology and technology-enabled services to university clients and students;
the company’s dependence on third parties to provide certain technological services or components used in its platform;
the company’s ability to meet the anticipated launch dates of its educational offerings;
the company’s expectations about the predictability, visibility and recurring nature of its business model;
the company’s ability to acquire new university clients and expand its offerings with existing university clients;
its ability to successfully integrate the operations of its acquisitions, including Get Educated International Proprietary Limited, or GetSmarter, and Trilogy Education Services, Inc., or Trilogy, achieve the expected benefits of its acquisitions and manage, expand and grow the combined company;
the company’s expectations regarding the amount of time its cash balances and other available financial resources will be sufficient to fund its operations;
the company’s ability to service its substantial indebtedness and comply with the financial and other restrictive covenants contained in the credit agreement governing its senior secured term loan facility;
the company’s ability to generate sufficient future operating cash flows from recent acquisitions to ensure related goodwill is not impaired;
the company’s ability to execute its growth strategy in the international, undergraduate and non-degree alternative markets;
the company’s ability to continue to acquire prospective students for its offerings;
the company’s ability to affect or increase student retention in its graduate programs;
the company’s ability to attract, hire and retain qualified employees;
the company’s expectations about the scalability of its cloud-based platform;
the company’s expectations regarding future expenses in relation to future revenue; and
potential changes in regulations applicable to the company or its university clients.

 

These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the heading “Risk Factors” in 2U’s Annual Report on Form 10-K for the year ended December 31, 2018, as amended and supplemented by risks and uncertainties under the heading “Risk Factors” in 2U’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 and other reports filed with the Securities and Exchange Commission. Moreover, 2U operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for 2U management to predict all risks, nor can 2U assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements 2U may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated.

 

Investor Relations Contact: Ed Goodwin, 2U, Inc., egoodwin@2U.com

 

Media Contact: Glenda Felden, 2U, Inc., media@2U.com

 

 

 

 

 

2U, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

 

   September 30,
2019
   December 31,
2018
 
    (unaudited)      
Assets          
Current assets          
Cash and cash equivalents  $154,091   $449,772 
Restricted cash   16,739     
Investments       25,000 
Accounts receivable, net   84,797    32,636 
Prepaid expenses and other assets   39,239    14,272 
Total current assets   294,866    521,680 
Property and equipment, net   56,105    52,299 
Right-of-use assets   40,391     
Goodwill   414,027    61,852 
Amortizable intangible assets, net   336,373    136,605 
University payments and other assets, non-current   71,808    34,918 
Total assets  $1,213,570   $807,354 
Liabilities and stockholders’ equity          
Current liabilities          
Accounts payable and accrued expenses  $59,607   $27,647 
Accrued compensation and related benefits   27,256    23,001 
Deferred revenue   58,634    8,345 
Lease liability   7,104     
Other current liabilities   12,362    9,487 
Total current liabilities   164,963    68,480 
Long-term debt   245,856    3,500 
Deferred tax liabilities, net   6,172    6,949 
Lease liability, non-current   62,709     
Other liabilities, non-current   812    23,416 
Total liabilities   480,512    102,345 
Stockholders’ equity          
Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued        
Common stock, $0.001 par value, 200,000,000 shares authorized, 63,388,705 shares issued and outstanding as of September 30, 2019; 57,968,493 shares issued and outstanding as of December 31, 2018   63    58 
Additional paid-in capital   1,180,298    957,631 
Accumulated deficit   (434,804)   (244,166)
Accumulated other comprehensive loss   (12,499)   (8,514)
Total stockholders’ equity   733,058    705,009 
Total liabilities and stockholders’ equity  $1,213,570   $807,354 

 

 

 

 

2U, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited, in thousands, except share and per share amounts)

 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
   2019   2018   2019   2018 
Revenue  $153,798   $106,963   $411,493   $296,674 
Costs and expenses                    
Curriculum and teaching   21,336    6,351    41,345    16,665 
Servicing and support   27,351    16,586    71,518    49,116 
Technology and content development   34,132    16,361    79,969    45,436 
Marketing and sales   93,521    60,548    260,231    171,982 
General and administrative   42,040    18,974    93,471    63,323 
Impairment charge   70,379        70,379     
Total costs and expenses   288,759    118,820    616,913    346,522 
Loss from operations   (134,961)   (11,857)   (205,420)   (49,848)
Interest income   924    1,799    5,087    3,053 
Interest expense   (5,651)   (27)   (8,130)   (81)
Other expense, net   (710)   (273)   (1,093)   (1,493)
Loss before income taxes   (140,398)   (10,358)   (209,556)   (48,369)
Income tax (expense) benefit   (714)   414    18,918    5,207 
Net loss  $(141,112)  $(9,944)  $(190,638)  $(43,162)
Net loss per share, basic and diluted  $(2.23)  $(0.17)  $(3.14)  $(0.78)
Weighted-average shares of common stock outstanding, basic and diluted   63,358,890    57,663,361    60,690,536    55,128,845 
Other comprehensive loss                    
Foreign currency translation adjustments, net of tax of $0 for all periods presented   (5,856)   (2,781)   (3,985)   (12,327)
Comprehensive loss  $(146,968)  $(12,725)  $(194,623)  $(55,489)

 

 

 

 

 

2U, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

 

   Nine Months Ended
September 30,
 
   2019   2018 
Cash flows from operating activities          
Net loss  $(190,638)  $(43,162)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization expense   46,639    23,382 
Stock-based compensation expense   36,086    24,064 
Non-cash lease expense   8,407     
Bad debt expense   1,785     
Impairment charge   70,379     
Changes in operating assets and liabilities:          
Accounts receivable, net   (39,743)   (35,543)
Payments to university clients   (22,257)   (11,066)
Prepaid expenses and other assets   (6,760)   (5,426)
Accounts payable and accrued expenses   12,712    10,796 
Accrued compensation and related benefits   (109)   1,185 
Deferred revenue   20,162    12,210 
Other liabilities, net   (24,263)   (3,976)
Other   1,939    1,493 
Net cash used in operating activities   (85,661)   (26,043)
Cash flows from investing activities          
Purchase of a business, net of cash acquired   (388,004)    
Additions of amortizable intangible assets   (50,950)   (51,713)
Purchases of property and equipment   (11,310)   (8,027)
Purchase of investments   (10,000)   (25,000)
Proceeds from maturities of investments   25,000     
Advances made to university clients   (100)   (300)
Advances repaid by university clients   350    25 
Other   4     
Net cash used in investing activities   (435,010)   (85,015)
Cash flows from financing activities          
Proceeds from issuance of common stock, net of offering costs       330,862 
Proceeds from exercise of stock options   2,942    7,032 
Proceeds from debt   243,726     
Tax withholding payments associated with settlement of restricted stock units   (2,573)   (3,450)
Proceeds from ESPP share purchases   1,895    1,278 
Payments for acquisition of amortizable intangible assets   (1,283)   (4,900)
Payment of debt issuance costs   (1,953)    
Net cash provided by financing activities   242,754    330,822 
Effect of exchange rate changes on cash   (1,025)   (908)
Net (decrease) increase in cash, cash equivalents and restricted cash   (278,942)   218,856 
Cash, cash equivalents and restricted cash, beginning of period   449,772    223,370 
Cash, cash equivalents and restricted cash, end of period  $170,830   $442,226 

 

 

 

 

2U, Inc.

Reconciliation of Non-GAAP Measures

(unaudited)

 

The following table presents a reconciliation of net loss to adjusted net loss for each of the periods indicated:

 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
   2019   2018   2019   2018 
   (in thousands, except share and per share amounts) 
Net loss  $(141,112)  $(9,944)  $(190,638)  $(43,162)
Adjustments:                    
Foreign currency loss   710    273    1,093    1,493 
Amortization of acquired intangible assets   11,096    1,446    17,863    4,723 
Income tax benefit on amortization of acquired intangible assets   (393)   (396)   (1,165)   (1,294)
Acquisition-related income tax expense (benefit)   1,504        (17,758)   (2,987)
Deferred revenue fair value adjustment   5,927        9,279     
Transaction costs   92        4,466     
Integration costs   2,436        2,493     
Restructuring-related costs   6,581        7,174     
Impairment charge   70,379        70,379     
Stock-based compensation expense   16,535    7,933    36,086    24,064 
Total adjustments   114,867    9,256    129,910    25,999 
Adjusted net loss  $(26,245)  $(688)  $(60,728)  $(17,163)
Net loss per share, basic and diluted  $(2.23)  $(0.17)  $(3.14)  $(0.78)
Adjusted net loss per share, basic and diluted  $(0.41)  $(0.01)  $(1.00)  $(0.31)
Weighted-average shares of common stock outstanding, basic and diluted   63,358,890    57,663,361    60,690,536    55,128,845 

 

 

The following table presents a reconciliation of net loss to adjusted EBITDA (loss) for each of the periods indicated:

 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
   2019   2018   2019   2018 
   (in thousands) 
Net loss  $(141,112)  $(9,944)  $(190,638)  $(43,162)
Adjustments:                    
Interest income   (924)   (1,799)   (5,087)   (3,053)
Interest expense   5,651    27    8,130    81 
Foreign currency loss   710    273    1,093    1,493 
Income tax expense (benefit)   714    (414)   (18,918)   (5,207)
Depreciation and amortization expense   22,288    8,599    46,639    23,382 
Deferred revenue fair value adjustment   5,927        9,279     
Transaction costs   92        4,466     
Integration costs   2,436        2,493     
Restructuring-related costs   6,581        7,174     
Impairment charge   70,379        70,379     
Stock-based compensation expense   16,535    7,933    36,086    24,064 
Total adjustments   130,389    14,619    161,734    40,760 
Adjusted EBITDA (loss)  $(10,723)  $4,675   $(28,904)  $(2,402)

 

 

 

 

 

2U, Inc.

Reconciliation of Non-GAAP Measures

(unaudited)

 

The following table presents (i) a reconciliation of net loss guidance to adjusted net income (loss) guidance and adjusted EBITDA (loss) guidance and (ii) a reconciliation of net loss per share guidance to adjusted net income (loss) per share guidance, each at the midpoint of the ranges provided by the company, for each of the periods indicated:

 

    Year Ending
December 31, 2019  
 
    $     $/Share  
    (in millions, except per share amounts)  
Net loss   $ (235.8 )   $ (3.84 )
Foreign currency loss     1.0       0.02  
Amortization of acquired intangible assets     28.4       0.46  
Income tax benefit on amortization of acquired intangible assets     (1.6 )     (0.02 )
Acquisition-related income tax benefit     (17.8 )     (0.29 )
Deferred revenue fair value adjustment     11.1       0.18  
Transaction costs     4.5       0.07  
Integration costs     2.5       0.04  
Restructuring-related costs     8.7       0.14  
Impairment charge     70.4       1.15  
Stock-based compensation expense     53.1       0.86  
Adjusted net loss     (75.5 )     (1.23 )
Interest income     (5.5 )     *  
Interest expense     14.1       *  
Income tax expense     0.5       *  
Depreciation and amortization expense     41.4       *  
Adjusted EBITDA loss   $ (25.0 )     *  
Projected weighted-average shares of common stock outstanding, basic             61.4  

 

 

 

*Not provided.

 

 

 

 

2U, Inc.

Key Business and Financial Performance Metrics

(unaudited)

 

Full Course Equivalent Enrollments

 

Graduate Program Segment

 

The following table sets forth the full course equivalent enrollments and average revenue per full course equivalent enrollment in the company’s Graduate Program Segment for the last eight quarters.

 

   Q4 ‘17   Q1 ‘18   Q2 ‘18   Q3 ‘18   Q4 ‘18   Q1 ‘19   Q2 ‘19   Q3 ‘19 
Graduate Program Segment full course equivalent enrollments   27,082    29,770    30,548    32,665    34,695    39,512    39,180    40,910 
Graduate Program Segment average revenue per full course equivalent enrollment  $2,758   $2,706   $2,658   $2,747   $2,792   $2,637   $2,588   $2,527 

 

 

Alternative Credential Segment

 

The following table sets forth the full course equivalent enrollments and average revenue per full course equivalent enrollment in the company’s Alternative Credential Segment for the last eight quarters.

 

   Q4 ‘17   Q1 ‘18   Q2 ‘18   Q3 ‘18   Q4 ‘18   Q1 ‘19   Q2 ‘19*   Q3 ‘19* 
Alternative Credential Segment full course equivalent enrollments   6,751    6,002    8,222    8,937    9,041    9,128    12,662    14,729 
Alternative Credential Segment average revenue per full course equivalent enrollment  $1,777   $1,954   $1,972   $1,930   $2,015   $1,979   $2,955   $3,825 

 

 

 

*The Trilogy acquisition, completed on May 22, 2019, is fully incorporated in the company’s results from that date forward. Average revenue per full course equivalent enrollment for the company’s Alternative Credential Segment includes $3.3 million and $6.0 million of purchase accounting adjustments for the second and third quarters of 2019, respectively.