2U Inc's shares fell sharply on Friday after the online education company reported a wider-than-expected third-quarter loss and revised down its full-year revenue guidance.
The online education company’s shares sank 58% to $1.05.
2U reported a 1% decline in revenue to $229.7 million for the three months to September 30, 2023. Its adjusted net loss widened from $0.05 to $0.15 per share, worse than the $0.13 expected by Wall Street analysts.
“While our third quarter results did not meet our expectations, there are bright spots in our return to profitable growth,” co-founder and CEO Christopher Paucek commented in a statement.
"Our edX platform uniquely positions us to capitalize on the demand shift to more skill-based courses and the advancements in technology, including AI, with our diverse portfolio of offerings. We believe 2U will benefit from the meaningful long-term tailwinds from this shift in demand and our transition to a platform company.”
For the full year, 2U has revised its revenue guidance to between $965 million and $990 million, down from $985 million to $990 million.
In a separate announcement on Saturday, 2U announced it has signed contracts with six universities to launch 50 new degree programs under its 'flex' degree partnership model, with the majority launching in 2024.
The new online degrees will be offered by four new 2U partners – Albany College of Pharmacy and Health Sciences (ACPHS), Hawai'i Pacific University (HPU), King's College London, and Maryville University – and two existing 2U partners, Emerson College and University of Cape Town (UCT).
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