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Segment and Geographic Information | 12 Months Ended
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Dec. 31, 2019
Segment Reporting [Abstract] |
Segment and Geographic Information | Segment and Geographic Information The Company has two reportable segments: the Graduate Program Segment and the Alternative Credential Segment (formerly known as the Short Course Segment). The Company’s reportable segments are determined based on (i) financial information reviewed by the chief operating decision maker, the Chief Executive Officer (“CEO”), (ii) internal management and related reporting structure, and (iii) the basis upon which the CEO makes resource allocation decisions. The Company’s segments did not change as a result of the acquisition of Trilogy. The Company’s Graduate Program Segment includes the technology and services provided to nonprofit colleges and universities to enable the online delivery of degree programs. The Company’s Alternative Credential Segment includes the premium online short courses and technical skills-based boot provided through relationships with nonprofit colleges and universities. Graduate Program Segment For the year ended December 31, 2019, one university client accounted for 10% or more of the Company’s consolidated revenue, with $83.5 million, or approximately 15% of the Company’s consolidated revenue. For the year ended December 31, 2018, three university clients each accounted for 10% or more of the Company’s consolidated revenue, as follows: $86.9 million, $54.2 million and $42.7 million, which equaled 21%, 13% and 10% of the Company’s consolidated revenue, respectively. For the year ended December 31, 2017, four university clients each accounted for 10% or more of the Company’s consolidated revenue, as follows: $77.6 million, $48.2 million, $30.1 million and $28.3 million, which equaled 27%, 17%, 11% and 10% of the Company’s consolidated revenue, respectively. As of December 31, 2019, two university clients each accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, as follows: $6.1 million and $4.9 million, which equaled 18% and 15% of the Company’s consolidated accounts receivable, net balance, respectively. As of December 31, 2018, two university clients each accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, as follows: $11.9 million and $11.8 million, which equaled 36% and 36% of the Company’s consolidated accounts receivable, net balance, respectively. Alternative Credential Segment For the year ended December 31, 2019, 2018 and 2017, there were no customers or individual university clients that had revenue associated with it that accounted for 10% or more of the Company’s consolidated revenue. In addition, as of December 31, 2019 and December 31, 2018, no customers had accounts receivable, net balances that accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, as customers are individual students or third parties paying on their behalf, rather than university clients. For the year ended December 31, 2019, offerings associated with one university client accounted for 10% or more of the segment’s revenue, with $33.9 million, or approximately 22% of the segment’s revenue. For the year ended December 31, 2018, offerings associated with three university clients each accounted for 10% or more of the segment’s revenue, and when combined, accounted for approximately 81% of the segment’s revenue. For the year ended December 31, 2017, offerings associated with three university clients each accounted for 10% or more of the segment’s revenue, and when combined, accounted for approximately 82% of the segment’s revenue. Segment Performance The following table summarizes financial information regarding each reportable segment’s results of operations for the periods presented:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
| (in thousands)
Revenue by segment* |  |  |  |  |  |  |
Graduate Program Segment | $ | 417,206 |  |  | $ | 348,361 |  |  | $ | 270,432 |
Alternative Credential Segment | 157,465 |  |  | 63,408 |  |  | 16,320 |
Total revenue | $ | 574,671 |  |  | $ | 411,769 |  |  | $ | 286,752 |
Segment profitability** |  |  |  |  |  |  |
Graduate Program Segment | $ | 5,770 |  |  | $ | 16,839 |  |  | $ | 13,022 |
Alternative Credential Segment | (29,716 | ) |  | 816 |  |  | (1,606 | )
Total segment profitability | $ | (23,946 | ) |  | $ | 17,655 |  |  | $ | 11,416 |
Segment profitability margin*** |  |  |  |  |  |  |
Graduate Program Segment | 1.4 | % |  | 4.8 | % |  | 4.8 | %
Alternative Credential Segment | (18.9 | ) |  | 1.3 |  |  | (9.8 | )
Total segment profitability margin | (4.2 | )% |  | 4.3 | % |  | 3.9 | %
* | The Company has excluded immaterial amounts of intersegment revenue from the years ended December 31, 2019, 2018 and 2017.
** | The Company defines segment profitability 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, shareholder activism costs, impairment charges, and stock-based compensation expense. Some or all of these items may not be applicable in any given reporting period.
*** | The Company defines segment profitability margin as segment profitability as a percentage of the respective segment’s revenue.
The following table reconciles net loss to total segment profitability:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
| (in thousands)
Net loss | $ | (235,222 | ) |  | $ | (38,330 | ) |  | $ | (29,423 | )
Adjustments: |  |  |  |  |
Interest income | (5,800 | ) |  | (5,173 | ) |  | (371 | )
Interest expense | 13,419 |  |  | 108 |  |  | 87 |
Foreign currency loss | 707 |  |  | 1,722 |  |  | 866 |
Income tax benefit | (19,860 | ) |  | (4,867 | ) |  | (1,297 | )
Depreciation and amortization expense | 69,843 |  |  | 32,785 |  |  | 19,624 |
Deferred revenue fair value adjustment | 11,175 |  |  | — |  |  | — |
Transaction costs | 4,786 |  |  | — |  |  | — |
Integration costs | 3,255 |  |  | — |  |  | — |
Restructuring-related costs | 10,826 |  |  | — |  |  | — |
Shareholder activism costs | 1,042 |  |  | — |  |  | — |
Impairment charge | 70,379 |  |  | — |  |  | — |
Stock-based compensation expense | 51,504 |  |  | 31,410 |  |  | 21,930 |
Total adjustments | 211,276 |  |  | 55,985 |  |  | 40,839 |
Total segment profitability | $ | (23,946 | ) |  | $ | 17,655 |  |  | $ | 11,416 |
The Company’s total assets by segment are as follows:
| December 31, 2019 |  | December 31, 2018
| (in thousands)
Total assets |  |  |  |  |
Graduate Program Segment | $ | 507,187 |  |  | $ | 702,827 |
Alternative Credential Segment | 679,643 |  |  | 104,527 |
Total assets | $ | 1,186,830 |  |  | $ | 807,354 |
Trade Accounts Receivable and Contract Liabilities The Company’s trade accounts receivable and contract liabilities in each segment are as follows:
| December 31, 2019 |  | December 31, 2018
| (in thousands)
Trade accounts receivable |  |  |  |  |
Graduate Program Segment accounts receivable, net of allowance for doubtful accounts of $0 for all periods presented | $ | 3,454 |  |  | $ | 31,110 |
Graduate Program Segment unbilled revenue | 12,123 |  |  | 265 |
Alternative Credential Segment accounts receivable, net of allowance for doubtful accounts of $1.3 million and $257 thousand as of December 31, 2019 and 2018, respectively | 12,436 |  |  | 982 |
Alternative Credential Segment unbilled accounts receivable | 5,642 |  |  | — |
Total trade accounts receivable | $ | 33,655 |  |  | $ | 32,357 |
Contract liabilities |  |  |  |  |
Graduate Program Segment deferred revenue | $ | 2,210 |  |  | $ | 2,864 |
Alternative Credential Segment deferred revenue | 46,623 |  |  | 5,481 |
Total contract liabilities | $ | 48,833 |  |  | $ | 8,345 |
For the Graduate Program Segment, revenue recognized during the years ended December 31, 2019 and 2018 that was included in the deferred revenue balance at the beginning of each year was $2.4 million and $2.5 million, respectively. For the Alternative Credential Segment, revenue recognized during the years ended December 31, 2019 and 2018 that was included in the deferred revenue balance at the beginning of the year was $5.4 million and $4.5 million, respectively. Contract Acquisition Costs The Graduate Program Segment had $0.5 million and $0.3 million of net capitalized contract acquisition costs capitalized primarily within university payments and other assets, non-current on the consolidated balance sheets as of December 31, 2019 and 2018, respectively. For the year ended December 31, 2019, the Company capitalized $0.2 million and recorded an immaterial amount of amortization expense in the Graduate Program Segment. Geographical Information The Company’s non-U.S. revenue is based on the currency of the country in which the university client primarily operates. The Company’s non-U.S. revenue was $40.8 million, $33.9 million and $10.0 million for the years ended December 31, 2019, 2018 and 2017, respectively, substantially all of which was sourced from the Alternative Credential Segment’s operations outside of the U.S. The Company’s long-lived tangible assets in non-U.S. countries as of December 31, 2019 and 2018 totaled approximately $2.7 million and $1.2 million, respectively.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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