v3.24.2.u1

Segment and Geographic Information | 6 Months Ended
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Jun. 30, 2024
Segment Reporting [Abstract] |
Segment and Geographic Information | Segment and Geographic Information The Company has two reportable segments: the Degree 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 Degree 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 executive education programs and technical skills-based boot camps provided through relationships with nonprofit colleges, universities, and other leading organizations. Significant Customers For each of the three and six months ended June 30, 2024 and 2023, no university client accounted for 10% or more of the Company’s consolidated revenue. As of June 30, 2024, no university client accounted for 10% or more of the Company’s consolidated accounts receivable, net balance. As of December 31, 2023, two university clients in the Degree Program Segment accounted for 10% or more of the Company’s consolidated accounts receivable, net balance, as follows: $36.4 million and $14.3 million, which equaled 31% and 12% of the Company’s consolidated accounts receivable, net balance, respectively. 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,
| 2024 |  | 2023 |  | 2024 |  | 2023
| (dollars in thousands)
Revenue by segment* |  |  |  |  |  |  |
Degree Program Segment | $ | 101,978 |  |  | $ | 119,494 |  |  | $ | 213,524 |  |  | $ | 259,974 |
Alternative Credential Segment | 78,705 |  |  | 102,595 |  |  | 165,536 |  |  | 200,619 |
Total revenue | $ | 180,683 |  |  | $ | 222,089 |  |  | $ | 379,060 |  |  | $ | 460,593 |
Segment profitability** |  |  |  |  |  |  |
Degree Program Segment | $ | 28,655 |  |  | $ | 33,111 |  |  | $ | 60,640 |  |  | $ | 80,315 |
Alternative Credential Segment | (9,260) |  |  | (11,319) |  |  | (23,950) |  |  | (28,332) |
Total segment profitability | $ | 19,395 |  |  | $ | 21,792 |  |  | $ | 36,690 |  |  | $ | 51,983 |
Segment profitability margin*** |  |  |  |  |  |  |
Degree Program Segment | 28.1 | % |  | 27.7 | % |  | 28.4 | % |  | 30.9 | %
Alternative Credential Segment | (11.8) |  |  | (11.0) |  |  | (14.5) |  |  | (14.1) |
Total segment profitability margin | 10.7 | % |  | 9.8 | % |  | 9.7 | % |  | 11.3 | %
* |  | The Company has excluded immaterial amounts of intersegment revenues from each of the three and six months ended June 30, 2024 and 2023.
** |  | The Company defines segment profitability as net income or net loss, as applicable, before net interest income (expense), other income (expense), net, taxes, depreciation and amortization expense, transaction costs, integration costs, professional fees associated with the Chapter 11 Cases, performance improvement initiative implementation expense, restructuring-related costs, stockholder activism costs, certain litigation-related costs, consisting of fees for certain non-ordinary course litigation and other proceedings, impairment charges, debt modification expense and 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 total segment profitability to net loss for each of the periods indicated.
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
| (in thousands)
Net loss | $ | (452,440) |  |  | $ | (173,654) |  |  | $ | (507,089) |  |  | $ | (227,716) |
Adjustments: |  |  |  |  |  |  |
Stock-based compensation expense | 4,511 |  |  | 10,983 |  |  | 9,835 |  |  | 25,546 |
Other expense (income), net | 1,428 |  |  | (227) |  |  | 9,832 |  |  | (834) |
Net interest expense | 19,012 |  |  | 17,545 |  |  | 37,702 |  |  | 35,137 |
Income tax (benefit) expense | (40) |  |  | 210 |  |  | 193 |  |  | 323 |
Depreciation and amortization expense | 24,886 |  |  | 27,328 |  |  | 49,572 |  |  | 57,348 |
Impairment charges | 396,149 |  |  | 134,117 |  |  | 396,149 |  |  | 134,117 |
Debt modification expense and loss on debt extinguishment | — |  |  | — |  |  | — |  |  | 16,735 |
Restructuring charges | 8,406 |  |  | 3,622 |  |  | 13,133 |  |  | 8,497 |
Other* | 17,483 |  |  | 1,868 |  |  | 27,363 |  |  | 2,830 |
Total adjustments | 471,835 |  |  | 195,446 |  |  | 543,779 |  |  | 279,699 |
Total segment profitability | $ | 19,395 |  |  | $ | 21,792 |  |  | $ | 36,690 |  |  | $ | 51,983 |
* |  | Includes (i) transaction and integration costs of $0.0 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, and $0.3 million and $0.2 million for the six months ended June 30, 2024 and 2023, respectively, (ii) litigation-related costs of $1.6 million and $1.8 million for the three months ended June 30, 2024 and 2023, respectively, and $4.2 million and $2.6 million for the six months ended June 30, 2024 and 2023, respectively, and (iii) professional fees associated with the Chapter 11 Cases and performance improvement initiative implementation expense of $15.9 million and $0.0 million for the three months ended June 30, 2024 and 2023, respectively, and $22.9 million and $0.0 million for the six months ended June 30, 2024 and 2023, respectively.
The following table presents the Company’s total assets by segment as of each of the dates indicated.
| June 30, 2024 |  | December 31, 2023
| (in thousands)
Total assets |  |  |
Degree Program Segment | $ | 283,664 |  |  | $ | 377,395 |
Alternative Credential Segment | 640,650 |  |  | 1,082,288 |
Total assets | $ | 924,314 |  |  | $ | 1,459,683 |
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 $25.1 million and $28.8 million for the three months ended June 30, 2024 and 2023, respectively, and $53.5 million and $59.5 million for the six months ended June 30, 2024 and 2023, 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, 2024 and December 31, 2023 totaled approximately $3.1 million and $3.5 million, respectively.

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- Definition The entire disclosure for reporting segments including data and tables. 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