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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):

July 30, 2020

 

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 July 30, 2020, 2U, Inc. (the “Company”) issued a press release announcing its results for the quarter ended June 30, 2020. 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 Company’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 July 30, 2020, “2U, Inc. Reports Results for Second Quarter 2020.”
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: July 30, 2020

 

 

 

 

Exhibit 99.1

 

2U, Inc. Reports Results for Second Quarter 2020

Delivers revenue growth of 35%

 

LANHAM, Md. — July 30, 2020 — 2U, Inc. (Nasdaq: TWOU), a global leader in education technology, today reported financial and operating results for the second quarter ended June 30, 2020.

 

Results for Second Quarter 2020 Compared to Second Quarter 2019

Revenue increased 35% to $182.7 million
Graduate Program Segment revenue increased 14% to $115.7 million
Alternative Credential Segment revenue increased 97% to $67.0 million, including $36.6 million in revenue from Trilogy, acquired in May 2019
Net loss increased $38.2 million to $66.2 million, or $1.03 per share

 

Non-GAAP Results for Second Quarter 2020 Compared to Second Quarter 2019

Adjusted net loss was $21.8 million, or $0.34 per share, compared to adjusted net loss of $25.8 million, or $0.43 per share
Adjusted EBITDA loss was $2.1 million, compared to a loss of $15.0 million

 

“In these complex and challenging times, the importance of 2U’s mission and the value we deliver for our partners and their students has never been more clear,” Co-Founder and CEO Christopher “Chip” Paucek said. “As universities accelerate their digital transformations and more students affirmatively choose to pursue an education online, we believe our strong relationships with leading universities and the unmatched scale and quality of our portfolio of offerings position us well for future growth.”

 

“We are driving significant improvement in key profitability and cash flow metrics while maintaining quality, enhancing operational efficiency, and executing on growth opportunities,” said Chief Financial Officer Paul Lalljie. “We delivered a significant improvement in free cash flow in the second quarter and expect to achieve EBITDA profitability next quarter and for the full year. We also increased our financial flexibility with our recent convertible senior notes offering and revolving line of credit.”

 

Discussion of Second Quarter 2020 Results

 

Revenue totaled $182.7 million, a 35% increase from $135.5 million in the second quarter of 2019. Graduate Program Segment revenue grew 14% to $115.7 million driven by an 18% increase in full course equivalent (“FCE”) enrollments, partially offset by a 3% decrease in average revenue per FCE enrollment. Alternative Credential Segment revenue increased 97% to $67.0 million, driven by FCE enrollments of 20,435. The acquisition of Trilogy was completed on May 22, 2019, making this quarter the last period for which comparative period results do not exist.

 

Costs and expenses totaled $231.8 million, a 28% increase from $181.5 million in the second quarter of 2019. This $50.3 million increase was driven by $33.8 million of incremental operating costs related to Trilogy, with the remaining increase primarily attributable to personnel and personnel-related expense, curriculum and teaching costs, and depreciation and amortization expense, partially offset by decreased spend on travel and entertainment due to cost efficiencies and the impact of COVID-19.

 

As of June 30, 2020, the company’s cash, cash equivalents, and restricted cash totaled $213.0 million, an increase of $23.1 million from $189.9 million as of December 31, 2019. The cash balance as of June 30, 2020 reflects net proceeds from the convertible senior notes offering. As of June 30, 2020, the company’s outstanding borrowings were $385.3 million, principally related to the issuance of its convertible senior notes.

 

 

 

 

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), unlevered free cash flow, 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, deferred revenue fair value adjustments, transaction costs, integration costs, restructuring-related costs, stockholder activism costs, impairment charges, losses on debt extinguishment, and stock-based compensation expense. The company defines unlevered free cash flow as net cash provided by (used in) operating activities, less capital expenditures, payments to university clients, restructuring-related and certain other non-ordinary cash payments, and cash interest payments on debt. 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, stockholder activism costs, impairment charges, losses on debt extinguishment, 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 that result in adjusted net income, and basic weighted-average shares outstanding for periods that result in an adjusted net loss. As of the date of this earnings release, we revised our definitions of adjusted EBITDA (loss) and adjusted net income (loss) to exclude losses on debt extinguishment. We believe this change is useful to investors because we did not have a loss on debt extinguishment in prior periods, and as a result, excluding the impact of such a loss beginning this period facilitates a period-to-period comparison.

 

The company’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, to understand cash that is generated by or available for operational expenses and investment in the business after capital expenditures, 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), unlevered free cash flow, adjusted net income (loss), and adjusted net income (loss) per share measures has 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 directly 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 second quarter 2020 financial results conference call
When:   Thursday, July 30, 2020
Time:   4:30 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 435 digital and in-person educational offerings, including undergraduate and 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 245,000 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 impact of competition on the company’s industry and innovations by competitors;

 

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 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 expectations about the predictability, visibility and recurring nature of its business model;

 

the company’s ability to meet the anticipated launch dates of its degree programs, short courses and boot camps;

 

the company’s ability to acquire new university clients and expand its degree programs, short courses and boot camps with existing university clients;

 

the company’s ability to successfully integrate the operations of its acquisitions, including Trilogy, to achieve the expected benefits of its acquisitions and manage, expand and grow the combined company;

 

the company’s ability to refinance its indebtedness on attractive terms, if at all, to better align with its focus on profitability;

 

the company’s ability to service its substantial indebtedness and comply with the covenants and conversion obligations contained in the indenture governing its convertible senior notes and the credit agreement governing its revolving credit 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 recruit prospective students for its offerings;

 

the company’s ability to maintain or increase student retention rates in its degree programs;

 

the company’s ability to attract, hire and retain qualified employees;

 

the company’s expectations about the scalability of its cloud-based platform;

 

potential changes in regulations applicable to the company or its university clients;

 

 

 

 

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 impact and cost of stockholder activism;

 

the impact of any natural disasters or public health emergencies, such as the coronavirus disease 2019 (“COVID-19”) pandemic;

 

the company’s expectations regarding the effect of the capped call transactions and regarding actions of the option counterparties and/or their respective affiliates; and

 

other factors beyond the company’s control.

 

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 our Annual Report on Form 10-K for the year ended December 31, 2019, as amended and supplemented by risks and uncertainties under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 and other SEC filings. 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)

 

   June 30,
2020
   December 31,
2019
 
   (unaudited)     
Assets          
Current assets          
Cash and cash equivalents  $194,803   $170,593 
Restricted cash   18,228    19,276 
Accounts receivable, net   71,580    33,655 
Prepaid expenses and other assets   40,378    37,424 
Total current assets   324,989    260,948 
Property and equipment, net   55,066    57,643 
Right-of-use assets   49,813    43,401 
Goodwill   406,340    418,350 
Amortizable intangible assets, net   320,559    333,075 
University payments and other assets, non-current   75,793    73,413 
Total assets  $1,232,560   $1,186,830 
Liabilities and stockholders’ equity          
Current liabilities          
Accounts payable and accrued expenses  $84,541   $65,381 
Accrued compensation and related benefits   29,090    21,885 
Deferred revenue   77,071    48,833 
Lease liability   8,484    7,320 
Other current liabilities   13,785    12,535 
Total current liabilities   212,971    155,954 
Long-term debt   263,129    246,620 
Deferred tax liabilities, net   2,424    5,133 
Lease liability, non-current   73,592    66,974 
Other liabilities, non-current   1,073    899 
Total liabilities   553,189    475,580 
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, 64,300,599 shares issued and outstanding as of June 30, 2020; 63,569,109 shares issued and outstanding as of December 31, 2019   64    63 
Additional paid-in capital   1,306,483    1,197,379 
Accumulated deficit   (605,661)   (479,388)
Accumulated other comprehensive loss   (21,515)   (6,804)
Total stockholders’ equity   679,371    711,250 
Total liabilities and stockholders’ equity  $1,232,560   $1,186,830 

 

 

 

 

2U, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2020   2019   2020   2019 
Revenue  $182,687   $135,461   $358,166   $257,695 
Costs and expenses                    
Curriculum and teaching   26,256    13,308    46,734    20,009 
Servicing and support   30,294    23,993    60,827    44,167 
Technology and content development   37,307    26,043    72,817    45,837 
Marketing and sales   98,341    89,749    197,556    166,710 
General and administrative   39,554    28,408    83,207    51,431 
Total costs and expenses   231,752    181,501    461,141    328,154 
Loss from operations   (49,065)   (46,040)   (102,975)   (70,459)
Interest income   154    1,814    667    4,163 
Interest expense   (6,518)   (2,424)   (12,011)   (2,479)
Loss on debt extinguishment   (11,671)       (11,671)    
Other income (expense), net   570    (13)   (1,701)   (383)
Loss before income taxes   (66,530)   (46,663)   (127,691)   (69,158)
Income tax benefit   363    18,691    1,418    19,632 
Net loss  $(66,167)  $(27,972)  $(126,273)  $(49,526)
Net loss per share, basic and diluted  $(1.03)  $(0.46)  $(1.98)  $(0.83)
Weighted-average shares of common stock outstanding, basic and diluted   64,075,405    60,516,662    63,850,869    59,334,246 
Other comprehensive loss                    
Foreign currency translation adjustments, net of tax of $0 for all periods presented   1,404    2,243    (14,711)   1,871 
Comprehensive loss  $(64,763)  $(25,729)  $(140,984)  $(47,655)

 

 

 

 

2U, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

   Six Months Ended June 30, 
   2020   2019 
Cash flows from operating activities          
Net loss  $(126,273)  $(49,526)
Adjustments to reconcile net loss to net cash used in operating activities:          
Non-cash interest expense   5,675    520 
Depreciation and amortization expense   47,470    24,351 
Stock-based compensation expense   41,961    19,551 
Non-cash lease expense   7,299    5,264 
Provision for credit losses   1,267    993 
Loss on debt extinguishment   11,671     
Changes in operating assets and liabilities, net of assets and liabilities acquired:          
Accounts receivable, net   (39,521)   (25,548)
Payments to university clients   4,354    (20,060)
Prepaid expenses and other assets   (8,774)   (8,796)
Accounts payable and accrued expenses   19,606    18,081 
Accrued compensation and related benefits   7,383    (5,964)
Deferred revenue   28,843    15,849 
Other liabilities, net   (9,299)   (23,056)
Other   1,694    392 
Net cash used in operating activities   (6,644)   (47,949)
Cash flows from investing activities          
Purchase of a business, net of cash acquired   (949)   (387,815)
Additions of amortizable intangible assets   (32,497)   (32,430)
Purchases of property and equipment   (4,254)   (8,135)
Purchase of investments       (5,000)
Proceeds from maturities of investments       25,000 
Advances made to university clients       (100)
Advances repaid by university clients   275    200 
Net cash used in investing activities   (37,425)   (408,280)
Cash flows from financing activities          
Proceeds from debt   371,708    243,726 
Payments on debt   (250,409)    
Payment of debt issuance costs   (3,419)   (1,953)
Purchases of capped calls in connection with issuance of convertible senior notes   (50,540)    
Prepayment premium on extinguishment of senior secured term loan facility   (2,528)    
Proceeds from exercise of stock options   1,825    2,380 
Tax withholding payments associated with settlement of restricted stock units   (464)   (2,558)
Proceeds from employee stock purchase plan share purchases   1,771     
Payments for acquisition of amortizable intangible assets       (1,283)
Net cash provided by financing activities   67,944    240,312 
Effect of exchange rate changes on cash   (713)   (371)
Net increase (decrease) in cash, cash equivalents and restricted cash   23,162    (216,288)
Cash, cash equivalents and restricted cash, beginning of period   189,869    449,772 
Cash, cash equivalents and restricted cash, end of period  $213,031   $233,484 

 

 

 

 

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
June 30,
   Six Months Ended
June 30,
 
   2020   2019   2020   2019 
   (in thousands, except share and per share amounts) 
Net loss  $(66,167)  $(27,972)  $(126,273)  $(49,526)
Adjustments:                    
Foreign currency (gain) loss   (570)   13    1,701    383 
Amortization of acquired intangible assets   10,605    5,341    21,388    6,767 
Income tax benefit on amortization of acquired intangible assets   (331)   (381)   (710)   (772)
Acquisition-related income tax benefit       (19,262)       (19,262)
Deferred revenue fair value adjustment       3,352        3,352 
Transaction and integration costs   359    3,093    1,083    5,024 
Restructuring-related costs   196        484     
Stockholder activism costs   1,347        5,586     
Loss on debt extinguishment   11,671        11,671     
Stock-based compensation expense   21,091    9,967    41,961    19,551 
Total adjustments   44,368    2,123    83,164    15,043 
Adjusted net loss  $(21,799)  $(25,849)  $(43,109)  $(34,483)
Net loss per share, basic and diluted  $(1.03)  $(0.46)  $(1.98)  $(0.83)
Adjusted net loss per share, basic and diluted  $(0.34)  $(0.43)  $(0.68)  $(0.58)
Weighted-average shares of common stock outstanding, basic and diluted   64,075,405    60,516,662    63,850,869    59,334,246 

 

 

 

 

2U, Inc.

Reconciliation of Non-GAAP Measures

(unaudited)

 

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

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2020   2019   2020   2019 
   (in thousands) 
Net loss  $(66,167)  $(27,972)  $(126,273)  $(49,526)
Adjustments:                    
Net interest expense (income)   6,364    610    11,344    (1,684)
Foreign currency (gain) loss   (570)   13    1,701    383 
Income tax benefit   (363)   (18,691)   (1,418)   (19,632)
Depreciation and amortization expense   23,985    14,653    47,470    24,351 
Deferred revenue fair value adjustment       3,352        3,352 
Transaction and integration costs   359    3,093    1,083    5,024 
Restructuring-related costs   196        484     
Stockholder activism costs   1,347        5,586     
Loss on debt extinguishment   11,671        11,671     
Stock-based compensation expense   21,091    9,967    41,961    19,551 
Total adjustments   64,080    12,997    119,882    31,345 
Adjusted EBITDA (loss)  $(2,087)  $(14,975)  $(6,391)  $(18,181)

 

 

 

 

2U, Inc.

Reconciliation of Non-GAAP Measures

(unaudited)

 

The following table presents a reconciliation of net cash used in operating activities to unlevered free cash flow for each of the twelve-month periods indicated:

 

   Twelve Months Ended 
   June 30,
2020
   March 31,
 2020
   December 31,
 2019
   September 30,
2019
 
   (in thousands) 
Net cash used in operating activities  $(10,669)  $(29,309)  $(51,974)  $(62,738)
Additions to amortizable intangible assets   (64,990)   (67,161)   (64,923)   (64,427)
Purchases of property and equipment   (9,536)   (12,693)   (13,421)   (15,279)
Payments on acquisition of amortizable intangible assets   (897)   (897)   (2,180)   (1,283)
Payments to university clients   7,500    14,925    26,100    26,450 
Non-ordinary cash payments*   17,874    19,544    13,989    11,008 
Free cash flow   (60,718)   (75,591)   (92,409)   (106,269)
Cash interest payments on debt   16,475    17,064    12,147    7,128 
Unlevered free cash flow  $(44,243)  $(58,527)  $(80,262)  $(99,141)

 

 

*Non-ordinary cash payments include transaction, integration, restructuring-related and stockholder activism costs.

 

 

 

 

2U, Inc.

Key Financial Performance Metrics

(unaudited)

Full Course Equivalent Enrollments

 

Graduate Program Segment

 

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

   Q2 ‘20   Q1 ‘20   Q4 ‘19   Q3 ‘19   Q2 ‘19   Q1 ‘19   Q4 ‘18   Q3 ‘18 
Graduate Program Segment FCE enrollments   46,142    45,734    41,704    40,910    39,180    39,512    34,695    32,665 
Graduate Program Segment average revenue per FCE enrollment  $2,507   $2,590   $2,595   $2,527   $2,588   $2,637   $2,792   $2,747 

 

Alternative Credential Segment

 

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

   Q2 ‘20   Q1 ‘20   Q4 ‘19   Q3 ‘19   Q2 ‘19   Q1 ‘19   Q4 ‘18   Q3 ‘18 
Alternative Credential Segment FCE enrollments   20,435    15,141    14,639    14,729    12,662    9,128    9,041    8,937 
Alternative Credential Segment average revenue per FCE enrollment*  $3,279   $3,766   $3,883   $3,825   $2,955   $1,979   $2,015   $1,930 

 

 

*The Trilogy acquisition was completed on May 22, 2019. Average revenue per FCE enrollment for the company’s Alternative Credential Segment includes $3.3 million, $6.0 million and $1.9 million of purchase accounting adjustments for the second, third and fourth quarters of 2019, respectively.