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Receivables and Contract Liabilities | 6 Months Ended
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Jun. 30, 2024
Receivables And Contract Liabilities Disclosure [Abstract] |
Receivables and Contract Liabilities | Receivables and Contract Liabilities Trade Accounts Receivable The Company’s trade accounts receivable balances relate to amounts due from students or customers occurring in the normal course of business. Trade accounts receivable balances have a term of less than one year and are included in accounts receivable, net on the Company’s condensed consolidated balance sheets. The following table presents the Company’s trade accounts receivable in each segment as of each of the dates indicated.
| June 30, 2024 |  | December 31, 2023
| (in thousands)
Degree Program Segment accounts receivable | $ | 16,912 |  |  | $ | 3,207 |
Degree Program Segment unbilled revenue | 26,372 |  |  | 72,525 |
Alternative Credential Segment accounts receivable | 34,092 |  |  | 47,455 |
Total | 77,376 |  |  | 123,187 |
Less: Provision for credit losses | (6,038) |  |  | (7,243) |
Trade accounts receivable, net | $ | 71,338 |  |  | $ | 115,944 |
The Company regularly reviews its portfolio of offerings for alignment with its business objectives, including cost to operate, expected enrollments, and other factors, and from time to time, the Company has entered into, and may in the future enter into, agreements to strategically exit certain programs. As of June 30, 2024 and December 31, 2023, the Company had balances of $9.9 million and $68.2 million, respectively, of unbilled revenue associated with portfolio management activities within accounts receivable, net on the condensed consolidated balance sheets. In addition, as of June 30, 2024 and December 31, 2023, the Company had balances of $0.5 million and $16.9 million, respectively, of non-current accounts receivable associated with portfolio management activities within other assets, non-current on the condensed consolidated balance sheets. These non-current accounts receivable are typically due within 12 to 24 months. In January 2024, the Company entered into a receivables factoring transaction whereby a counterparty committed to purchase certain receivables owing to the company related to portfolio management activities at a purchase rate of 88% (the “Factoring Agreement”). Under the Factoring Agreement, the Company could sell eligible receivables without recourse in exchange for cash. In accordance with ASC 860 Transfers and Servicing of Financial Assets, the sold receivables were derecognized from the Company’s balance sheet. The fair value of the sold receivables approximated their book value due to their short-term nature. Proceeds from the sale of receivables are reflected as cash flows from operating activities on the condensed consolidated statement of cash flows. In the first quarter of 2024, the Company sold, without recourse, $82.1 million of receivables under the Factoring Agreement, with net proceeds of $74.0 million. The loss on the sale of these receivables of $8.1 million is included within other income (expense), net on the Company’s condensed consolidated statements of operations. The following table presents the change in provision for credit losses for trade accounts receivable on the Company’s condensed consolidated balance sheets for the period indicated.
| Provision for Credit Losses
| (in thousands)
Balance as of December 31, 2023 | $ | 7,243 |
Current period provision | 1,450 |
Amounts written off | (2,651) |
Foreign currency translation adjustments | (4) |
Balance as of June 30, 2024 | $ | 6,038 |
Other Receivables The Company’s other receivables are comprised of amounts due under tuition payment plans with extended payment terms from students enrolled in certain of the Company’s alternative credential offerings. These payment plans, which are managed and serviced by third-party providers, are designed to assist students with paying tuition costs after all other student financial assistance and scholarships have been applied. The associated receivables generally have payment terms that range from 12 to 42 months and are recorded net of any implied pricing concessions, which are determined based on collections history, market data and any time value of money component. There are no fees or origination costs included in these receivables. The carrying value of these receivable balances approximate their fair value. The following table presents the components of the Company’s other receivables, net, as of each of the dates indicated.
| June 30, 2024 |  | December 31, 2023
| (in thousands)
Other receivables, amortized cost | $ | 48,642 |  |  | $ | 49,358 |
Less: Provision for credit losses | (9,476) |  |  | (8,558) |
Other receivables, net | $ | 39,166 |  |  | $ | 40,800 |
Other receivables, net, current | $ | 23,819 |  |  | $ | 28,293 |
Other receivables, net, non-current | $ | 15,347 |  |  | $ | 12,507 |
The following table presents the change in provision for credit losses for other receivables on the Company’s condensed consolidated balance sheets for the period indicated.
| Provision for Credit Losses
| (in thousands)
Balance as of December 31, 2023 | $ | 8,558 |
Current period provision | 918 |
Balance as of June 30, 2024 | $ | 9,476 |
The Company considers receivables to be past due when amounts contractually due under the extended payment plans have not been paid. As of June 30, 2024, 68% of other receivables, net due under extended payment plans were current. At the time of origination, the Company categorizes its other receivables using a credit quality indicator based on the credit tier rankings obtained from the third-party providers that manage and service the payment plans. The third-party providers utilize credit rating agency data to determine the credit tier rankings. The Company monitors the collectability of its other receivables on an ongoing basis. The adequacy of the allowance for credit losses is determined through analysis of multiple factors, including industry trends, portfolio performance, and delinquency rates. The following tables present other receivables, at amortized cost including interest accretion, by credit quality indicator and year of origination, as of the dates indicated.
| June 30, 2024
| Year of Origination
| 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 & Prior |  | Total
| (in thousands)
Credit Quality Tier |  |  |  |  |  |  |  |  |  |  |
High | $ | 5,216 |  |  | $ | 5,966 |  |  | $ | 1,147 |  |  | $ | 366 |  |  | $ | 1,023 |  |  | $ | 13,718 |
Mid | 6,392 |  |  | 7,237 |  |  | 2,853 |  |  | 1,609 |  |  | 2,538 |  |  | 20,629 |
Low | 4,327 |  |  | 4,224 |  |  | 2,037 |  |  | 1,574 |  |  | 2,133 |  |  | 14,295 |
Total | $ | 15,935 |  |  | $ | 17,427 |  |  | $ | 6,037 |  |  | $ | 3,549 |  |  | $ | 5,694 |  |  | $ | 48,642 |
| December 31, 2023
| Year of Origination
| 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 & Prior |  | Total
| (in thousands)
Credit Quality Tier |  |  |  |  |  |  |  |  |  |  |
High | $ | 12,744 |  |  | $ | 1,229 |  |  | $ | 404 |  |  | $ | 311 |  |  | $ | 205 |  |  | $ | 14,893 |
Mid | 13,178 |  |  | 3,067 |  |  | 2,614 |  |  | 735 |  |  | 674 |  |  | 20,268 |
Low | 7,658 |  |  | 2,464 |  |  | 2,684 |  |  | 734 |  |  | 657 |  |  | 14,197 |
Total | $ | 33,580 |  |  | $ | 6,760 |  |  | $ | 5,702 |  |  | $ | 1,780 |  |  | $ | 1,536 |  |  | $ | 49,358 |
Contract Liabilities The Company’s deferred revenue represents contract liabilities. The Company generally receives payments from Degree Program Segment university clients early in each academic term and from Alternative Credential Segment students, either in full upon registration for the course or in full before the end of the course based on a payment plan, prior to completion of the service period. These payments are recorded as deferred revenue until the services are delivered or until the Company’s obligations are otherwise met, at which time revenue is recognized. The following table presents the Company’s contract liabilities in each segment as of each of the dates indicated.
| June 30, 2024 |  | December 31, 2023
| (in thousands)
Degree Program Segment deferred revenue | $ | 14,482 |  |  | $ | 1,735 |
Alternative Credential Segment deferred revenue | 69,299 |  |  | 80,214 |
Total contract liabilities | $ | 83,781 |  |  | $ | 81,949 |
For the Degree Program Segment, during each of the three months ended June 30, 2024 and 2023 revenue related to deferred revenue balances that existed at the end of each preceding year was insignificant. During the six months ended June 30, 2024 and 2023 the Company recognized $1.7 million and $1.2 million, respectively, of revenue related to deferred revenue balances that existed at the end of each preceding year. For the Alternative Credential Segment, during the three months ended June 30, 2024 and 2023 the Company recognized $4.6 million and $16.1 million, respectively, of revenue related to deferred revenue balances that existed at the end of each preceding year. During the six months ended June 30, 2024 and 2023 the Company recognized $59.5 million and $71.0 million, respectively, of revenue related to deferred revenue balances that existed at the end of each preceding year. Contract Acquisition Costs The Degree Program Segment had $1.0 million and $1.0 million of net capitalized contract acquisition costs recorded primarily within other assets, non-current on the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023, respectively. For each of the six months ended June 30, 2024 and 2023, the Company capitalized an immaterial amount of contract acquisition costs and recorded an immaterial amount of associated amortization expense in the Degree Program Segment.

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