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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 table to show the trend of marketing costs and FCEs, with callout boxes emphasizing the reversal of cost efficiency.",
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      "kind": "callout",
      "text": "This is the first time in 2U's public history where the costs to generate an FCE are rising. This is evidence of increased competition to advertise online. Unlike typical SaaS companies, which experience scalability and operating leverage, 2U appears to be facing challenges in scaling",
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      "kind": "callout",
      "text": "Early cost leverage from 2013-2015 is now completely gone by 2017",
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      "kind": "callout",
      "text": "This is the first time in 2U’s public history where the costs to generate an FCE are rising. This is evidence of increased competition to advertise online.",
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      "text": "Costs / FCE: 4%",
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      "kind": "paragraph",
      "text": "3rd party marketing costs (paid search, display and email marketing) to generate a Full Course Equivalent (FCE) are rising as competitive intensity to recruit students rises. We are now seeing signs of deleveraging in 2U's results. To illustrate, 2017 was the first year where costs per FCE rose after a multi-year period of decline.",
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      "text": "Source: Company Filings and Spruce Point Estimates (1) 3rd Party Lead Generation Costs were estimated using disclosure from the MD&A (2) 3rd Party Lead Generation Costs / Next Year's FCEs",
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      "text": "Program and Marketing Costs Analysis ($ in millions except Costs / FCE)",
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      "kind": "title",
      "text": "Evidence of Marketing Costs Rising",
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