v3.20.2
Segment and Geographic Information
 6 Months Ended
Jun. 30, 2020
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. 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 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 camps provided through relationships with nonprofit colleges and universities.
Graduate Program Segment
        For the three months ended June 30, 2020, one university client accounted for 10% or more of the Company’s consolidated revenue, contributing $18.8 million, or approximately 10% of the Company’s consolidated revenue. For the three months ended June 30, 2019, one university client accounted for 10% or more of the Company’s consolidated revenue, contributing $21.2 million, or approximately 16 % of the Company’s consolidated revenue.
For the six months ended June 30, 2020, one university client accounted for 10% or more of the Company’s consolidated revenue, contributing $36.3 million, or approximately 10% of the Company’s consolidated revenue. For the six months ended June 30, 2019, one university client accounted for 10% or more of the Company’s consolidated revenue, contributing $43.8 million, or approximately 17% of the Company’s consolidated revenue.
        As of June 30, 2020, one university client accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, contributing $15.2 million, or approximately 21% of the Company’s consolidated accounts receivable, net balance. As of December 31, 2019, two university clients each accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, contributing $6.1 million and $4.9 million, or approximately 18% and 15% of the Company’s consolidated accounts receivable, net balance, respectively.
Alternative Credential Segment
        For the three and six months ended June 30, 2020 and 2019, there were no customers or individual university clients that had associated offerings that accounted for 10% or more of the Company’s consolidated revenue. In addition, as of June 30, 2020 and December 31, 2019, 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 three months ended June 30, 2020, offerings associated with one university client accounted for 10% or more of the segment’s revenue, contributing $9.2 million, or approximately 14% of the segment’s revenue. For the three months ended June 30, 2019, offerings associated with two university clients each accounted for 10% or more of the segment’s revenue, and when combined, accounted for approximately 37% of the segment’s revenue.
For the six months ended June 30, 2020, offerings associated with one university client accounted for 10% or more of the segment’s revenue, contributing $17.1 million, or approximately 14% of the segment’s revenue. For the six months ended June 30, 2019, offerings associated with three university clients each accounted for 10% or more of the segment’s revenue, and when combined, accounted for approximately 56% of the segment’s revenue.
Segment Performance
        The following table presents financial information regarding each of the Company’s reportable segment’s results of operations for each of the periods indicated.
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2020201920202019
 (dollars in thousands)
Revenue by segment*  
Graduate Program Segment$115,685  $101,403  $234,142  $205,577  
Alternative Credential Segment67,002  34,058  124,024  52,118  
Total revenue$182,687  $135,461  $358,166  $257,695  
Segment profitability**  
Graduate Program Segment$4,703  $(8,049) $11,163  $(7,339) 
Alternative Credential Segment(6,790) (6,926) (17,554) (10,842) 
Total segment profitability$(2,087) $(14,975) $(6,391) $(18,181) 
Segment profitability margin***  
Graduate Program Segment4.1 %(7.9)%4.8 %(3.6)%
Alternative Credential Segment(10.1) (20.3) (14.2) (20.8) 
Total segment profitability margin(1.1)%(11.1)%(1.8)%(7.0)%
*The Company has excluded immaterial amounts of intersegment revenues from the three- and six-month periods ended June 30, 2020 and 2019.
** The Company defines segment profitability as net income or net loss, as applicable, before net interest income (expense), taxes, depreciation and amortization expense, foreign currency gains or losses, deferred revenue fair value adjustments, transaction costs, integration costs, restructuring-related costs, stockholder activism costs, impairment charges, losses on debt extinguishment, and stock-based compensation expense. Some or all of these items may not be applicable in any given reporting period.
*** The Company defines segment profitability margin as segment profitability as a percentage of the respective segment’s revenue.
        The following table presents a reconciliation of the Company’s net loss to total segment profitability for each of the periods indicated.
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2020201920202019
 (in thousands)
Net loss$(66,167) $(27,972) $(126,273) $(49,526) 
Adjustments:
Net interest expense (income)6,364  610  11,344  (1,684) 
Foreign currency (gain) loss(570) 13  1,701  383  
Income tax benefit(363) (18,691) (1,418) (19,632) 
Depreciation and amortization expense23,985  14,653  47,470  24,351  
Deferred revenue fair value adjustment—  3,352  —  3,352  
Transaction and integration costs359  3,093  1,083  5,024  
Restructuring-related costs196  —  484  —  
Stockholder activism costs1,347  —  5,586  —  
Stock-based compensation expense21,091  9,967  41,961  19,551  
Loss on debt extinguishment11,671  —  11,671  —  
Total adjustments64,080  12,997  119,882  31,345  
Total segment profitability$(2,087) $(14,975) $(6,391) $(18,181) 

        The following table presents the Company’s total assets by segment as of each of the dates indicated.
 June 30,
2020		December 31,
2019
 (in thousands)
Total assets  
Graduate Program Segment$560,137  $507,187  
Alternative Credential Segment672,423  679,643  
Total assets$1,232,560  $1,186,830  
Trade Accounts Receivable and Contract Liabilities

        The following table presents the Company’s trade accounts receivable and contract liabilities in each segment as of each of the dates indicated.
 June 30,
2020		December 31,
2019
 (in thousands)
Trade accounts receivable  
Graduate Program Segment accounts receivable
$17,185  $3,454  
Graduate Program Segment unbilled revenue27,777  12,123  
Alternative Credential Segment accounts receivable
29,158  19,408  
Provision for credit losses(2,540) (1,330) 
Total trade accounts receivable$71,580  $33,655  
Contract liabilities  
Graduate Program Segment deferred revenue$15,112  $2,210  
Alternative Credential Segment deferred revenue61,959  46,623  
Total contract liabilities$77,071  $48,833  

        For the Graduate Program Segment, no revenue recognized during each of the three months ended June 30, 2020 and 2019 was included in the deferred revenue balance at the beginning of each respective year. Revenue recognized in this segment during the six months ended June 30, 2020 and 2019 that was included in the deferred revenue balance at the beginning of each year was $2.2 million and $2.4 million, respectively.

For the Alternative Credential Segment, revenue recognized during the three months ended June 30, 2020 and 2019 that was included in the deferred revenue balance at the beginning of each year was $12.2 million and zero, respectively. Revenue recognized in this segment during the six months ended June 30, 2020 and 2019 that was included in the deferred revenue balance at the beginning of each year was $46.6 million and $5.4 million, respectively.

Contract Acquisition Costs

        The Graduate Program Segment had $0.5 million and $0.5 million of net capitalized contract acquisition costs recorded primarily within university payments and other assets, non-current on the condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively.

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 $17.2 million and $11.1 million for the three months ended June 30, 2020 and 2019, respectively. The Company’s non-U.S. revenue was $30.0 million and $18.9 million for the six months ended June 30, 2020 and 2019, respectively. Substantially all of the Company’s non-U.S. revenue for each of the aforementioned periods 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 June 30, 2020 and December 31, 2019 totaled $1.8 million and $2.7 million, respectively.