Coursera, Inc.
Q2 2021 Earnings Call Transcript

Published: 4 Aug 2021

[Operator:]

Ladies and gentlemen, thank you for standing by and welcome to Coursera’s Second Quarter Fiscal Year 2021 Earnings Call. I’d like to turn the call over to Cam Carey, Head of Investor Relations. Mr. Carey, you may begin.

[Cam Carey:]

Hi, everyone and thank you for joining our Q2 earnings conference call. With me today is Jeff Maggioncalda, Coursera’s Chief Executive Officer and Ken Hahn, our Chief Financial Officer. Following their prepared remarks, we will open the call for your questions. Our press release, including financial tables was issued after market close and is posted on our Investor Relations website where this call is being simultaneously webcast. Additionally, downloadable versions of our prepared remarks and supplemental slides have also been made available. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP measures to the most directly comparable GAAP measure can be found in today’s press release and supplemental presentation, which are distributed and available to the public through our Investor Relations website located at investor.coursera.com. Please note that all growth percentages refer to year-over-year change unless otherwise specified. Additionally, I’d like to remind you that all statements made during this call that relate to future results and events are forward-looking statements based on current expectations. Actual results and events could differ materially from those projected due to a number of risks and uncertainties, which are discussed in our press release, SEC filings and supplemental materials. These forward-looking statements are not guarantees of future performance or plans and therefore, investors should not place undue reliance on them. We assume no obligation to update our forward-looking statements. And with that, I would like to turn it over to Jeff.

[Jeff Maggioncalda:]

Thanks, Cam and good afternoon everyone. We appreciate you joining today’s call. Coursera’s number one goal has been and always will be to serve learners. Working closely with our educator partners, we are working towards a world where anyone anywhere has the power to transform their life through learning. A year ago at this time, our platform served a critical role during one of the most challenging moments of the pandemic, as schools and offices closed and learning and work shifted online both individuals and institutions turned to platforms like Coursera. And today, I am really excited to talk about unlocking the next phase of opportunity, the transformation of higher education and adult learning more broadly. For our Q2 results, I am pleased to report another strong quarter. We grew quarterly revenue 38% year-on-year to $102.1 million, crossing the $100 million mark for the first time. Performance was strong across the business with sustained momentum in each of our segments

[Ken Hahn:]

Thanks, Jeff and good afternoon everyone. We are pleased to report strong results in our June quarter. In Q2, we generated total revenue of $102.1 million, which was up 38% from a year ago on consistent strength across all 3 of our business segments. This growth was on top of the 61% year-over-year growth delivered in the year ago quarter, which was our first full quarter impact from the COVID-19 pandemic. So we grew quite well over a tough comp. As Jeff mentioned, we have witnessed a global trend of learners, educators and institutions looking to Coursera to provide the job relevant skills required to compete in a post-pandemic digital economy. And given our broad catalog of world-class branded content and credentials, we’re able to meet their needs whatever the stage of their learning journey. Please note that for the remainder of the call, I will discuss key operational metrics as well as non-GAAP financial metrics, excluding pro forma adjustments, unless otherwise noted. These non-GAAP adjustments remove only stock-based compensation and related payroll tax, nothing else. Gross profit was $61.8 million, up 60% from a year ago and 60.6% of revenue that is gross margin and that gross margin percentage was approximately 810 basis points higher than the year ago quarter. As a reminder, there are two components of our cost of services. The first is our content costs, which varies based on the revenue mix amongst our three businesses as well as the content margin rate within each segment. For example, our higher-margin Enterprise & Degree segment accounted for 39% of our overall revenue mix in Q2 compared to 32% in the prior year period. This long-term mix shift is key to our structurally expanding margins over time. Additionally, we see changes in the segment content margin rates which continued to be a positive variance in the second quarter, particularly for our consumer business. Our consumer segment content margin rate increased from 54% in the prior year to 66% this quarter as learners consumed a larger proportion of content with lower-than-average content costs. The second component of our cost of services is our non-content costs, margins for which were roughly flat on a year-over-year basis at 9.6% of total revenue. Before moving to operating expenses, I’d like to remind you from our last call that we expected a large stock-based compensation charge associated with restricted stock units, for which amortization began with the completion of our IPO. This is typical for companies that make the IPO an RSU-vesting-trigger, which is the now-common practice due to employee tax considerations. As previously mentioned, the non-GAAP income statement measures that follow exclude stock-based compensation and related payroll tax, but I didn’t want to gloss over that GAAP expense. Total operating expense was $68.2 million or 67% of revenue compared to 66% in Q2 of last year. Sales and marketing expense represented 32% of total revenue, slightly down from a prior 33%. We continue to expect our overall sales and marketing spend in 2021 to represent a similar percentage of total revenue as in full year 2020. Research and development expense was 22% of revenue in line with the year ago period. We expect our overall R&D expense in 2021 to represent a similar percentage of revenue as this quarter. General and administrative expenses, was 13% of revenue versus 11% in the prior year, given incremental costs associated with being a public company. We expect this higher expense as a percentage of revenue to continue throughout 2021. Net loss was $6.9 million or 6.8% of revenue, and our adjusted EBITDA loss was $2.9 million or 2.8% of revenue. This is a very strong quarter for EBITDA margin, but importantly, I want to remind you of our consistent messaging on this metric and how we’re managing the business. In a brief time as a public company and consistent with our operating framework before the IPO, we plan to deliver annual EBITDA margin improvement over the long-term. As you’ll hear shortly in our outlook discussion, we continue to see 2021 as an investment year and our forward EBITDA guidance reflects this focus. We intend to invest our strong performance this quarter over the remainder of the year to

[Jeff Maggioncalda:]

Thanks, Ken. As a public benefit corporation, we have a legal duty to balance shareholder needs with the needs of society more broadly. And at Coursera, we embrace this responsibility wholeheartedly. So before we open the call for questions, I want to share one of the most encouraging insights coming out of our Coursera Global Skills report. The dual impact of the pandemic and automation have disproportionately impacted women. Globally, women are more affected by job losses than then and the total employment loss for women stands at 5% in 2020 versus 3.9% for men. And in the U.S., despite an exodus of women from the labor market amidst the pandemic, there was also a sign of hope.

[STEM:]

And with that, let’s get to Q&A. Could you please introduce the first question? Thanks.

[Operator:]

Thank you. Our first question coming from the line of Stephen Sheldon with William Blair. Your line is open.

[Stephen Sheldon:]

Thanks for taking my question. Really impressive results here. One of the financial metrics that really stands out this quarter is the gross margin in the Consumer segment. I believe this is the first time it surpassed 60% in a blue path that level. So you talked about some, but how should we think about the factors driving that between the source of content being consumed with I assume a benefit from more corporate versus university content being utilized and the impact of the subscription plans. Just any detail there and the potential sustainability of consumer gross margins at this level as we think about the next few years?

[Jeff Maggioncalda:]

Great. Thanks, Stephen. Yes, this is Jeff. So yes, we definitely saw some strong performance in consumer, especially with the segment margin there. And as Ken said, it’s basically a lower content cost on some of the content and that content mostly at the Professional Certificates from industry partners, has had a disproportional uptake as people, some people calling us the great resignation. A lot of people thinking about switching careers and thinking about how do I get myself into a new digital career. It turns out that a lot of the content that our industry partners have been putting on is really relevant to those jobs – the career switches who maybe don’t have a college degree. And often, the industry partners for various reasons, have decided that the content cost would be a little bit lower. So it’s mostly a mix shift associated with the educator partners. In terms of the persistence, it’s really kind of hard to say. It depends on how many people are coming, consuming the content and from which educate a part of the content is created. We’re – at this point, when we think about our planning internally, we are not going to build in the persistent effect of this margin expansion that we see in consumer. But at the same time, if the factors that have driven Q2 continue to persist in terms of people looking for this kind of content and consuming this content the way they have been, there is no reason that it should not persist, but we’re not kind of counting that. It’s pretty early days and frankly, this was not something that we were anticipating in Q1. So we will just here to see how this plays out.

[Stephen Sheldon:]

Got it. Makes sense. As a follow-up, it seems like you have more flexibility to strategically reinvest than you had originally planned and there is been the strong traction we’re seeing across businesses. So curious if you can give any more detail about where you might be ramping investments more than you had assumed when you last provided guidance?

[Jeff Maggioncalda:]

Yes. I mean this on a story as the CEO is just you really want to be thinking about

[Stephen Sheldon:]

Great. Thank you and congrats on the results.

[Jeff Maggioncalda:]

Yes. Thanks, Stephen. Appreciate it.

[Ken Hahn:]

Thank you, Stephen.

[Operator:]

Our next question coming from the line of Tom Singlehurst with Citi. Your line is open.

[Tom Singlehurst:]

Good evening. Tom here from Citi. Thanks very much for taking my question. Maybe just on the consumer growth, I mean, obviously, a fabulous number both year-on-year and sequentially. I’m just wondering whether alongside the Professional Certificate impact that you highlighted, whether there was any sort of notable impact in international from ongoing lockdowns that might sort of give a sort of temporary benefit as consumers or loans is stuck at home with less to do. That was the first question. I’ve got a follow-up with that. Okay, thank you.

[Jeff Maggioncalda:]

Yes. So on that one, Tom, if you look at where the traffic is coming from and you look at the conversion rates and you, therefore, look at some of the revenue coming in it does not seem to be disproportionately associated with other countries going through successive ways of lockdown. And even as the U.S. is now looking at a successive wave, I mean the delta variant is obviously a bit different than the variance – the strength that we’re out earlier. We think that it is less of an international thing than it is kind of a digital job reskilling thing. And plus, part of it too is a growing portfolio. I mean the size of these Professional Certificate portfolios a year ago was, I don’t know, maybe 2 or 3. It’s now, I think, at 14, and we continue to get lots of interest from other industry partners wanting to build these entry-level on-ramps to new digital careers. But I would say it’s not really attributed to international.

[Tom Singlehurst:]

That’s very clear. And the second question actually linked to that is, I mean, historically, you’ve talked about roughly 1%, maybe slightly over of total learners sort of becoming paying users in any particular period. I’m just interested whether this is the super normal growth is a function of the number of paying users going up or just the amount paid by users going up, if that makes sense. So is the delta a bigger number of learners paying or just individual loan is paying a lot more.

[Jeff Maggioncalda:]

It’s a combination. I mean, as we grow this portfolio, I think there is something to meet more people’s needs. IBM has a cybersecurity analyst professional certificate into it, just put out a bookkeeping professional certificate Salesforce just put out a sales operations specialist certificate. So there is a growing, if you will, a growing number of career opportunities that you can skill for on the Coursera platform. I think that’s appealing to a wider audience. We have been seeing a bit more sort of higher conversion rates than historically into these. So there is a little bit of a conversion bump that we’re seeing. And as Ken mentioned, on the Coursera Plus, some of our retention numbers are looking pretty good, too. So it’s a combination of factor. And Ken, would you add anything to that answer?

[Ken Hahn:]

No, nothing to add. That was quite clear.

[Jeff Maggioncalda:]

It’s not a price increase. I’ll tell you that. It’s not that people are paying a higher price for what they are consuming.

[Ken Hahn:]

It’s not a price increase, and it is not a surge in international. It’s better conversion, as you stated.

[Tom Singlehurst:]

Well, listen, thank you very much and congratulations on the result. Appreciate it.

[Jeff Maggioncalda:]

Thank you.

[Ken Hahn:]

Thanks, Tom.

[Operator:]

We have our next question coming from the line of Rishi Jaluria with RBC. Your line is open.

[Rishi Jaluria:]

Thanks. This is Rishi Jaluria from RBC. Your line is open.

[Rishi Jaluria:]

Thanks. This is Rishi Jaluria from RBC. Let me only add to the impressive results that you put up Wanted to first maybe ask going back to the government opportunities that you highlighted some of the deals that you had both domestically and internationally. But longer term, how should we be thinking about the opportunity with governments, especially Federal and State and local here, given kind of the accelerated migration and adoption of digital transformation efforts with those? And then I have got a follow-up.

[Jeff Maggioncalda:]

Yes. I think that, Rishi, it’s kind of interesting. I think that the – our content catalog 2 years ago, 3 years ago, when we sold into Coursera for government, it didn’t have a lot of these entry-level Professional Certificates and don’t require a college degree. I mean it was mostly like advanced machine learning and much more advanced topics in data science, computer science, etcetera. So, I do think in the last 24 months, the relevance and attractiveness of the content to governments looking to get people employed in new careers has gone up, and that’s one of the factors. I think another thing that in the U.S., but this is also true internationally, government training programs have historically not been online. And it was I think it was largely the pandemic, a lot like universities who had to close their campus and were forced to go online. I think governments obviously could not do face-to-face trade and they were forced to go online. And so I think there is a little bit of a confluence saying government saying, hey, you know what, we can get more scale at lower cost if we do this online, which we have now tried because we were forced to. The relevance of the content is pretty high because these are digital jobs, and we are learning digital skills, and you could do that on a digital platform. But I would say that we are still in the early stages of adoption. So, a lot of governments tried this during 2020 when we did our workforce recovery initiative. It was a free version, of course, are for government. We are getting wins. I think there is a little bit of a difference. I mentioned the Coursera deal with Morocco, where the Ministry of Education did a deal for the universities in Morocco. So, it’s kind of a government university institutional collaboration. And what they are trying to do is up-level their entire higher Ed system, that will be pretty interesting because it plays to two of our big strengths in government and in campus. I think for governments up-skilling their own civil service workers, that will come along. And then for basically trying to get people reemployed. Again, I think this entry-level certificate portfolio that we are developing with these industry partners is looking attractive. So, I would say it’s kind of lumpy, its early days. We think we are pretty well positioned. And we think that the future will look a lot different than the past in terms of how governments go about this.

[Rishi Jaluria:]

Alright. Great. That’s helpful. Thanks. And then just any comments on changes in a competitive environment, especially with to use acquisition of edX, just how should we be thinking about that, especially given the – are also in a number of segments that you also play in? Thanks.

[Jeff Maggioncalda:]

Yes. The competitive environment, I guess, there is a few things that sort of in which region, for which products and where do we have the advantages. I also think that in the case of 2U and edX, both of those players were in the market. So, now they are one entity, before they were two different entities. But it’s not really the introduction of a new entrant. We are seeing a lot of new entrants. I think everybody kind of knows this, but the DCs are definitely funding a lot of EdTech around the world, in China, in India, in Latin America and the U.S., etcetera. So, I would say that the competitive environment is definitely reflecting the size of the opportunity. And I think I feel better about our competitive position now than I probably have in the last 4 years since I have been here. And we are feeling pretty good. And we do think kind of keep on saying the same things in the script about our competitive advantage. But we are a little single minded about this. We have built this three-sided model over the last 4 years. It’s all organic. We have been really integrating all these pieces so that benefit in one segment of our business will basically turn into an advantage in another segment. And those are starting to click pretty decently. So, I love the model. I think more people will be adopting our kind of a model. And we are pretty well ahead. And I think that we are – we have designed in a way that the pieces really to reinforce each other. So I am liking where we are right now.

[Rishi Jaluria:]

Alright. Wonderful. Thank you so much.

[Jeff Maggioncalda:]

Sure.

[Operator:]

We have our next question coming from the line of Josh Baer with Morgan Stanley. Your line is open.

[Josh Baer:]

Thanks for the question. A lot of focus on consumer, which is – definitely was a highlight in the quarter, but I want to ask one on degrees. I was hoping you could unpack what’s going on in that segment a little bit. Of the 31 degrees any context for how many are fully ramped? And if we look at the student growth, is there a way to break down that enrollment growth coming from new degrees, ramping degrees and – or like a same-store sales like enrollment looking at programs that were in place?

[Jeff Maggioncalda:]

Yes. Great. So, thanks for the question, Josh. I will take a first crack and then turn it over to Ken. So today, we have about 31 degrees that have been announced, 16 are live. Last quarter, 16 were live. A year ago, Q2 12 were live – 20 were announced, 12 were live. So, we have really been building up the pipeline and the announcements and these degrees are not kind of in production, but many of them are not yet live. So, to answer your question, a lot of this learner growth is coming from expansion of cohorts in existing programs, more so than new programs. And even in an existing program, some of it is an expansion of a given cohort. But over a, say, a 2-year program, you will actually have new cohorts starting for 2 years until it hits sort of a steady state. It is more that filling up cohorts and for a given degree program that’s already launched, it’s getting to sort of a steady-state maturity than it is new students coming into new programs. I mean, obviously, the difference between 31 announced and 16 live means that a lot of them are going to be going live. And then I think we will see more of a contribution from new degree programs. But that’s not really what’s being reflected in the degree revenue numbers right now. Ken, your thoughts on that?

[Ken Hahn:]

Yes. So, I agree generally, we haven’t, Josh, released that kind of data on what’s fully ramped and what’s contributing. It’s a small minority that’s fully ramped. So, in addition to take one step further what Jeff was saying, there is new ones that are signed have yet to be implemented. And then as you understand, based on your question, then you have to ramp all the cohorts until you get to a full 2-year degree, a full set of 2-year cohort. We have not disclosed that. The business is just too early. I do believe we are going to add additional color going forward, but we are going to wait until the business is a little bit bigger to start creating a lot of that detail. But it’s a bit more than a handful that are fully ramped. It’s very early for our degree business.

[Josh Baer:]

That’s very helpful, even just seeing all the different kind of vectors of growth within the existing programs. And just as a follow-up, just wondering if you are seeing any changes as far as your ability to source students from your registered learner base maybe with some of the different geographies becoming more back to normal related to COVID and wondering how that ability to find those students might change as you scale?

[Jeff Maggioncalda:]

Yes. I think it’s going to be a combination. I think on the one hand, as we develop the registered learner base while they are bigger pool deficient. At the same time, as we have a broader set of degrees, including some different regions, finding a good match between a given learner and a given degree will go up. So, I think the selection will facilitate acquisition of degree students. And at the same time, I think there will be continuing competition. I mean there are definitely more universities putting degrees online. There are other players. We really like our model a lot. If you look at the expected – or the percentage of sales and marketing going towards revenue, it’s down a bit on some good top line growth in Q2. But we are not seeing anything that suggests at this stage of the game that this model is going to lose the leverage that we have been seeing so far. So, we think about how many registered learners come from unpaid sources. We think about customer acquisition cost per degree student. We look at sales and marketing as a percentage of revenue. All indicators are feeling good. And we are feeling good about how the model is going so far.

[Josh Baer:]

Thank you.

[Operator:]

We have our next question coming from the line of Terry Tillman with Truist. Your line is open.

[Joe Meares:]

Hi guys. This is Joe Meares on for Terry. Thanks for taking the question. Could you please expand a little bit on that recent blog post you guys have on a North American transaction?

[Jeff Maggioncalda:]

Ken or Cam, you said North American transaction.

[Ken Hahn:]

Yes. Is this number of customers and the customers we announced in June?

[Joe Meares:]

I believe so, yes.

[Ken Hahn:]

Should pull it out.

[Joe Meares:]

If that’s the opening you are right now on the call, I could ask you one is fine.

[Jeff Maggioncalda:]

Cam or Ken, don’t you try to get that back and then I will take another question.

[Ken Hahn:]

Yes.

[Joe Meares:]

I just had a follow-up on the Degrees business, is there anything delving on around like seasonality in the June quarter. I think it was down slightly quarter-over-quarter. Is there anything specific going on there or is that just kind of is it more of a lumpy business right now because it’s new?

[Jeff Maggioncalda:]

Yes. We definitely see a seasonality in terms of when students are enrolled in the program and when they are paying tuition. So, in the summer months, sometimes it lightens up a little bit. And so that’s probably what we are seeing.

[Joe Meares:]

Great. And then if I could just follow-up with a question about investing in the business. How should we think about investing for growth going forward versus operating leverage into the second half of ‘21 and beyond?

[Jeff Maggioncalda:]

Yes. So Ken, you touched on this a little bit, but you want to take a crack at that?

[Ken Hahn:]

Yes, sure. So, I guess to breakdown the numbers a little bit. If you look at the guidance we gave for the year in last earnings call, the midpoint of the range had a negative 13.1% EBITDA margin. And the new guidance, it’s a negative 10.1%. So, we are definitely dropping some of it to the bottom line. We are not in a hurry to get to profitability. We are not burning much cash. We think the opportunity is amazing, and we have a bunch of opportunity to invest into these moats into this competitive advantage that we think. Again, the more we do that, the better it’s going to be for all of our constituents, certainly, shareholders included but learners as well with our success. So – but with the outperformance, we can’t invest quickly enough quarter-to-quarter. So, we are seeing some additional leverage. It’s going to drop down. We have committed to increasing profitability on an annual basis from here on out. And so it’s going to come a little bit sooner because we have taken another 300 basis points of EBITDA margin this year for the full year. With everything else we are trying to invest as quickly as we can for growth for the future. Does that help?

[Joe Meares:]

It’s very helpful. Thanks so much, guys. Appreciate it.

[Jeff Maggioncalda:]

Sure.

[Operator:]

We have our next question coming from the line of Jason Celino with KeyBanc Capital. Your line is open.

[Jason Celino:]

Great. Thanks guys for taking my questions. First one, 105 net new enterprise customers quarter-over-quarter, new high watermark from a net adds perspective. It’s the second quarter in a row of acceleration for the Enterprise segment. How much of the strength is from maybe some of the sales investments that you made at the end of 2020 versus just the overall uptick in skilling trends?

[Jeff Maggioncalda:]

Yes, Jason, thanks for the question. I would – I think the number of paid customers is indicative, but certainly not perfectly reflective of what’s really going on. I wouldn’t put a ton of emphasis on that because some of those might be bigger deals. Some of those might be lower deals, smaller deals, etcetera. But clearly, the revenue growth has been pretty decent year-on-year. Enterprise is up 69% ‘21 – Q2 2021 versus last year. Now – so, where is that revenue growth coming from, it’s a combination. Clearly, we are ramping up our sales team around the world. And as they ramp up, they can go out to market and hit their quotas and all that stuff. We are also really trying to advance the platform and have products and services for businesses that are really skills oriented and for governments that have the right kind of portfolio and for campuses that include like academic integrity, and places and detection and sort of functionality that they need. I think it’s really a combination of a greater global appetite for online learning across all three types of institutions, a larger sales force selling it. And we continue to, I think, improve not only the product, but our ability to position the product. So, I feel like we are seeing pretty strong growth on a number of different dimensions, none of which really fully explains the story. But I feel like it’s pretty balanced. And I am kind of happy with that level of balance.

[Jason Celino:]

Great. And then you mentioned a few country examples, but where are we in terms of international localization efforts?

[Jeff Maggioncalda:]

Still fairly early days, the way that we are really approaching this is we have a global team because we want to have one platform. And when – obviously, when you – one of the new things that are localized, you want that to be a set of configurations, so that the code could support all the different localizations. So, we have created a global team, a dedicated centralized team that’s building localization capabilities. And we are working on those – sort of turning those things on in certain regions first. The first region that we are focused on is India. I mentioned in the script, we are doing a lot on payments, currency wallets, even what form of payment is a subscription, is it a lump sum, installment pay, etcetera. And I would say we are in pretty early stages, but it was a good investment for us to make anywhere. We think that we are just scratching the service of some pretty simple things that when you put different images and different copy, you show different content, show different prudentials, offer different prices in different currencies you can do a nice job bumping up conversion rates in different regions, so early days and looking pretty good.

[Jason Celino:]

Excellent. Thank you.

[Operator:]

We have our last question coming from the line of Ryan MacDonald with Needham. Your line is open.

[Ryan MacDonald:]

Hi. Thanks for taking my question. Congrats on amazing quarter. Jeff, you talked a bit earlier on the degrees business about sort of the number of announced degrees versus the 16 live today. As we think about the additional 15 there, can you talk to the cadence or the expected cadence of those going live? Are the majority of these expected to hit sort of in the fall semester here versus 2022? And then as a follow-up to that, how is the pipeline of online degree programs looking right now as you think about out to 2022? What are you seeing in terms of mix versus grad versus under-grad or domestic versus international? Thanks.

[Jeff Maggioncalda:]

Good. Alright. Let me see if I can give you a high-level helpful answer to that. So, in terms of the kind of overall pipeline of when does an interesting opportunity turn into cohorts of student paying revenues, I would say that overall, at the top of the funnel, we see continued international interest in universities wanting to move things online. And not that people are focused on shutting them their campuses, but I think they are just realizing. Not only is there a risk to not having online because of the pandemic. The capacity is much greater. The cost can be much lower and you can appeal to working professionals. And so there is a whole audience that aren’t the younger people that can come to campus that you can tap into. I think a lot of the pandemic has forced universities to go online, and now they are kind of realizing, wow, there is kind of a lot of benefits if we do this. So, we do continue to see really nice broad interest in online is kind of a permanent feature of higher education. And then in terms of how quickly and where might they sign, we continue to build up our team to do that. We feel good about that. So, we think that’s going to bode well for the out years. And then among those that were announced, which you can see because we announced and so that’s public information. And then the ones that are live, you can see those because they are on our website, which is why I am okay saying we have 31 announced and 16 live. Many of those we did announce quite some time ago. We had 20 announced in Q2. So, that’s about a year. And that’s a time, although there was a pandemic in there, time to build up those degrees. So, we do expect, generally speaking, a number of degrees to be going live and then that will produce not a lot of revenue this year. But in 2022 and 2023 as those cohorts start filling up, we think that, that will serve us well. So, we definitely expect a reasonable amount of growth to be existing in our current announced, but not live degrees.

[Ryan MacDonald:]

Excellent. I will stop with the four part one question.

[Jeff Maggioncalda:]

I got the three of them at least are in.

[Cam Carey:]

That wraps the Q&A today. A replay of this webcast will be available on our Investor Relations website, along with a transcript in the next 24 hours. We appreciate you joining us. Thanks.

[Operator:]

This concludes today’s conference call. Thank you for participating. You may now disconnect.