2U Inc (NASDAQ: TWOU) stock rose over 7.5% in the pre-market session on 25th Feb, 2019 (Source: Google finance) after the company in the fourth quarter of FY 18 has reported the adjusted net income of $13.7 million compared to $7.9 million in the fourth quarter of 2017. Looking ahead to 2020, TWOU have a target of launching 21 programs. Currently the company have two so far, with Tech Monterrey moving into 2019, Tufts Education shifted from 2019 to 2020. As a reminder, small shifts in slotting are normal. The company has also announced the social work at Case Western Reserve University, a top 10 program in the discipline, with a major existing online presence. This program was run by a competitor for some time and has now come to the company.
On the top line, revenue for the fourth quarter was $115.1 million, which is 33% growth over Q4 2017. For 2018, TWOU finished with $411.8 million revenue, a 44% rise over last year. The adjusted EBITDA was $20.1 million for the fourth quarter and was $17.7 million for the year.
Moreover, in the Graduate Program segment, year-over-year revenue growth was 29.7% for the fourth quarter and 28.8% for the year, with the Short Course segment reporting year-over-year revenue growth of 51.9% and 288.5% for the quarter and the year respectively. Graduate Program revenue growth continued to be driven primarily by an increase in full course equivalents. For the fourth quarter, FCE showed a year-over-year increase of 28.1%, enhanced slightly by a 1.2% increase in average revenue per FCE.
For FY 19, the company expects the earnings per share to be in the range of $-0.19–0.18 for the period, compared to the Thomson Reuters consensus earnings per share estimate of $-0.21. The company expects revenue to be in the range of $121.5-122.1 million, compared to the consensus revenue estimate of $121.72 million.2U also updated its FY 2019 guidance to $-0.37–0.33 EPS.
Additionally, for FY 19 TWOU expects net loss margin of between (23.4)% and (22.9)% for the first half of the year, adjusted net loss margin to be between (12.6)% and (12.1)% for the first half of the year; third quarter adjusted net loss and fourth quarter adjusted net income somewhat more skewed than in the comparable 2018 periods, and adjusted EBITDA (loss) margin of between (6.9)% and (6.5)% for the first half of the year; similar distribution of adjusted EBITDA in the third and fourth quarter as in the comparable 2018 periods.