George Tong: Got it. That’s helpful. The launch cadence for 2023, 2024 definitely is useful from a modeling perspective. As you think about a number of programs coming up for renewal, when do you expect the next big wave to hit and based on conversations you’ve been having with your partners, is there any intention to shift along the spectrum of flex versus full degree offerings?
Chip Paucek: In general, no, because if a program is today launched and it’s a program that we intend to renew, typically, that means that it had the benefit of larger marketing that comes with the full program model, and therefore, it’s at scale. And without that marketing, it will be more challenging to keep that program at a higher enrollment level. What you will see is we went through a period, George, it €“ and I know you’ve been with us for a while, but for those investors that weren’t, we went through a period where we had signed a lot of exclusive deals in our early history where we had offered exclusivity in various disciplines. And we figured out over time that we shouldn’t have done that and that we needed to offer more programs in verticals because programs had greater geographic boundaries to them, even though you were online.
That was not immediately obvious in the early days. So by signing exclusives, we had to go early into the contracts. So the 2U side, had to go to our clients and try to reopen the agreements to eliminate exclusivity. And in doing so, we came up with a model that worked quite well across our portfolio, and there were mild variations, but we would give schools small single-digit relief in the rev share in order to be able to go to a less exclusive or, in some cases, a non-exclusive basis. The reason I go there is that we’re generally through that. We have a limited amount of it that still exists. But for the most part, what you’re going to see now is a much more sort of routine renewal and we actually just signed one that we have not yet announced.
We sort of like under the wire here. So that we will be able to get detail on shortly to everybody that looks €“ I think, looks much more like what you’re going to see. And in that case, it’s candidly just extending the program because the client is really happy with really no change. And so we will get greater detail on that shortly. We thought we might have it for this call, but we didn’t quite make it in time to put a proper release on it. So the other thing I think you’ll see rather than people transitioning from full to flex. And I’m not saying that it’s not possible that there is one or two of those at some point. But you’ll see more and more current partners wanting to launch new programs, in some cases, full, in some cases, flex. Back in the day when we only had the full model, we did not have an opportunity to work with every school at the university because in many cases, the university either didn’t want to scale a particular school €“ school-by-school decisions matter.
And so if the faculty at a particular school didn’t want to scale, we really didn’t have anything for them. Now we do. Or other cases where that particular brand may be mixed with that particular geography and discipline didn’t allow us to scale a program. What’s great about flex is it works for all of that. So it really just allows us to aggregate more overall degree demand on our platform. So we think it sets up a quite positive out years with regard to degree.
George Tong: Got it. Very helpful. Thank you.
