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  "documentTitle": "2U, Inc. (TWOU)",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2018-07-19 00:00:00",
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  "notes": "The slide uses a comparison table to highlight operational and accounting differences, specifically calling out 'Aggressive' revenue recognition in the short course segment.",
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      "text": "Revenue recognition differs in these two segments. The short course segment recognizes 100% of the course cost and then expenses \"curriculum and teaching\". The full course segment only recognizes 2U's \"tuition take-rate\". In both segments, 2U is partnering with universities. Why are they recognizing gross course revenues in one case and just its portion in the latter?",
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      "text": "The revenue visibility in the short course segment is significantly less given a course length of 10 weeks, and initial contact to conversion of 1 month versus the full course segment comparable of 2 years of study and 7 months from initial contact to conversion.",
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      "text": "A Full Course student represents 10 – 20 FCEs vs. a short course student that represents 1 FCE.",
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      "kind": "callout",
      "text": "Why are they recognizing gross course revenues in one case and just its portion in the latter?",
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      "text": "revenue recognition",
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      "kind": "paragraph",
      "text": "2U acquired GetSmarter, a online short course provider, on July 3, 2017. We find that the Street all too often does not disaggregate \"tuck-in\" acquisitions and ascribes the same valuation multiples from the previously existing business. The Short Course segment offers significantly less revenue visibility in a more competitive marketplace where brand is often less significant than the content of the course.",
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      "text": "In our GetSmarter business, students enroll with and pay tuition directly to GetSmarter, and we recognize the full amount as revenue. We then pay the university partners their share upon course completion, and this expense will make up the first part of a new cost line on our P&L called curriculum and teaching — Catherine A Graham, CFO (2Q’17 Conference Call)",
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      "kind": "source-note",
      "text": "Source: Company Filings, Company Transcripts and Spruce Point Estimates",
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      "text": "Comparison table of Short Course vs Full Course segments across 7 metrics.",
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      "kind": "title",
      "text": "Investors Need To \"GetSmarter\" About The Differences Between 2U's Short Course And Full Course Segments",
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