Why Ed-Tech Company 2U Shares Are Falling Today

2U, Inc. TWOU shares are slumping in the premarket session on Tuesday.

The company’s fourth-quarter adjusted earnings per share of 48 cents missed the Wall Street estimate of 64 cents. 

Quarterly revenue of $255.66 million missed the street view of $281.438 million. Revenue increased 8%.

Alternative Credential Segment revenue decreased 7% to $92.2 million. Degree Program Segment revenue grew 19% to $163.5 million.

Adjusted EBITDA increased 54% to $90.2 million, with a margin of 35%.

As of December 31, 2023, the company’s cash, cash equivalents, and restricted cash totaled $73.4 million.

Outlook: For the first quarter, the company sees revenue of $195 million-$198 million (estimate: $228.78 million). Net loss is projected to range $(60) million-$(55) million. Adjusted EBITDA is expected to range $10 million-$12 million.

For full year 2024, the company sees revenue of $805 million-$815 million (estimate: $909.48 million). Net loss will be $(90) million-$(85) million, and Adjusted EBITDA is projected to be $120 million-$125 million.

Price Action: TWOU shares are trading lower by 24% to $0.6982 premarket on the last check Tuesday.

Image: Shutterstock/ MD Duran