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  "documentTitle": "2U, Inc. (TWOU)",
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  "presentationDate": "2018-07-19 00:00:00",
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  "notes": "Includes specific callouts highlighting the discrepancy between management's stated cash outflow expectations and the actual NPV calculations.",
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      "kind": "callout",
      "text": "To arrive at our NPV per future program, we assume the midpoint of $7.5M ($5M to $10M) of negative cash outflow prior to a program starting and up until completion of its second year",
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      "text": "NPV of New Program: $12.7",
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      "kind": "paragraph",
      "text": "We have interpreted quotes from 2U's transcripts to derive the steady state and NPV of an incremental new program assuming it reaches 2U's steady state revenues and margin profile.",
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      "kind": "quote",
      "text": "Oppenheimer Conference 8/10/15: So for our first program, our cumulative net negative cash investment is typically in the range of $10 million... launching a second, third or fourth program in the vertical however, our cumulative net negative cash investment usually falls by about half, more in the range of $5 million. . . the roughly $5 million to $10 million in cumulative net negative cash flow we refer to, is not an upfront investment with additional negative cash flows expected. It is the total cash investment we expect to make to get a program to breakeven.",
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      "kind": "quote",
      "text": "2017 Investor Day – 10/05/17: It takes five years to six years for a first program in a vertical to steady state... it is our expectation that an average 2U program will generate $16 million in top line revenue and generate mid-30s adjusted EBITDA margins.",
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      "text": "\"It takes five years to six years for a first program in a vertical to steady state, to get to that sort of natural peak of annual enrollment. It takes four-ish years for those programs to breakeven. But as they steady state, it is our expectation that an average 2U program will generate $16 million in top line revenue and generate mid-30s adjusted EBITDA margins.\" — 2017 Investor Day - 10/05/17; \"So for our first program, our cumulative net negative cash investment is typically in the range of $10 million before we get to adjusted EBITDA and cash flow breakeven. . .launching a second, third or fourth program in the vertical however, our cumulative net negative cash investment usually falls by about half, more in the range of $5 million. . . the roughly $5 million to $10 million in cumulative net negative cash flow we refer to, is not an upfront investment with additional negative cash flows expected. It is the total cash investment we expect to make to a program breakeven.\" — Oppenheimer Conference 8/10/15",
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      "kind": "source-note",
      "text": "Source: Company Filings and Spruce Point Estimates. Discount rate of 11.7% is based on Bloomberg's WACC function",
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      "text": "Spruce Point Interpretation of Steady State Expectations per Program",
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      "kind": "title",
      "text": "The Fallacy of Steady State Revenues: 2U's Guidance",
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