Ladies and gentlemen, thank you for standing by, and welcome to the 2U, Inc. First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. If you should require any assistance, please press zero on your touchtone telephone. I would now like to hand the conference over to your host, Lillian Brownstein, Deputy General Counsel. Thank you. Please go ahead. Thank you, operator. Good afternoon, everyone, and welcome to 2U's First Quarter 2022 Earnings Conference Call. On the call this afternoon are 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 and slide presentation as well as a simultaneous webcast of this call. A webcast replay of the call will be made available for the next 90 days. Statements made on this call may include forward-looking statements regarding our financial and operating results, the continued impact of the COVID-19 pandemic, plans and objectives of management for future operations, the integration of edX, student and university demands 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 plan or duty to update them. Please refer to the earnings press release and to the risk factors described in documents we file with the SEC, including our annual report on Form 10-K for the year ended December 31, 2021 for information on risks, uncertainties, and assumptions that may cause our 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 for comparable GAAP results in our earnings press release and on the investor relations page of our website. With that, let me hand the call over to Chip. Thank you, Lillian. Welcome, everyone, to our first quarter 2022 earnings call. Let's get straight to the results for the quarter and our guide. We had a strong first quarter as we expected. We delivered $253.3 million in revenue, a 9% year-over-year increase over Q1 2021, and adjusted EBITDA totaled $12.3 million. For guidance, which Paul will talk about in more detail later on in the call, we're keeping our 2022 revenue guide in line with what we said in February, and we're increasing our adjusted EBITDA guidance, which is now expected to range from $80 million-$90 million. This represents growth of 28% at the midpoint and a $5 million increase to our previous guide. Overall, we're pleased with our Q1 results and how things are shaping up for the rest of the year. To be clear, the macro environment continues to remain complicated due to the ongoing impacts of COVID, the strong labor market, and some overall softness in education traffic and demand. People are also returning to normal life, and that has some impact. I'm pleased to say we're holding our own nicely, all while we continue to transform 2U to a platform company. We believe our free-to-degree product portfolio with edX as our consumer brand is just what the market needs. Higher education, like so many industries, is becoming consumer-centric, a dynamic only accelerated by COVID. We believe that the companies who best understand this learner-centric shift and can offer students the education and skills they want when they need it throughout their working lives will win. We've been working on integrating edX since we closed in November, and I wanted to take a moment to give you some details. edX is now the most comprehensive free to degree marketplace of educational offerings worldwide. If you go to edX.org today, not only will you see thousands of open courses, you'll now find an unmatched portfolio of all of 2U's offerings across degrees, boot camps, and executive education available to learners everywhere in the world. It's pretty incredible, and the first time in 2U's history where all of our program offerings can be found in one place. We're off to a great start on edX, but we have much more to do. We see six keys to unlocking the full potential of edX.org and cementing it as the preferred destination of choice for learners across the globe. Those six are, number 1, traffic, number 2, SEO and content publishing, number 3, portfolio marketing versus single product marketing, number 4, product evolution with stackable credentials, number 5, white label opportunities and revenue model flexibility, and number 6, new international channels and enterprise expansion. We're making some good progress across all of these dimensions, and I'll hit on some with a few comments. We grew learners this quarter to 44 million, primarily with greater SEO efforts. Right out of the gate, post-close, SEO and content publishing have been a core focus of our team. It's going unbelievably well, and we're already seeing it bear some pretty compelling fruit. For example, if you type executive education into Google, you should see edX as a top organic search result for that term, often in the top five. Go ahead and try it. You can do the same for online boot camps and online master's degrees. Although these offerings have been on edX.org for only a few months, they already rank on page one of Google's organic search returns. In many cases, in the top five. This is a big deal. It means not just monetizing the existing traffic, but creating better and better lead flow every day. Organic traction on Google is a key driver of our business. You'll see us actively continue to publish new content on a discipline basis, a career basis, and a learning opportunity basis, all of which should continue to significantly improve organic search results across a variety of categories. It's early, but these SEO efforts are already creating some really great traction for 2U's products and partners. We're seeing run rates of 500,000 leads per year coming to the 2U prospect forms on edX in 2022. This represents nearly 10% of our lead volume company-wide, with no additional marketing cost involved. Better, we expect to be able to triple this amount over the next 18 months. The reality is, a tiny fraction of the edX traffic are even seeing the 2U products. We have much, much wood to chop. University of London and LSE undergrad are an example of a 2U degree benefiting from this new lead flow. LSE undergrad is a global brand, a high-quality experience, and a very affordable degree, roughly $26,000. Learners are coming from all over the globe. We're seeing significant traction from edX. Over Q1 alone, edX already represents 20% of our lead volume and our largest non-paid channel for this degree. Those leads are submitting applications at a 30%+ better rate than leads from our paid channels. That is huge. The implications for this across our business is significant, particularly as we create more affordable pathways for people and improve our product's fit with edX. On new products and stackable credentials, this takes time, but we're also making considerable progress. We love the MicroMasters and MicroBachelors programs. We have 30+ MicroMasters in negotiation with our university partner base. These will create quality, career-focused options for our learners, saving them tuition dollars in the process. Each MicroMasters offers 9-12 credits for free to the learner, stacking into the full master's program if the learner wants to move ahead with their studies. Now, before I turn it over to Paul, I wanna add a quick comment on both the enterprise channel and our university pipeline and partners. The enterprise channel continues to grow quickly. We saw almost 70% growth in revenue from enterprise in Q1 compared to the previous quarter. We've integrated all activity under the edX For Business brand, and we're seeing a lot of interest and traction in the market because of the breadth and diversity of edX's offerings. On the university side, we continue to see growing demand from new and existing clients. We're on a bit of a roll now. I'm happy to announce our newest degree with the University of North Carolina at Chapel Hill. UNC is launching a new school of data science and a new degree program, a master's in data science. This will launch in 2023. We love this opportunity with one of our flagship clients. Overall, partners are excited about the opportunity that edX brings to the table as a digital transformation partner and a platform for serving adult learners worldwide. As a testament to the central role great universities play in the 2U vision, we're excited to announce the launch of 2U's first University Leadership Council. The council comprises 15 presidents and provosts from our partners who will help guide us in our mission to unlock human potential through high-quality, affordable online higher education. Members include Alan Garber, Provost of Harvard University, Cynthia Barnhart, Provost of MIT, and Wayne Frederick, President of Howard University, among other incredible leaders. The full council can be viewed at edX.org. Take time to check it out. Now, I'll turn it over to Paul to get into the financials. Thanks, Chip, and good afternoon, everyone. We reported solid top-line performance with strong adjusted EBITDA and cash flow performance, which is particularly noteworthy considering that first quarter is typically the higher expense quarter and the quarter with the highest use of cash. We did this while diligently prioritizing the execution and integration of edX. Revenue grew 9% to $253.2 million over the first quarter of 2021. We saw growth across the portfolio. The Degree Program Segment grew 6%, and the Alternative Credential Segment grew 15%, all on a year-over-year basis, while edX contributed $10.9 million. Expenses for the quarter totaled $364.7 million, including $18.3 million of operating expense from edX and $15.8 million of non-cash impairment charges related to certain of our acquired intangibles and goodwill assets. Adjusted EBITDA for the quarter totaled $12.3 million, a margin of 5%, while free cash flow used on a trailing twelve-month basis came in at $34.1 million. In summary, we reported solid top-line performance in a difficult marketing environment and exceeded our expectations on adjusted EBITDA and cash flows. After a discussion of results for the quarter, I will provide an update on the balance sheet and cash flow statement, and then conclude with some thoughts on our financial outlook for 2022. Taking a closer look at our results. Revenue for the quarter totaled $253.3 million, up 9% from a year ago, driven by 5% increase in full course equivalent enrollments or FCEs, which came in at 85,000 for the quarter. FCEs increased 6% on a sequential basis. In the Degree Program Segment, revenue in the first quarter totaled $154.2 million, growth of 6% from the first quarter of 2021. This increase was driven by higher student enrollment, a 4% increase in FCEs, and a $2.7 million contribution from edX. Revenue from the Alternative Credential Segment totaled $99.1 million, growth of 15% from the first quarter of last year, driven by higher student enrollment, an 8% increase in FCEs. This increase includes 3% growth in revenue from our boot camps, 9% growth in exec ed revenue, and an $8.2 million contribution from edX. Now let's take a closer look at cost and expenses. Operating expense for the quarter totaled $364.7 million, up from $269.6 million in the first quarter of 2021. This increase includes $18.3 million of operating expense from edX and a $58.8 million non-cash impairment charge. Let me spend a few moments on the non-cash impairment charge. Following the decline in our stock price during the first quarter, we determined that a triggering event had occurred and consequently performed an interim impairment review, which led to a write-down of $30 million of trade name and $28.8 million write-down of goodwill. Personnel and personnel-related expense, our largest expense line item, increased $5.5 million for the quarter to $124.5 million, with edX contributing $7 million. Moving on to profitability. Net loss for the quarter totaled $125.8 million, an increase of $80.2 million from the first quarter of last year, reflecting the $58.8 million of non-cash impairment charge, $6 million in higher interest expense, and $18.3 million of additional operating expense from edX. Adjusted EBITDA totaled $12.3 million for the quarter. Adjusted EBITDA margin in the degree program segment was 23% for the quarter, a 6-point improvement over the first quarter of 2021, showing the inherent profitability of the degree segment business model. Adjusted EBITDA margin in the Alternative Credential Segment was a loss of 24%, compared to a loss of 14% in the first quarter of 2021, driven by an $18 million impact from edX expenses. Now for a discussion of the balance sheet and cash flow statement. We ended the quarter with cash and cash equivalents of $233.6 million, a decrease of $16.3 million from year-end 2021. Our accounts receivable balance totaled $77.9 million, up $10.6 million from the end of the previous quarter. Fluctuations in our accounts receivable balance reflect the timing of payments from our university partners, which often matches the academic calendar. Unlevered Free Cash Flow usage on a trailing twelve-month basis was $34.1 million, compared to a net use of $33.9 million at the end of 2021. Now for a discussion of guidance. Our priorities for 2022 center around unlocking the value of edX, continued investment in our Degree Program Segment, and improved profitability in the Alternative Credential Segment. We are affirming our revenue guidance for fiscal year 2022. We expect revenue to range from $1.05 billion-$1.09 billion, representing growth of 13% at the midpoint. We are increasing our adjusted EBITDA guidance, which is now expected to range from $80 million-$90 million, representing growth of 28% at the midpoint. In addition, we expect capital expenditures to be approximately $80 million and weighted average shares outstanding to be approximately 78 million. Let me provide some color on our expectation for the quarterly progression of our revenue for the remainder of the year. On our last earnings call, we shared that we expect a challenging and unpredictable marketing environment. While we have seen that, we still expect to see revenue growth accelerate in the second half of the year, and we expect flat to modest growth in the second quarter on a sequential basis. To conclude, our first quarter results showed resilience in enrollment and revenue, and we are proud of our team for going above and beyond to deliver these results by focusing on disciplined execution along with integrating edX. With that, let me hand the call back to Chip. Thanks, Paul. Before we turn to questions, I want to spend a minute talking about the first set of Gallup results that were released last week from our recent survey of nearly 4,000 boot camp graduates. The findings are compelling and a clear reflection of the career-enhancing value our boot camps can deliver. Gallup found that one year after graduation, the median salary for all boot camp graduates surveyed was $11,000 higher than what they said they were earning while they attended the boot camp. Gallup also found that the median boot camp graduate who worked full-time during and after the boot camp offset 59% of what their boot camp program cost them in the first year after graduation. We hear a lot of talk in higher education about ROI, and this is what great ROI looks like. We're delivering this ROI at an unmatched level of scale. 48,000 boot camp graduates to date across 50+ partners. In the coming weeks, Gallup will be releasing more data about our boot camps, including the career satisfaction of graduates and the impact of boot camps on creating equitable pathways for historically underrepresented learners to enter careers in STEM. Keep an eye out. We know that our boot camps can deliver life-changing outcomes, which is a big reason why we're expanding our access partnerships across the United States and overseas. These are public-private collaborations with workforce agencies at the state and local level, nonprofit partners where funding is provided directly by the government or philanthropic support, which allow the boot camps to be offered at even more affordable prices, and in some cases for free. We currently have access partnerships up and running with the following university partners, the University of Birmingham, University of Central Florida, University of Denver, University of Kansas, University of North Carolina at Chapel Hill, University of Oregon, University of Texas at San Antonio, the University of Texas at Austin, and the University of Utah, with more in the pipeline. We believe these public-private collaborations can and will be an effective and scalable way to help local communities across the country meet the growing demand for skilled tech workers, and that is a winning proposition for us all. Now let's open it up to Q&A. Participants, as a reminder to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile Q&A roster. Our first question comes from the line of Stephen Sheldon from William Blair. Stephen, the line is open. Hey, thank you. First I wanted to ask on the marketing side, have you seen any changes in your efficiency to fill cohorts and programs across businesses? I know a lot of education peers in the industry are talking about students pursuing work right now, given where wages are, and curious if that's making it harder or costlier to fill the programs that 2U supports or if any headwinds there are starting to be offset by some of the positive market efficiencies you talked about from edX. Hey, Stephen. We did plan for inflation in our budget for marketing costs. That was baked into our plan, so we felt pretty ready for it. There's no question that you do see some impacts to the business. You know, labor costs are increasing, you know, makes it more competitive to hire people. We are seeing some wage pressure. On the marketing side, you know, we've actually seen more stability, to be clear. Volatility has definitely gone down since Q1. We feel like it's less volatile right now than it was in Q1. Given that we baked increases into the budget, you know, we're working through them. Now it's also clear that, you know, the degree business has always been and always will be somewhat countercyclical. You can argue that right now when you're at full employment is a harder time for the degree business just conceptually. We also took that into account. We feel comfortable right now with how things are going. Of course, when the need for reskilling and upskilling is significant, and the need for companies to continue to prepare their workforce, significant. You might have seen the Chief Learning Officer survey that showed great growth ahead for enterprise. You know, we mentioned in the call that we saw 70% quarter-over-quarter. Ultimately, you know, we feel that we're, you know, we've got it pretty well covered. Got it. That's helpful. Did want to ask about the enterprise traction. You know, just be great. That was great to see. Great to get some more detail on what's driving that between what you got from edX, the assets you already had, and the benefit of the Guild partnership. I guess, what are you seeing across those different channels of engagement with enterprise customers? You know, really strong demand for boot camps in particular. There's no question that technology training is a huge part of this. We're seeing strong demand for boot camps across our own enterprise activity and our Guild partnership. Executive ed is, you know, we do think the enterprise channel is critical to that product line in particular. You know, pretty major uptake from a whole bunch of different clients. We decided to not get into listing clients or listing wins into the earnings call just simply for competitive reasons. You know, 70% quarter-on-quarter sequential non-trivial. We're obviously a lot bigger than most people in the space. The enterprise number, you know, historically, was doing really well but hadn't registered. You know, it's definitively starting to matter. You know, we'll provide more and more clarity on the channel strategy over time. You might have heard me comment that we've now integrated all enterprise activity under the edX For Business brand, and that's definitely been a win. You know, part of really the joy of this overall transaction is that it is, you know, impacting pretty much all parts of 2U. That's a good example. Great. Thank you. For our next question, we have George Tong from Goldman Sachs. George, your line's open. Hi. Thanks. Good afternoon. Last quarter, you had mentioned seeing some delays with implementations and new program launches. Can you provide an update there on the progress for some of those programs to get reaccredited and the timelines with some administration changes and how they're approaching a relaunch or new launch of those programs in 2023? Yeah, we feel like we're on track right now with the expected program launches for this calendar year, and we're feeling, you know, you heard me mention that we feel like we're on a bit of a roll. We are feeling, you know, definitely, an improvement in the pipeline and what next year, and the year after looks like. What's actually quite interesting is because some of the types of programs that we run take a long time to get through the process, we're actually building a nice queue of programs for 2023, and believe it or not, 2024, which I know investors tend to, you know, be surprised that, you know, universities do work in, you know, five-year planning. You know, sometimes ten-year planning. We feel like we're building a queue of particularly licensure programs, which we've done very well with for the past four years. You know, we're definitely seeing more growth from existing partners. You know, you heard me mention University of North Carolina at Chapel Hill. The institutional programs that we built there were. You know, clearly we had gotten off to a slower start there, and it's really starting to come along. You know, very excited that we now have our first relationship for degrees in Australia with University of Sydney. That is a significant relationship. University of Sydney for the U.S. folks on the call, University of Sydney is one of, by far, the most prestigious schools in all of Australia. So we think that's a significant opportunity. edX is clearly helping with existing partners. You know, the transition to a platform company is meaningful. You heard us mention the impact on the LSE undergrad program. That is a perfect, truly a perfect, program for the edX overall platform. You know, you'll see us do many more programs like that, from the standpoint of, you know, creating really affordable options for people worldwide to, you know, to unlock their potential. What we're seeing is, you know, edX will be a weapon in our ability to not only hold the cost, but to bring the cost down over time. One of the misnomers in the entire OPM space is that, you know, because you're sharing revenue, people think that you're interested in higher prices, and that's just ridiculous. We actually have the entire burden of the marketing expense and the expense of finding the right student for the right program, and we don't make the admissions decisions. Ultimately, these are not inelastic goods. As the price goes up, conversion goes down. It's really, really good for the world to have more affordability. It's also really good for our business. You'll see us continue to have more and more affordable programs over time. edX is definitely having a real impact on our ability to generate new pipeline opportunities. Got it. Very helpful. Secondly, with lead gen costs, we've certainly seen increases over the past year on cost to acquire leads. Can you talk about how those costs have evolved in both the degree program side of the business and then also the alternative credential side of the business? George, let me start off, and Chip can join in after. You know, we planned, we budgeted an inflation in cost per lead across our business for 2022. We are still seeing costs at that inflated level. However, it is, we're seeing some stability, and we are seeing some more predictable costs as we go through the periods. Generally, it is still inflated, and we have maintained the spend at the levels that we have in our budget. In fact, just a little bit below our budget in the first quarter. Yeah. I mean, you know, George, now that we're starting to give more color on edX, you know, there's many reasons why we did it, but clearly, organic search is just a huge important part of our business. It's a lever for our business. You know, you can now just go do it on your own and look, and you know, go on Google and type in these search terms that are relevant. What you'll see us do over time is offer more and more opportunities, more specific content marketing with the incredible domain authority of edX that will allow us to just open the doors to more people to further their goals. I mean, the best driver of organic is edX. It is a huge part of our future from the standpoint of driving greater affordability, because we can obviously use it to pull the cost down. We have seen some stability. I would also say, maybe just to add to this, to the first question, it's also important that one of the things that we find curious at times is people have read-throughs from other ed tech companies that honestly have very little to do with our business or very little similarity to our business from a product standpoint. You know, from our standpoint, we had built in what we thought was a reasonable amount of inflation into the marketing cost. We obviously spent a lot of capital to do something that we think long term will really combat that in a significant way. You know, you're talking about a top five education website worldwide, and probably most importantly, one that unlocks people's potential. Free courses are great for the world, and they also create an incredible marketplace opportunity. Very helpful. Thank you. For our next question, we have Ryan MacDonald from Needham. Ryan, your line's open. Hi, Chip and Paul. Congrats on a nice quarter here. You know, first maybe a question for both of you. I really like the comment about the 30+ negotiations on the MicroMasters program. Can you kind of walk us through, you know, as your existing partners look to adopt those, you know, what the process is in terms of launching those programs and you know, what maybe impact that would have on sort of the profit margins or the adjusted EBITDA outlook as we see today? Thanks. Yeah. Hey, Ryan. So that, you know, we love the MicroMasters. That's why we specifically called them out. You know, stackable credentials are a big part of the future. You're creating just incredible opportunities for people to unlock their potential, to get a certificate that they can use to improve their current sort of job prospects. Then if they wanna continue, you know, you've got this credit load that comes off. You're creating a pathway of people into a degree program. Now, what's fascinating is they take time. You know, while they take time, like, where this has been done at edX to date, you've just got incredible results. You know, you take the MITx MicroMasters in Supply Chain Management, and you look at the impact that it has had historically on the MIT on-campus Supply Chain master's. You know, they used to run a small cohort, and they effectively doubled it because of the MicroMasters impact. Now, we don't expect things to double, nor need them to double to have a huge impact. If you're able to generate an opportunity to have, you know, a 10% lift or something like that into a program, you're talking about a huge economic opportunity, but most importantly, you're driving affordability for the learner. You're talking about really these. The reason we love them so much is they're an excellent alternative credential for somebody to improve their life. If they wanna continue their studies, you know, and they wanna sort of take the next step, even if they wanna take it, you know, down the road, you've got this ability to drive, you know, a $10,000 cost difference into the master's program. I mean, you're talking about material cost savings. Those will take time. You know, the one bummer is, you know, everything takes time. The reason we put in the 30+ is that, you know, our university partners are really excited about them. Like, we're gonna have a whole bunch of them. Are they gonna have an impact on this calendar year financially? No. You know, we're hoping to get a couple of them launched this year. Should they next year? Absolutely. Thanks. Maybe as a follow-up, you know, just as a clarification. You know, obviously, you called out the tight labor market and sort of the impact that that is seemingly having on sort of bleeding into undergraduate enrollments and, you know, stopping programs early to enter the labor force, et cetera. As you look at the guidance that you set for the full year, are you essentially assuming no improvement in sort of this or change to the current labor market dynamics, when you think about that top line? Thanks. First of all, once again, if we're talking about read-throughs from other companies, you know, we have three undergrad programs to date, and we're about to announce our fourth. We have 187 master's programs, to be clear. It is a very different, it's a different construct. Now there's no question that graduate degrees are more interesting to people when they are looking for jobs. That's not new. You know, we've had a really strong economy for a couple years now, you know, we expected it. Over time, if the economy does, you know, take a step back, is that good for our degree business? Sure. We're operating in this current environment, and we feel like we're prepared for it. We also have the You know, you've got some tailwinds from that, you know, the boot camps are doing incredibly well, from, you know, in the enterprise channel and there's a reason. You know, the reason that we included the Gallup research, I understand why we wanna talk about things like, you know, the marketing levels and our EBITDA levels, but, like, at the end of the day, this business is about producing results for human beings. When you look at the results of that boot camp business, like, the ROI immediately is there, and people go into tech and obviously do well over time. What I feel like is everyone else in the boot camp space is doing very small numbers. You know, if you're gonna do this at scale, those types of results are impressive. We do think that that has some tailwind aspect to it. You know, I guess I should have also mentioned that, you know, something that, because of edX, has become a lot more important to you is we are now courting all kinds of different corporate partners to create content on edX, and it's going very well. In Q1 alone, we had new products from IBM, Google, The Linux Foundation, MathWorks, and Codio. Those types of programs are very attractive to people in this current labor market, and we expect to do more of it, and that's part of the reason that we're seeing the kind of growth in enterprise we're seeing. You know, we see that as a tailwind. Yeah. Chip, I mean, at the end of the day, we have multiple approaches to hitting the numbers that we have. You know, in this economy that we're in here, employers are doing more to keep their employees. Alt-credit is one approach. Degree segment is another approach. As we think of some of the things we talked about, edX, MicroMasters. It's multiple approach. At the end of the day, we also have the ability to deliver stronger EBITDA depending on how we see various expenses grow to support revenue. Yeah. I thought, Paul, it was interesting, like, if you look at the rest of the space, you've got people seeing weakness in consumer offset by enterprise. Yeah. You know, we thought our consumer, you know, held its own. You know, of course, we want a bigger enterprise business. It is where I'm starting to get meaningful. But net net, you know, we saw growth in our degree business. I think a lot of others did not. Very helpful color. Thanks a lot. For our next question, we have Josh Baer from Morgan Stanley. Josh, your line's open. Great. Thanks for the question. Paul wanted to revisit some of the commentary on free cash flow. Just if you could help walk through again free cash flow burn and then timing for free cash flow break even, that would be helpful. Just to like make sure we know, is it unlevered or levered free cash flow, operating free cash flow, just all any details on the trajectory on free cash flow side. Hey, Josh. I think, you know, if we look back at the first quarter and when we provided numbers, we had $80 million of EBITDA, $80 million of CapEx, expecting a neutral working capital for the year, that would have given us somewhat a net neutral free cash flow. When we look at it on a levered basis, with debt payments included in it, which is about between $45 million-$50 million, we were expecting about a $50 million use of cash on a full year basis, on a levered basis. After our first quarter results, our largest expense quarter, the highest cash usage for the quarter, we only burned $60 million. If we look back at our plan at the beginning of the year, we were probably expecting somewhere between $25 million and $40 million of use of cash in the first quarter. We ended up spending about $60 million of cash in the quarter, net cash, and we also ended up delivering more EBITDA, which we passed through to the guidance. All of this means that as we sit here today, we now have $85 million of EBITDA expected for the year. We have $80 million of CapEx, which is probably on the conservative side of things, but take it for what it's worth. That's positive $5 million for the year. Then we have $45 million-$50 million of interest payments. Net net, at the end of the year, we should be expecting to be use of cash of about $40 million on a levered basis. Now, all of this is dependent on how the next three quarters unfold. I think what we've demonstrated in the first quarter is that we have a plan that had multiple ways of hitting the top line and delivering on the bottom line. Most importantly, we have variable expense as a model that says if return on investment is not there on the marketing spend, you will see that drop to the bottom line. Also we're finding ways, you know, Mark Chernis and the operating teams are finding more and more ways to deliver revenue at lower cost. We're optimistic on the adjusted EBITDA side of the equation, and we're hoping that we can see favorable marketing conditions to help us deliver revenue. Okay, great. That's helpful. Wanted to ask one. I think the number of registered learners, if I'm right, moved up about 1 million quarter-over-quarter. Just wanted to get your take on that. Like, are you happy with that level? Is that the right level going forward? How should we think about that? We still firmly believe that. First of all, it was a 2 million increase, Josh, and almost no marketing, to be clear. I think if you compare and contrast that across the industry, you know, we are, you know, we're pretty full right now from the standpoint of digesting what is a very significant transformation, not just an acquisition. We're not in the process yet of spending marketing dollars on edX or the portfolio of edX. It was really just organic and SEO, and there's a lot of blocking and tackling. When I said we have a lot of wood to chop, like, we have a lot of work to do, but it's actually starting to work. We will pick up the pace of the learner acquisition, and particularly, you know. We're starting to see, you know, the benefits of doing so. What's interesting about, you know, one of the items that I listed on edX that we didn't talk about at all on this call, because you can only talk about so much, is one of the six keys, portfolio marketing versus product marketing. You know, every product historically for 2U, if you think about how profound what's happened is every single program has its own marketing funnel, and we're trying to find somebody at that one moment that is the right person that can get in, and we don't make the decision, that is interested in attending, you know, University of California, Berkeley data science right now. Like, that's what we do. That's hard. What if you're talking to somebody that might want an MBA but doesn't know what type of MBA? Even better example, what if you're talking to somebody in a counseling discipline? We have many different counseling programs, and they get very specific. Do you want marriage and family? Do you want clinical psychology? Do you want social work? Do you want speech therapy? You know, there's many different types. We've never been able to market to those people without being as specific as that individual program. The idea of this portfolio marketing, we think is really relevant, and we think will drive the number of learners into the system because ultimately, starting with free is an excellent way to introduce people to topics and to drive interested learners into different types of programs. We fully believe long term in the free expression. I would also tell you, like unifying registration across the entire 2U system, I know that sounds weedy, like, as we start to do things like that, start to offer applications across edX, start to offer all conversion across edX. Right now, you click on a card, and you go outside the site. Like, none of that's optimal. This is very early days, and we're already talking about 10% of our lead flow. We do think that you're looking at, you know, really a very significant change to the way we think about marketing over the next three years. You know, that's one of the reasons why we're being careful about how much marketing dollars we put behind edX today. Now, each individual program is kinda operating at the efficient frontier of that program. There's a lot of belief here, based on what we're seeing, that the bottom quartile of that degree spend could be spent better by doing it at the top of the edX funnel. We just need a little bit more time. I will tell you, having done this job for 14 years, you just gotta be really careful about how you deploy the marketing spend. You know, we're just gotta be careful and thoughtful about how we deploy the spend, just, you know, having learned some lessons from our past life here. Thank you. For our next question, we have Jeff Silber from BMO Capital Markets. Jeff, your line is open. Thanks so much. Just wanted to go back to the FCE numbers in both segments. Both of them accelerated compared to what we saw last quarter. I'm assuming it's probably too early for edX to have had an impact on those numbers, and I wonder if you could just give us a little bit of color on what you were seeing, why you saw that acceleration. Jeff, yes, it is a bit early for edX to contribute here in the FCE contribution. If we look at it from a quarterly perspective, it is basically the production from marketing spend that we had in the fourth quarter, productive marketing spend that we had in the fourth quarter. Also it's the beginning of a lot of the academic calendar for some of our classes. This is something that we were expecting, something that we were projecting, and it basically represents prior period marketing spend that we had projected. It also has some seasonal impact. It is the beginning of presentations, particularly in some of our exec ed courses. It's basically across the board. If you look at both the degree segment FCEs increase, as well as the alternative credential, it's both of them. Now keep in mind that some of the increases also has to do with contributions from edX master's, which is in the degree segment, although it's minimal. I wanted to make sure I called that out. In the alternative credential segment, we did not include any of their FCE in that particular segment. That is purely organic increase in the alternative credential segment. Okay. That's really helpful. Thanks for pointing that out. My follow-up, and I hate to switch to a regulatory issue, but you know, I think a number of us have been waiting for this GAO report on OPMs, which I believe just came out earlier today. I haven't read every single page of it, but it looks like they're recommending just providing clearer instructions to auditors and colleges about the OPM arrangement that the schools are involved with. I'm not sure if you had a chance to look at it, but I'm just curious if you have. I have. What your thoughts are on the report. Oh, okay. Great. All right. Thanks. Any thoughts would be appreciated. Yes. We reviewed the report, and we're very supportive of the GAO's recommendation. Number one, we've led the industry in transparency. We put out transparency reports for multiple years. We've always complied with the rules regarding incentive compensation. Whenever our university partners have been asked for information about how we can compensate employees when they've had any kind of audit, we've happily provided it. You know, the reality is, as the OPM industry continues to grow, it's become an even more vital part of the higher ed ecosystem. Jeff, greater transparency and continued oversight will actually ensure that the industry as a whole is serving the best interest of students, and of course, universities and also taxpayers. You know, we've worked with both Democratic and Republican administrations from the beginning in a constructive way, and we continue to actively engage not just the Department of Education, but members of both sides of the aisle on what an appropriate regulatory landscape for this increasingly important segment looks like. You know, we thought it was positive. Okay. I appreciate the call. Thanks so much. For our last question, we'll have Brent Thill from Jefferies. Brent, your line is open. Thanks. Hi, guys. This is David Lustberg. Thanks for taking the questions. I wanna touch on just the EBITDA guidance increase. I think the midpoint's up $5 million. I know last quarter you called out $30 million or $40 million of a headwind from edX. I'm just curious, is this coming from core 2U side or edX side, or is it a little bit of a combination of both? I think it's a combination of both, right? Let me start with a couple of numbers here. If you look at the edX numbers that we provided at the beginning of the year, we said roughly around $35 million. If you look at the run rate that we have, the first quarter numbers produced about $7 million. I think it was $10.9 million of revenue and $18.3 million of expenses. That's about $7. The run rate that's $28 million run rate, and we expect the next three quarters to be better than the first quarter. That says edX is gonna burn less than we had anticipated at the beginning of the year. That's one bit of contribution. The second one is, if we look at the personnel and personnel-related expenses, I said that increased about $5 million- $124 million for the year. I also said that edX contributed $7 million of that $124 million, which means that overall there is savings on the personnel and personnel-related expenses. I'm a little more cautious on that one because personnel and personnel-related expense shows a savings, given the environment that we're in now, given the macro environment, given the Great Resignation, we do expect that the wage component of personnel and personnel-related expense may put some pressure on that number as we get through the back half of the year. Overall, I go back to our ability to use technology and our human capital extremely well as an organization to deliver revenue cheaper and faster. I think we'll continue to see operating leverage as we go through time. The 85 is simply a representation of operating leverage across the board, not any one particular thing. Mm-hmm. Great. That's really helpful color. Thanks for that. The second question, you know, you were talking about the enterprise side, and apologies if I missed this, I got pulled in with the operator. But can you put any color on how many enterprises you guys are in today or just maybe your penetration within the enterprise or your ability to cross-sell over time? Or maybe just color on the growth rate. I know I think you said 70% quarter-over-quarter, but maybe how that compares to some other quarters to help put that into context would be really helpful. Appreciate it. Yeah, I guess, you know, we're very aware that, you know, this is a segment that is keenly of interest to the investor community. You know, effectively what's happened is edX has opened a ton of doors. You know, basically, Guild obviously exposes us to new enterprises. You know, we're at a point where we're aware that as we give greater detail to the street throughout this calendar year, you'll hear more and more from us on what the segment overall looks like. Sorry, what this line of business looks like, how it fits across products. I mean, what's interesting is it is across all of the 2U products today. You know what I'm saying? That's real. We're not at a stage yet where we can give you a tremendous amount of additional detail. It is 70% sequential growth, and right now, you know, 60% year-over-year. Great. Really appreciate it. Thanks. There are no further questions at this time. I'll hand it back over to Chip Paucek for closing remarks. Thank you, everybody. I guess that's it, and that's all. We will look forward to talking to everybody throughout the quarter. Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.