2U and Coursera: A tale of two earnings calls

O ET

Glenda Morgan
April 28, 2023
Insights into regulatory environment, OPM demand, and cost of marketing

Both 2U and Coursera held their Q1 earnings calls this week. Listening to the two earnings calls, it is hard to believe that the two companies operate in similar spaces. The tone of each call was very different, though there were some elements of the content of the calls that were similar. Both the differences and similarities tell us some interesting things about what is happening with OPMs and online learning. There was a lot of news in the calls, but I want to focus on a few things in particular:

The way that the companies are publicly handling the current regulatory environment

Demand for OPM services

Costs of marketing

The current regulatory environment

The two companies dealt with the issue of the Department of Education’s Dear Colleague Letter (DCL) around bundled services and revenue share as well as Third Party Servicers in very different ways. The 2U call began with an eight-and-a-half-minute long statement from CEO Chip Paucek about the regulatory guidance, the uncertainty it created, and their response to it. It was a clear, strong, and cogent analysis of the issues. The topic also came up numerous times during analyst questions, for example about what impact the uncertainty was having on the pipeline, on whether 2U was working to reduce its exposure to Title IV programs, and how it was changing how they run the company (none, no, and no).

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