Welcome to the 2U 2021 earnings report call. I would now like to hand the conference over to your speaker today, Mr. Ken Goff, SVP of Investor Relations. Thank you. Please go ahead, sir. Thank you, operator. Good afternoon, everyone, and welcome to 2U's Q1 2021 earnings conference call. I'm Ken Goff, SVP of Investor Relations at 2U, and I'm joined by Chip Paucek, our Co-Founder and CEO, and Paul Lalljie, our CFO. Following Chip and Paul's prepared remarks, we will take questions. Our investor relations website, investor.2u.com, has our earnings press release in slide presentation, as well as a simultaneous webcast of this call. A webcast replay of this call will be made available for the next 90 days. Statements made on this call include forward-looking statements regarding our financial and operating results, the continued impact of the COVID-19 pandemic, new educational offerings, student and university demand, and other matters. These statements are subject to risks, uncertainties and assumptions. Any forward-looking statements made on this call reflect our analysis as of today, and we have no plans or duty to update them. Please refer to the earnings press release and the risk factors described in the documents we file with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31st, 2020, and our most recent quarterly report on Form 10-Q for information on risks, uncertainties and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of 2U's performance. These non-GAAP measures should be considered in addition to, and not as a substitute for or in isolation from GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results in our earnings press release and on the investor relations page of our website. With that, let me hand it over to Chip. Thanks, Ken. Higher education is one of the world's largest industries. Like so many others before it's now undergoing a profound digital transformation. In the midst of this, more and more of the world's best universities are turning to 2U as their trusted long-term partner. Across our entire product portfolio, from undergrad and grad degrees to boot camps and short courses, the demand for 2U's shared success business model is strong. We expect that to continue. Our partners know that we deliver unmatched scale and quality, which drives positive outcomes for their students and real value and revenue for them. To date, we've generated more than $2 billion in tuition for our partners. The results? A business firing on all cylinders that based on our guidance, will be fast approaching $1 billion in annual revenue by year-end. 2U's strength is clearly reflected in our Q1 numbers, which were fantastic. Growth of 32% on a revenue base that is much larger than our competitive set with accelerating profitability. Notably in Q1, we turned free cash flow positive on a trailing 12-month basis, and we now expect that to be the case for 2021, which would be a year ahead of our original target and mark an important milestone for 2U. Our CFO, Paul Lalljie, will give more details on the quarter and what to expect for the year. I want to focus on how we believe our scale and quality drives 2U's strategic positioning and differentiates us as the clear market leader. Let's start with our scale. Today, we power the industry's most comprehensive mix of 540-plus degree and non-degree offerings from 80 of the world's best nonprofit universities. Our short course portfolio is growing rapidly; we're expanding our network of partners. Over the past quarter, we extended our partnership with MIT and signed two of the world's best-ranked business schools, IMD in Switzerland and the Rotman School at the University of Toronto. Shifting to the degree business, we now offer 184 programs across 26 disciplines, including those in healthcare, where we offer differentiated value to partners and students through our unique expertise and growing nationwide network of contracted clinical placement sites. Here are just a few numbers to give you a sense of our scale and impact in healthcare disciplines. We're powering 95 different healthcare-related degrees at 19 colleges and universities. Collectively, these programs have produced 18,000 graduate's inception to date. Another 14,000 students are currently enrolled. Our clinical placement network now includes 73,000 contracted sites across all 50 states, and we've secured a total of more than 67,000 placements, which translates into over 19 million hours of field work by students. It's no wonder other OPMs, including MOOC players in the degree market, often avoid these complicated licensure-based disciplines. I'd like to highlight a major licensure deal for us this quarter with a long-term partner. The Family Institute at Northwestern University, an early 2U partner, recently agreed to a long-term extension through 2034 of our Counseling@Northwestern degree, and also agreed to team up again with 2U to launch a new master's degree in marriage and family therapy. This is an excellent business for both parties, and one that is solving a critical counseling need for society. Northwestern also shows the impact of our business working across a great university and the career curriculum continuum. We now have seven schools at Northwestern working with 2U in degrees, short courses, and boot camps. This would not have been possible without the expansion of our business model and product line over the years. Speaking of expansion, undergrad is a rapidly growing part of our business, and we continue to gain share. Note that this is the largest part of the higher education alone, there are currently 16.6 million active undergraduate students, and 36 million learners who have some college credit but didn't graduate. Our first undergraduate degrees at LSE have generated excellent across more than 150 countries since January of 2020. The number of degrees we're offering grew from one to nine in less than a year. Our new undergrad degree completion offering with Morehouse College, one of the nation's top HBCUs, who we announced in February, has had one of the highest levels of initial interest that we've really ever seen as a company, attracting thousands of prospective students within the first few days after announcement and before any paid marketing. Expect more entries from us in this market. Let's turn our attention to boot camps, another part of the business where we believe our scale and quality are delivering unique value to the market. Historically, four-year nonprofit colleges and universities have not been major skills-based training providers. Today, that's changed because of our 40-plus partners spanning 27 states and the District of Columbia, are reskilling and upskilling tens of thousands of Americans each year. This year alone, we expect to make nearly 30,000 free job referrals for graduates of 2U-powered boot camps. At a moment when the skills gap has become a major bipartisan focus for the Congress and Biden administration, we think our scale and the quality of our boot camps represents a differentiated and competitive strength for 2U. The recent expansion of 2U's Career Engagement Network will only further reinforce this competitive strength and differentiation. By leveraging the career support and job placement capabilities that are central to our boot camps, and tapping into our growing network of 250-plus employer partners, including companies like State Farm, Deloitte, and Google, 2U is able to offer unlimited access to industry-specific, career-relevant resources, including toolkits, webinars, job listings, and career fairs, all at no cost to the 325,000 current students and alums of 2U-powered degree and non-degree programs. The growing scale and network effects of our Career Engagement Network are real. More students and graduates drive more employer partners. More employer partners drive better career resources and job opportunities. Better career resources and job opportunities drive greater value to students. It's a virtuous ecosystem, and we believe our scale and expertise enables us to connect the dots between higher ed and employers in ways no one else has really been able to figure out. We do believe this adds to our competitive moat and will be difficult for others to replicate. Speaking of career success, I want to end on what matters most of all, student outcomes. The only way to truly win in the education market and build a sustainable business is to deliver quality outcomes for students. It's something 2U's been doing from day one, which is why our already strong graduation and retention rates have continued to improve over the years. You can see those numbers in our transparency report. A new compelling proof point of the quality in our degree programs comes from our research with Gallup. Last week, we released our second year of student outcomes focused Gallup research. By any measure, it shows that 2U is leading the way not only in delivering quality, but equitable education experiences and outcomes. Let me share a few key findings from the report. 97% of alumni from 2U-Powered online graduate degree programs are having positive career outcomes. 97%. That number is 94% for Black alumni and 97% for first-generation alumni. Although career fulfillment, not increased pay, was by far the primary motivation for students returning to graduate school, 53% of alumni still reported a salary increase after graduation, and 20% reported significant increases. To the extent that anyone still believes that online education is inferior, together with our partners, we've proved them wrong. More importantly, along the way, we're also demonstrating that great online education can deliver truly equitable education experiences and positive career outcomes. We're delivering on the original promise of this company's mission of eliminating the background in higher education, and we built a hell of a business while doing it. Now I'd like to turn it over to our fine CFO, Paul Lalljie, to take you through our results, and I'll return for Q&A. Thanks, Chip. Good afternoon, everyone. We had an outstanding quarter with results that exceeded expectations. Revenue grew 32% to $232.5 million over the Q1 of 2020. We saw strong growth across the portfolio. The Degree Program Segment grew 23%, boot camp 58%, and short course 41%, all on a year-over-year basis. Expense for the quarter totaled $269.6 million, an increase of 18%, significantly lower than the 32% revenue growth. This resulted in a $14.5 million improvement in net loss from the Q1 of last year. Adjusted EBITDA for the quarter totaled $13.7 million, a margin of 6%, while free cash flow on a trailing 12-month basis came in at a positive $9 million. In a nutshell, we reported accelerating revenue growth better than expected EBITDA margins and positive unlevered free cash flow on a trailing 12-month basis. A very strong start to the year. Now let's take a closer look at revenue for the quarter. Revenue growth this quarter was driven by a 33% increase in full course equivalent enrollments, which came in at 81,000 for the quarter, showing strength across products, launch cohorts, and the verticals. Revenue in the Alternative Credential Segment grew 52% on a year-over-year basis, driven by 39% increase in FCEs and a 9% increase in revenue per FCE. Revenue growth in Boot Camp was particularly strong for the quarter, driving the increase in revenue per FCE. In the Degree Program Segment, revenue grew 23% compared to last year, the fifth straight quarter of accelerating revenue growth. FCEs for the quarter increased 31%, while revenue per FCE decreased 6% year-over-year. The outperformance was driven both by strength in the number of new enrollments and increased student retention rate. Turning to costs and expenses. Total operating expense for the quarter totaled $296.6 million, an increase of 18% over last year. Marketing and sales expense increased 14% year-over-year. Keep in mind, revenue grew 32% as we continue to drive efficiencies and leverage our scale. That led to an eight-point improvement in marketing and sales as a percent of total revenue compared to last year. Net loss for the quarter was $45.6 million, a $14.5 million improvement compared to the year ago quarter. Adjusted EBITDA totaled $13.7 million for the quarter, an $18.1 million improvement compared to last year and a 6% margin. Moving on to segment margins. In the Alternative Credential Segment, margins improved five points compared to last year, benefiting from scale and integration initiatives driving operational efficiencies. Margins in the Degree segment came in at 18% for the quarter, driven by higher revenue growth. Headcount at the end of the quarter totaled 3,734, compared to 3,738 from the year ago quarter. Turning to the balance sheet. Our accounts receivable balance totaled $74.7 million, up $28.1 million from the end of the previous quarter. This increase in accounts receivable was driven by the timing of collections from our university partners. In fact, a focus on working capital has kept our accounts receivable balance flat with the Q1 of last year, despite strong revenue growth. Deferred revenue came in at $108.4 million, up $32.9 million from the Q4 of 2020, primarily driven by seasonality in the Degree Segment. This quarter, we generated $7.6 million in operating cash flow, spent $15.1 million in capital expenditures, and ended the quarter with a cash balance of $505.1 million. I'm proud to report that we delivered positive unlevered free cash flow of $9 million on a trailing 12-month basis. This was primarily driven by positive cash flow from operations and a reduction in capital expenditures. We ended the quarter with $280 million in long-term debt related to the convertible notes we issued in April of last year. I'll now turn to guidance and some context for how we're thinking about the coming quarters. Our Q1 results provide the foundation for a strong year. We continue to have good visibility in the longer cycle Degree Program Segment, which continues to increase steadily. The Alternative Credential Segment has maintained strong growth. Career-relevant upskilling and reskilling opportunities are in focus as a means of addressing the current skill gap in the economy, presenting us with a growing market opportunity. We set aggressive targets for Adjusted EBITDA, and we've been exceeding those targets, giving us the flexibility to increase investments where appropriate to drive future growth. We now expect revenue for 2021 to range from $925 -$955 million, growth of 21% at the midpoint. Adjusted EBITDA is expected to range from $55 -$65 million, a margin of 6% at the midpoints of Adjusted EBITDA and revenue. We continue to expect capital expenditures to be approximately $85 million and weighted average shares outstanding to be approximately 76 million shares. To conclude, let me emphasize that we reported a very strong quarter, and we are well positioned for the rest of 2021. We expect the degree business to continue its strong performance and the Alternative Credential Segment to continue to grow faster than the market, all while expanding margins and generating cash flows. With that, let's move to the question-and-answer session. Operator? At this time if you would like to ask a question, you will need to press one on your telephone keypad. Again, star one. We'll pause for just a moment. Your first question is from Brett Knoblauch of Berenberg Capital Markets. Hi, guys. Thanks for taking my question and congrats on the quarter. Just curious about your thoughts. I look at your website, and it's changed a bit over the last year or so, and it's starting to resemble a bit of a marketplace type feel. Is that something that you would consider entering into in terms of acquiring or building your own marketplace and leverage a different type of student acquisition funnel? We do think continuing to elevate the 2U brand through Powered by 2U is an important part of the strategy. I would say that our marketing apparatus today is world-class and at a scale that I think most don't quite realize. We will continue to explore all facets of driving high-quality student enrollment for our university partners. You might have noticed an announcement this week from Fortune magazine. The team at Fortune launched an education vertical, and we are a key advertising partner for that vertical. Excited about one example, Brett, of a new advertising source for us to reach the right student for our university partners and do it at a scale that we think is industry leading. We will continue to explore more and more opportunities. We will continue to elevate the Powered by 2U brand and seek out opportunities to find students where they need to be found. Understood. Maybe just one follow-up. During the quarter, you guys launched a partnership that I thought was really important with Guild. Could you expand upon maybe the financials of that partnership? When that's going to take place, how that's going to work, given they have a good corporate install base of three million-plus employees? I guess I would back up by first letting you know that enterprise has definitely been a part of our growth in a way that I think isn't obvious to the community. We built a large-scale consumer operation that, as I said at the beginning of the call, we're sniffing distance from $1 billion in revenue now. That has been built historically on what I think is a differentiated marketing funnel that most of higher ed isn't spending dollars this particular way. We launched into enterprise a couple of years ago, and it is one of the fastest-growing parts of the business today. Guild and the opportunity to partner with Rachel Romer Carlson and her great company to power degree programs into the enterprise, we do think is an excellent growth opportunity. We found that both short courses and boot camps to date have been very much in demand from employers. The Career Engagement Network is part of the key to the story in terms of our industry leading scale can create. Sorry, I'm getting a ton of feedback on the call. Can you hear me, Brett? Yes, I can. Okay. We're having some challenges in the audio line, so I just want to make sure you can hear me. The Career Engagement Network, we think, is strategically very relevant. One part that we didn't mention in the prepared remarks is it does build employer relationships from the standpoint of creating opportunities for our products to be available to their employees. Guild is part of that. Selling our short courses and our boot camps in is part of that. You might have seen an announcement with us with Netflix and Norfolk State University, where we're powering technical boot camps to increase diversity in Netflix's workforce. We think there's great applicability there. We do very much like the growth opportunities that we see in enterprise, and all of our employer partners are now recruiting talent out of our boot camps, but out of our degree business and our short course business. You're talking about 325,000 alums. A great opportunity for us to drive sort of all ends of that ecosystem. Perfect. Thanks so much. Really appreciate it. Your next question is from Josh Baer from Morgan Stanley. Thanks for the question, and congrats on strong results this quarter. I was hoping you could help frame the potential ranges for FCE enrollment growth across the different business lines, maybe by providing any context for the number of degree programs and short courses and boot camps that are either currently ramping or expected to be launched by the end of the year or expected to be launched next year. Any context would be helpful. Josh, this is Paul here. I'll kick it off, and Chip will chime in later on. One of the things that we've consistently said is that we manage the business on a portfolio basis. In Chip's comments, he mentioned at the end of the year, we're going to be just shy of $1 billion of revenue. One of the benefits of managing the business on a portfolio basis is that we can truly benefit from scale. I think you've seen the progression on the EBITDA side, the profit side of the equation, on the free cash flow side of the equation. That is not because we're benefiting from market trends. That is not because we're reducing expenses in a given quarter or cutting expenses, or that is not because of one-time activities in nature. That is because we have a Chief Operating Officer, Mark Chernis, and his team that are maniacally focused on improving the way we do business. How can we build course cheaper, better, faster? How can we service and delight students in a way that is efficient, in a way that is truly student friendly or customer friendly? If we can implement some of those types of measures, what we have is an efficient, scalable operation. Why do I mention it that way? If we're allocating capital across the business where we'll get the highest rate of return, it therefore means that we're agnostic to the number of degree programs that we launch or the number of new courses in the short course business that we build, or the number of offerings in the bootcamp business that we launch. I think we also mentioned this in one of the prior calls. We have short courses and bootcamps that are larger than some of our degree programs. To some extent, it is less about the cadence for us and more about how we can holistically grow our top line, grow it profitably, and have EBITDA and cash flows at the end of the day. To some extent, we somewhat look at it from a very different perspective. In terms of FCEs and revenue per FCE continue to be a good indicator of the business. However, for example, in the degree business, with the launching of the Simmons program in fall of last year and with LSE, what we have is more enrollment but lower revenue per FCE, just because those programs are lower cost programs. To some extent, the revenue per FCE as the mix shifts becomes less relevant for us as we go forward. The bottom line is, look, we delivered some really good numbers this quarter. We feel good about the year. We feel good about the accelerating, meaning the sequential increase in our top line and our bottom line as we go through time. The thing that we're probably the proudest of is the free cash flow, right? We were expecting that towards the back half of the year. More importantly, around Q3, Q4. We were able to have that sooner. Current course and speed, I think we'll be able to maintain that as we go through the year. That's the kind of progression that we want investors and the street community to look at as a yardstick and measurement of our success, because that's how we measure our success. Chip, I don't know if you'll add to that. The only thing I would add is, Josh, at this stage, we've got short course and bootcamp relationships that are larger than some of our historic degree programs. You really do have to look at it holistically. Launch cadence is a bit of a term from our early years as a company. It's not as relevant today, even though on the degree side, we're continuing to launch all kinds of new degrees. The one that I just talked about, the marriage and family program, the degree program with Northwestern University. We're now working with seven different schools there across all three product categories. Take what we announced yesterday with Keypath and Pepperdine. That's our 11th program with Pepperdine. I think that an example of something that really isn't fully appreciated is just how successful we've been in expanding with our university partners. It's not just about adding another degree today. It's all of these announcements together is how you get a company that you obviously have to do a lot to raise the guidance on a company that's getting close to $1 billion in revenue, right? By definition, the numbers are large today. It takes all of this. It takes our degree cadence. It takes our short course opportunities. It takes new logos like IMD. It takes opportunities in enterprise like Netflix. It takes a Guild partnership. All of these things together create. Right now, we're feeling pretty good about where the company is going. We feel like this company is the strongest it's been since our IPO in 2014. Josh, before we close this out, I think we mentioned this earlier, our marketing apparatus is best in class, and that's what allows us to benefit from scale across each of our businesses. I think there is something to be said for such a marketing apparatus. If we keep growing faster in the market, then our position is secured. Got it. If I could just follow up. I understand the managing on a portfolio basis. It sounds like if you're too focused on degrees versus alternative credentials, we as analysts might be lost because one could be bigger than the other. There might be better return somewhere else, and there shouldn't be this huge focus on the exact number of launches between each of them. I guess, thinking about company growth, biggest drivers, enrollment growth, the biggest driver of that is, I think new launches, whether it comes from one or the other. I guess, is there anything else that investors should look to try to support the trajectory of growth going forward? Or is it that last comment around expectations to grow ahead of the market, and that's a good framework for thinking about the growth trajectory outside of 2021? Well, there's no doubt that we. Sorry, Paul, go ahead. No, please go. Sorry. My apologies. Well, strategically, many years ago now, we decided we needed to meet the learner where the learner needed to be met, and we needed to broaden our horizons to go from degree to shorter courses and create opportunities for somebody to learn across their lifetime. To tie this to the first question that was asked, there is somewhere in the ballpark of 15 million people that have come into our system in some particular way, and we are getting much better operating across this ecosystem and offering those folks opportunities to learn where they need to learn. So, Josh, it is certainly not just about the degree business. The Alt Cred segment for 2U alone is larger than most of our competitors, and candidly, growing faster. That is without the degree business. We happen to believe strongly in both. You saw an acceleration in the degree business. We expect that to continue. 52% in the Alt Cred segment on that revenue base is pretty impressive. Most of edtech doesn't get to that revenue base alone. When you combine them, we really become a key partner for the university. That, honestly, is how you end up with seven schools across Northwestern in disciplines that range from the business school to The Family Institute at Northwestern University. We love those growth opportunities. It's clear that undergrad is changing the game for 2U. It's clear that the most significant COVID-19 impact for the company is what has happened in undergrad education. There is no question that the consideration set, if you're a great president or provost somewhere in this country, you are thinking about digital transformation fundamentally differently than you were two years ago. We are starting to really see the benefit of that, which is why we said, "Expect more from us in the undergrad space," because they're coming. Awesome. Thanks for the insight. The next question is from Brent Thill from Jefferies. If you can outline your view on the Rule of 40. I know if you take Paul Lalljie's new guide at 21 on the top and six on the bottom, you're getting to a Rule of 27. I know you have longer-term aspirations. Can you just talk to how quickly you can get there and how important that is to you and the rest of the team? Thanks. Brent, let me start off here, then I think Chip will jump in. I recognize you used the guide there and get to 27. I guess I could go with 32 and seven and get to 39, which is this quarter. You're looking at it the right way. The full year is probably the way to look at this. Rule of 40 lies in the eyes of the beholder. Some use revenue growth and EBITDA. Some use revenue growth and cash flows. The bottom line is we use a yardstick, which is the Rule of 40, on how we are creating value as we go through our progression. We're going to hold ourselves accountable to maintaining a healthy top-line growth and to maintain or to continue to expand and improve the margin line for us as we go forward. For us, it is very important that we become EBITDA positive and cash flow positive. We've gotten there. It is something that we focus on. It was very easy in 2020 for us to sit on our laurels, benefit from lower cost per leads, and deliver results because there was demand in the marketplace. Instead, our teams worked very hard to improve the processes within the business, how we do things, how can we do things more efficiently. Those are the things that are going to allow us to maintain the momentum that we had exiting 2020. As we go through the passage of time here, I think we will continue to use the Rule of 40 as a good benchmark. The bottom line is all we can ask ourselves is to continue to improve on a year-over-year basis on a Rule of 40 level. It is not meant for us to provide, here's when we're going to be at 40, or here's when we're going to be at 35. We're going to push ourselves, right? We tasked ourselves with getting to EBITDA positive back end of 2020. We did that in Q3. We tasked ourselves this year with getting to cash flow, crossover into cash flow positive on a trailing 12-month basis the back half of the year. We achieved it in the Q1. We will continue to set ourselves aggressive targets internally. I think rest assured, Brent, you can look to us to continuously improve that Rule of 40 on a year-over-year basis. Yeah. What I would add is we are at a stage of life, we are seven years in as a public company, giving long-term prognostications as to what will happen on a Rule of 40- basis, we're just not going there. What we are willing to do is put the results out and let them speak for themselves. I will tell you, if you look at slide 13 of the earnings presentation, that is a pretty sweet chart. That is our free cash flow. Incredibly proud of what the company has accomplished over the last two years. A tremendous amount of work with market-leading growth while simultaneously crossing that historic milestone. Brent, we are thinking about revenue growth and EBITDA together. That is clearly our version of Rule of 40. We really like our odds of improving it as we continue to mature as a company. Yeah, Paul, I wasn't trying to take away from your achievement of the quarter, just more on the guide and trying to reconcile that relative to the outperformance. Really appreciate the color. Thanks again. Thanks, Brent. I was just trying to lighten up the mood here. All good. Thanks. Your next question is from Jeff Silber of BMO Capital Markets. Thank you so much. You alluded to this in your prepared remarks about folks down in D.C. really paying more attention to enhancing skill sets for employers, employees, and the unemployed. I know we had some news this morning from President Biden about the American Families Plan. I'm just wondering if you got a chance to look at it and what you think, if there could be any impact on your business because of it. Thanks. No problem, Jeff. I would start by saying that we've been very pleased with the conversations we're having, both on the Hill and early days of the Biden administration. There is a clear bipartisan focus on reskilling and upskilling. We have 40-plus partners all over the country with great regional balance, where the great university is doing something that the great university historically has not done, which is reskilling and upskilling people directly for the workforce in a way that's meaningful at scale. That's been a strong positive. This morning's announcement, we were actually quite excited about the focus on healthcare, and specifically healthcare related to building a pipeline of skilled healthcare workers with graduate degrees. We think that that is a real opportunity for the company. If you look across our business on the degree side today, I think we're doing high-quality healthcare graduate education at a scale really nobody else is close. At a quality level, just take one example, the physician assistant program with Yale University is just a fabulous program, incredibly high quality. Students come from all over the country. They get to attend Yale University, equally important, they return to their local area to not only do their practicum, but to ultimately practice. That kind of program is really getting noticed by those that care about healthcare education. Jeff Silber, overall, we're pretty pleased with the discussions we're having, and on balance, like what we see. Okay. That's great to hear. Shifting a bit from a competitive perspective, we've been seeing a lot of companies expanding in this space. We had a pretty successful IPO in this space about a month or so ago. Are you seeing more intensity from a competitive perspective? Honestly, no. The company that you're referring to that had a successful IPO, we are very happy for them, and I would say they've been in existence for quite some time, not as long as we have been, but for a long time now. We've been competing in the general ecosystem with most of the players. If anything, Jeff, you've had some folks fall by the wayside. Doing this more and more, you've got to be able to do it at scale. You've got to be able to do it at high quality. One of the things that I think sometimes when we talk about some of the things in the prepared remarks, I understand the importance of focusing on our Rule of 40 and on our cash flow progression, all these things. They're important, but ultimately, these businesses are going to be judged on quality outcomes. If you look at what's happened with retention rate over a decade, it's pretty remarkable what we've been able to do from the standpoint of improving graduation and retention rates. We're feeling like our system is getting better and better. The effect for the students and for the faculty is getting better and better. We feel very strongly about our current Net Promoter Scores. The board pass rates in our programs that have them are very high. From a competitive standpoint, you take just a couple of examples this year of new innovations for the company, the Career Engagement Network, we think elite higher education hasn't quite seen anything like it. An example of something totally different is we rolled out something called the Virtual Field Practicum to allow students that are in clinical-based programs to engage virtually with an avatar first, and then eventually with an actor portraying someone that might have PTSD returning from the war, before they actually deal with somebody in a live setting, in a clinical setting, where they're dealing with somebody who's returned from the war with PTSD or lost everything in a fire. It's been so positive for our social work programs. It's super innovative. The Net Promoter Scores for it are off the charts from the students. We did that to just continue to drive innovation in those programs. I feel like today, more and more, the combination of scale and quality, it's going to be difficult for some of the smaller players to compete with us. You are seeing some folks fall by the wayside a bit. Okay. That's really helpful. Appreciate the color. Thanks. Your next question is from Stephen Sheldon from William Blair. Hi, thanks. Great to see the continued acceleration in the Degree Segment. You guys gave some commentary earlier, but just can you talk about or, I guess, just frame the factors that drove that acceleration this quarter, how much are the undergraduate programs playing into it, and how sustainable this type of growth could be as we think about the next few quarters? We're very proud of the degree business. Ebony Lee and her team, our Managing Director for the degrees, is just doing an incredible job. What I would say to you is we have an internal term that won't make any sense to anybody, but it's called the 15 one percenters. What we mean by that is that these are very large operations and they're complicated. Sheldon, there's a bunch of factors that ultimately drive success for the student. When I say success for the student, I don't mean a successful enrollment. I mean, we are a business where if the student wins, the university wins, and we win. What does that mean? If we retain a student and they successfully graduate, they typically have a great career outcome in our programs. Driving that retention rate, driving small improvements across a bunch of different categories, we say the 15 one percenters. It's like there's not one thing that is going to move the dial. It's a collection of activity from a really great team focused on improving it. You're seeing a bunch of our historic programs, whether it be the Master of Data Science at Berkeley or the Master of Business Administration at Carolina, which I graduated from. You've got programs at historic highs where you've got not just strong enrollment, but you've got really high-quality student marks. You combine that with LSE undergrad or Morehouse, or Simmons undergrad, and those are all really exciting opportunities, which is why you will see us launch new undergrad programs. The degree business, it's just been a lot of effort among a team that is focused on making service their mission and driving this positive outcome for the students. That is not just one of our guiding principles. It is what actually makes this place work every day. Great. Thanks. I guess follow up, I just want to get an update on the concept of stackability and alternative credentials, and specifically as you continue to expand boot camp and short course offerings. Have you seen, I guess, notable changes over the last year or so in how universities are trying to apply the concept of stackability for some of these piecemeal offerings where they can be pieced together by a learner into a larger certificate or degree over time? Yeah. Paul, I could probably take that one for you. We are actively working in a whole variety of different universities on opportunities for people to have pathways from one product to the other. You heard me mention, Sheldon, the close to 15 million people that have come into our world in some capacity and being able to offer those people other opportunities, with great university partners to improve their lives. Sometimes that involves giving somebody an opportunity to move from a short course to a degree. We do think that there will be interesting credit opportunities across the business. It's something we're pretty focused on today. Great. Thank you. We have time for one last question, and your question is from Ryan MacDonald of Needham. Hi. Thanks for taking my questions. First one for Chip. Chip, we've clearly seen some really strong demand in terms of application trends on the grad segment and enrollments. I'm just curious, as you talk to your university partners, what ability do they have to be able to fully service that demand today for the spring cohorts? Are we seeing any of that demand start to bleed into fall cohorts as we think about the H2 of the year? That is certainly our job is to work. In the case of a 2U-powered program, we are, by definition, powering the experience for them, and that includes ensuring that students are fully supported. Our Chief University Operations Officer, Brad Adams, has a very large team focused on helping the university handle the scale that we're operating at. You might imagine that with a brand-new program like Morehouse, we've been working very hard under the leadership of the GM, Karlo Young, to really get them ready for what's today going to be clearly a program that will operate at scale. There are 36 million people with some college credit that haven't completed, and the opportunity for Black Americans is profound. Morehouse is such an incredible institution, with a great history. For the first time, as President David Thomas talks about its Morehouse without borders. You can attend Morehouse and have a really high-quality experience from anywhere in the world. We have to get them ready for that. That is our job. We have liked what we've seen on demand for degrees, not just on the graduate side, but on the undergraduate side as well. It's our job to make sure that not only the doors stay open, which during COVID, I think we handled incredibly well under a tremendous amount of pressure that the world was under, and our schools were under. One note on that point, Ryan, is I'll just tell you definitively, the model that we operate on, ultimately, we call it our shared success model, where we are powering, under 2UOS, a very large component of what the university provides. Certainly not the instruction on the degree side. Pretty much everything else is on our side, and it is under more demand now than it was three or four years ago. I do think that there is some impact from COVID on the interest in expanding opportunities where we can bring not just the expertise and the scale to bear, but the capital to bear. We've been focused on doing that with a capital footprint where we're not sacrificing quality at all but figuring out how to do things more efficiently and better in the process. That is some of what scale gets you. Today, as you heard Paul mention, we kept our head count flat. It went down a little year-over-year, and we were still able to achieve this kind of growth in the quarter, 32%. Firing on all cylinders right now, Ryan. Great. As a follow-up, I wanted to ask about the recent win at Pepperdine and the decision to partner with Keypath on that opportunity. I think this is only maybe the second program you've partnered with Keypath on. Just wondering what made partnering with Keypath sort of the right decision versus going alone as just a solely 2U program, and how does that change the structure of how the program's delivered or priced, if anything? Thanks. We keep finding a way to say yes to our partners instead of saying no. If we can get to a smart yes that works for both sides, what people have to understand is you don't get to become a dean at Pepperdine unless you're incredibly successful in your own right and are building a high-quality operation and building a strong, sustainable operation. Being able to say yes, Keypath is part of our tool set. We've been very happy. To be clear, working with Keypath has been an absolute pleasure. Steve Fireng and the team there, they're a great company. Just like with our Guild, if we can partner with someone else to expand the opportunity set, we're going to do it. Excellent. Congrats again. I will now turn the call back over to Chip Paucek for final remarks. Thank you everyone. We appreciate you joining us this quarter, and we look forward to seeing you down the road. Take care. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.