Landover, Md.-based edtech software firm 2U (TWOU) beat Wall Street analyst expectations for the eighth quarter in a row this week, according to their fourth quarter earnings report. The company reported revenue of $43.3 million and an adjusted loss of less than one cent per share, compared to the projected $42 million revenue and loss of three cents per share. As of this writing, the stock price was up 15.5 percent to $21.83. The news the company was most excited about was that adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) income was $1.9 million, the first time 2U has ever posted a profitable quarter.
“We expect long-term to be profitable, to get that stability and we reached that big milestone [of a profitable quarter],” 2U CEO and co-founder Chip Paucek told DC Inno in an interview. “That’s just the general progression of business. It’s less about any particular quarter and more about long-term growth.”
The growth of the company in the numbers has been reflected in plenty of the company’s other plans as well. 2U is planning another half dozen new programs to roll out in 2016 at several schools. And 2U recently announced plans to move its headquarters to a much larger spacein Maryland, which will be useful as it has more than 40 open positions for its headquarters to fill.
“Maryland is our headquarters and our largest office, but it’s the least nice,” Paucek said. “It’s exciting to get our Maryland employees into an incredible location and bring more of the people that make 2U go every day.”
“We are committed to the D.C. market and are aggressively adding new programs to GW, American, and so on,” Paucek said, adding that basing 2U here has been useful for recruiting as well. “Scaling to this scale would have have been impossible without the appeal of the D.C. area.”
The recent hiring, and promotion to president, of former U.S. deputy secretary of education Jim Shelton also fits into the growth plans for 2U, Paucek explained.
“I think people understand the sense of hiring Jim now that they know we saw the opening coming,” Paucek said.
Paucek spoke optimistically about the short-term growth of 2U, but made a point of emphasizing that he is focused on more than just the next quarter or next milestone. Instead, the good news about a profitable metric is just a start.
“It’s just like how our IPO a couple of years ago was just a sort of step on the road,” Paucek said. “That’s how I think of this. Another step on the road.”