Zovio Inc.

Good day and thank you for standing by. Welcome to the Zovio Q1 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would like to hand the conference over to your speaker today, Ms. Alana Vitechi. Thank you. Please go ahead.

Thank you and good afternoon. Zobio's first quarter 2021 earnings release was issued earlier today and is posted on the company's website at www.zobio.com. Joining me on the call today are George Pernsteiner, Interim CEO, Office of the CEO and Board Chair, Chris Bond, Executive Vice President of Operations and Office of the CEO, and Kevin Royal, Executive Vice President, Chief Financial Officer. We would like to remind you that some of the statements we make today may be considered forward-looking, including statements regarding university partners and other programs and services, our ability to grow through acquisition, our ability to successfully integrate and leverage acquired companies, future revenue growth, EBITDA, financial and related guidance, and commentary regarding fiscal year 2021 and later. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Please note that these forward-looking statements speak only as of the date of this presentation and we undertake no obligation to update these forward-looking statements in light of new information or future events, except to the extent required by applicable securities laws. On the call today, we will also discuss certain non-GAAP financial measures. In our earnings release, you will find additional disclosures regarding these measures, including reconciliations of these measures with US GAAP. Note that these non-GAAP financial measures are intended to supplement GAAP financial information and should not be considered a substitute for our GAAP results. Please refer to our SEC filings, including our annual report on Form 10-K for the year ended December 31st, 2020, as well as our quarterly report on Form 10-Q for the quarter ended March 31st, 2021, which we filed with the SEC earlier today, for a more detailed description of the risk factors that may affect our results. You may obtain copies from the SEC or by visiting the investor relations section of our website. At this time, it is my pleasure to introduce our interim CEO, George Pernsteiner.

Thank you, Alana, and welcome to our first quarter 2021 earnings call. As you likely saw in late March, we announced a leadership transition at Zovio. The company is entering a new era and the board felt this presented an opportunity to make a shift at the CEO level. Andrew Clark had founded Zovio and been with the company for almost 18 years. During his tenure, he developed a solid foundation for Zovio to transform from operating a single university into an education technology services company serving many clients and all of their students. We are excited for what the future holds for Zovio and our ability to play an important role in enabling learners to advance their educational goals. To that end, the Board of Directors has established a search committee to find our next CEO. The committee is comprised of three directors, led by John Kiley, our Audit Committee Chair and a former partner at PwC. We have retained the search firm Russell Reynolds Associates to facilitate the process and have launched a comprehensive national search that will consider both internal and external candidates. We are confident the search will yield a leader with the right blend of vision and operational expertise to advance Zovio's strategy and deliver shareholder value for many years to come. In the interim, we have established the office of the CEO, which I lead. and includes Chris Spahn, who will be speaking with you in a few minutes, and Diane Thompson, our general counsel. As interim CEO, my primary focus will be on strategy, finance, and university partnerships, including the very important one with the University of Arizona Global Campus, or UAGC. Chris will be responsible for overseeing operations and client-facing services, While Diane will continue to lead the legal and compliance department, as well as overseeing other corporate functions. We believe this structure will enable a seamless leadership and operational transition, allowing us to continue to execute on our strategic priorities. In addition to our CEO transition in late March, we announced the appointment of two new directors, which will enhance our board leadership and expertise. as well as increasing the overall diversity of our directors. It is my pleasure to welcome Dr. John Wilson, the former Morehouse College president who serves as a visiting scholar at the Harvard Business School, and Ron Huberman, chief executive officer of Benchmark Analytics and who formerly was the leader of Chicago's public schools. Both John and Ron bring significant higher education, government policy, business, and human capital management experience to the Zovio board. And this all in addition to their long-standing commitments to diversity, equity, and access to education. For those of you whom I have not had the pleasure of meeting yet, let me extend and give you a quick overview of my background. I have served as a director on Zovio's board since August 2017 and currently serve as chair of that board. Higher education is where I've spent most of my career. I served as Chancellor of the Oregon University System from 2004 through 2013, and more recently as the President of the State Higher Education Executive Officers Association, which represents chancellors and commissioners of higher education institutions from every state. As a result, I have considerable knowledge of the opportunities and challenges we face as the education landscape rapidly evolves something that matters as we further expand our university partnerships and enhance our relationship with UAGC. When I had the opportunity to join Zovio's board, I was excited. I was excited to become a part of an organization that was well positioned to become a leader in the future of higher education, bringing technology and innovative services to help learners succeed. Zovio has a great future. We are in the process of developing, a strong partnership with UAGC, which will provide a solid footing to launch additional services to more universities. In fact, we have already signed an agreement with a new partner, something Chris will discuss in more detail shortly, and we are in discussions with several other institutions. Furthermore, our Zovio growth segment has been a significant contributor to growth. Through Fullstack and TutorMe, we are delivering high-quality services that are in great demand in the marketplace. That being said, we have experienced lower enrollment for UAGC in the first quarter of 2021 than we had anticipated. Chris and Kevin will discuss this in much more detail momentarily. However, given this lower enrollment, as well as our desire to better position the company, both internally and externally, as an education technology services company, rather than an owner of one institution. Since March, we have taken decisive actions to realign our operations. This included working to break down silos internally and to increase collaboration across the team. In addition, this morning, we communicated broad-based cost reductions that will deliver annualized savings of about $40 million. The cost reductions were largely focused on administrative and non-students facing functions in order to enhance efficiencies, while at the same time, maintaining the resources necessary to drive and serve enrollment for our university partners. We also remain focused on realizing the full benefit of our robust offering, including Fullstack, TutorMe, and our university partner group, services to ensure our team is aligned around a common goal to be a world-class education technology services company. As I said before, I look forward to listening to and speaking with many of you throughout this transition period. With that, let me turn the call over to Chris to run through the highlights of the quarter.

Thank you, George. Let me begin by introducing myself. After having been away from the company for a number of years, I rejoined Zobio in early 2020, and I've been tasked with providing strategic leadership and direction for student engagement, student success, financial services, and Zobio employer services. I have over 20 years of experience in online higher education and technology service industries. Most recently, I was the president of Rocky Mountain College of Art and Design, where I led a total reengineering of all operations related to the university. I am pleased to be serving in the office of the CEO and believe we are all well positioned to execute on our strategic priorities as we work through this transition period. Turning to our results for the first quarter of 2021, we delivered revenue and other revenue of 76.9 million and incurred a net loss of 9.5 million or a loss of 29 cents per diluted share. Excluding non-GAAP items, our non-GAAP net loss for the first quarter of 2021 was $3.3 million, or a loss of $0.10 per diluted share. Our Zobio growth segment continues to generate momentum, delivering strong and top-line growth, new university partnership acquisitions, and better-than-anticipated enrollment. For our University Partners Group, or UPG, we have made early progress. With regard to UAGC, while we are in the early stages of this new relationship, we have made great strides in getting our services up and running. Beyond UAGC, as Georgia mentioned, we signed our first new partnership for UPG, and I will discuss both in more detail in just a moment. As the team has discussed before, the way learners access education has been changing rapidly and was only accelerated by the COVID-19 pandemic. Universities are adding and enhancing their online programs to meet learners where they are. Further, expanding educational opportunities for the underrepresented students, and non-traditional students who work or parent full-time is driving structural changes in the education landscape. Educators are looking for strong partners that have demonstrated a track record supporting the student life cycle and delivering strong student outcomes, and Zovio is that partner. We continue to make strategic investments in our growth engines, Fullstack and TutorMe, while at the same time enhancing our robust and flexible offerings for university partners in UPG. These efforts are creating value today, and we believe they position us well to drive further value over the long term. With a differentiated and flexible value proposition that spans the student life cycle, we are meeting the growing needs of our current and future partners, both at the undergraduate and graduate level. especially in engaging working adults. Now, turning to our Xovio Growth segment, which includes our subsidiaries, Fullstack and TutorMe, it continued to perform exceptionally well. In the first quarter of 2021, Xovio Growth delivered revenues of $7.2 million, growing 79.2% year-over-year. Today, we serve more than 200 institutional customers covering 44 states. in the Xovio ecosystem. The services that Fullstack and TutorMe provide enhance Xovio's ecosystem to support learners' education and career aspirations by building on our existing capabilities to meaningfully serve higher education institutions, bridge the education to employment gap, and help enterprises upskill and educate their employees. We have the opportunity to be a premier player in a large, evolving, and growing industry. And Soviet growth is a critical piece of that strategy. Our track record of innovation will allow us to offer services to our university partners that span the student journey and support the best possible outcomes. With that in mind, TutorMe continues to execute new partnership agreements during the quarter. from universities to corporations to school districts. TutorMe continued to add new partners during the first quarter of 2021, bringing the total to 225, an increase of nearly 200% year over year. As we continue to see robust demand for online tutoring services, in the first quarter, total customer and partner hour usage increased over 250% year over year. continuing the strong momentum we saw in 2020. During the first quarter, Fullstack also added new partners and continued to leverage new partnerships that came online in the prior year. In March, Fullstack signed an agreement with a well-known West Coast university, and we are really excited about the prospects this deal has to offer. As of March 31st, Fullstack is now up to 13 new partnerships since our acquisition of the business in April of 2019. Our outlook for Zovia growth remains strong. For the full 2021, we anticipate Fullstack adding in total between 7 and 10 new university partners and TutorMe adding in a total between 50 and 60 new partners. We will continue to invest for growth in this segment, including strategic sales and marketing initiatives to bring our new partners online, while at the same time maintaining our momentum with new partner acquisition. Turning to University Partners Group. As I mentioned, we've made strides in bringing our support services online for UAGC, and that relationship continues to develop. That said, after a strong start in December 2020, from a new and total enrollment perspective, we, like many other higher education institutions, have faced enrollment headwinds driven by the impact of the COVID pandemic. In addition, we are assisting our partner university with building a new brand, which has presented its own unique challenges. and adversely impacted new and total enrollment in the first quarter. First, the geographic mix of students shifted, which has changed the competitive landscape and, as a result, highlighted the need to refine our value proposition. Second, Asher University had a great brand recognition with the military. That has not transferred to UAGC as we originally had expected. And third, the organic traffic to the website we experienced in December did not continue in the first quarter. Once we identified some of these roadblocks, we moved quickly to enhance the training of our enrollment counselors to better position UAGC's value proposition. In addition, we have made adjustments to our marketing efforts, including placement, content, and value proposition. With these changes, we have started to see some stabilization over the last several weeks. While we believe we are on the right path, the headwinds we experienced in the first quarter will likely continue to a lesser extent and impact our full-year outlook, which Kevin will discuss shortly. In terms of our new partnership, we have signed an agreement with a mid-size university. This is a more narrow engagement as compared to a relationship with UAGC. Initially, we will focus on enhancing their student response center as well as supporting their enrollment services. This new partner clearly sees the value that Zobio is able to bring as it strives to achieve its objectives, and we look forward to building a long-lasting relationship. Zobio remains well-positioned, as we bring a clearly differentiated offering to our clients. We have a robust platform of technology and services that institutions, corporations, and learners clearly value that will set the stage for diversified growth. First, we provide an end-to-end solution that spans the entire student life cycle, marketing and enrollment to retention and course development tools. Second, our offerings are tailored and flexible and can be unbundled or bundled enterprise solutions. Third, we are aligned to operate at scale to support our clients' rapid growth initiatives and objectives. Additionally, all of our solutions are powered by Signals, our proprietary predictive analytics platform. In addition to our recently signed partners, We continue to build an attractive pipeline of opportunities with institutions, as many are seeing the opportunity to enhance student engagement and prove the likelihood of student success through our services. As a result, we remain very confident in our ability to add, in total, one to three deals in UPG during 2021. Now, I'll turn the call over to Kevin Royal to review our financials and operating results.

Thank you, Chris. Before I begin, as a reminder, our business model period over period has shifted significantly as a result of our transition to an education technology services company with the divestiture of Ashford University. As such, for comparability purposes, in addition to providing the gap results for the first quarter of 2020, I will be highlighting certain related pro forma amounts. Revenue and other revenue for the first quarter of 2021 was 76.9 million, compared to 97.9 million for the same period in the prior year. On a pro forma basis, revenues for the first quarter of 2020 were estimated to be 75.9 million. The decrease on a GAAP basis is primarily related to the divestiture of Ashford University and the shift to an ed tech business model partially offset by an increase in the growth segment revenues. For the first quarter of 2021, technology and academic services were 19.1 million or 24.9% of revenue compared to $18.5 million or 18.9% of revenue for the first quarter of the prior year. On a pro forma basis, the technology and academic services for the first quarter of 2020 were estimated to be $17.3 million or 22.8% of revenue. The cost on a GAAP basis as a percentage of revenue increased year over year and was primarily driven by increased labor costs and license fees, partially offset by decreases in outside services and facilities costs. Counseling services and support for the first quarter of 2021 were $25.3 million or 32.9% of revenue compared to $23.3 million or 23.8% of revenue for the comparable prior period. On a pro forma basis, counseling services and support for the first quarter of 2020 were estimated to be $22.4 million or 29.6% of revenue. These costs on a gap basis as a percentage of revenue increased primarily due to employee costs, partially offset by a decrease in facilities costs. Marketing and communication expenses for the first quarter of 2021 were $25.8 million or 33.6% of revenue compared to $25.1 million or 25.6% of revenue for the prior year. On a pro forma basis, marketing and communication expenses for the first quarter of 2020 were estimated to be $24.9 million or 32.9% of revenue. These costs on a GAAP basis as a percentage of revenue increased due to advertising costs and increased employee costs. General and administrative expenses for the first quarter of 2021 were 15.9 million or 20.8% of revenue compared to 13.4 million or 13.7% of revenue for the comparable prior period. On a pro forma basis, general and administrative expenses for the first quarter of 2020 were estimated to be $10 million, or 13.1% of revenue. These expenses on a GAAP basis as a percentage of revenue increased due to the severance costs of $4.6 million for our recent leadership change, increased employee costs, and other administrative costs. We did not have any university-related expenses for the first quarter of 2021 as compared to $25.3 million or 25.9% of revenue for the prior period. On a pro forma basis, These costs would not have existed in the prior year. These expenses on a GAAP basis represent costs related to the university prior to the sale in December 2020. We did not have any restructuring and impairment charges for the first quarter of 2021 as compared to 2.8 million or 2.8% of revenue for the prior period. During the first quarter of 2021, we recorded an income tax expense of 0.1 million. Our effective tax rate before discrete items for the first quarter of 2021 was low single digits, and we anticipate this trend to continue for the remainder of the year. As a result, net loss for the first quarter of 2021 was 9.5 million, or net loss of 29 cents per diluted share. This is compared to net income of $2 million or net income of $0.06 per diluted share for the first quarter of the prior year. Our non-GAAP net loss for the first quarter of 2021 was $3.3 million or a loss of $0.10 per diluted share compared to the non-GAAP net loss of $3.2 million or loss of $0.10 per diluted share for the first quarter of the prior year. The non-GAAP net loss for the first quarter of 2021 excludes separation and conversion costs of $0.8 million, acquisition costs of $0.8 million, and severance costs of $4.6 million for the recent leadership transition. As of March 31, 2021, we had combined unrestricted cash and cash equivalents of $35.1 million compared to $35.5 million as of December 31, 2020. In addition, we had restricted cash of $20 million at both March 31, 2021 and December 31, 2020, respectively. As we fully transition to an education technology services company, the requirements that had previously restricted the majority of these funds will no longer be relevant. We expect that approximately $8 million of the restricted cash amount will become unrestricted during 2021 and will move to unrestricted cash and cash equivalents. We generated $0.8 million of cash from operating activities during the year-to-date period ended March 31, 2021. By comparison, we used $6.2 million of cash in operating activities during the same period in the prior year. The year-over-year change in the cash provided by operating activities was primarily driven by the changes in the working capital accounts partially offset by the decrease in earnings. The net accounts receivable was $6.8 million as of March 31, 2021, compared to $7.2 million as of December 31, 2020. The decreased balance is consistent with our business cycles. Capital expenditures for the year-to-date period ended March 31, 2021, were $0.2 million, as compared to $1.2 million for the same period last year. Turning to our outlook for 2021, for Zovio Growth, From a revenue perspective, we still anticipate the segment's revenue to grow approximately 30% year-over-year and anticipate generating an EBITDA loss of between 6 to 8 million. This planned investment will decrease consolidated EBITDA margins in the near term. Longer term, we expect this segment to grow 30-plus percent through 2025 and be profitable beginning in 2023. On a consolidated basis, as Chris alluded to, many higher education institutions have already announced reduced guidance due to headwinds in student recruitment as the economy begins to emerge from the effects of the COVID-19 pandemic. And Zovia has experienced these headwinds. as well as the more specific issues with launching a new online brand for UHEC. As a result, for 2021, we now expect total Zovio revenues to be in the range of $265 million to $275 million and non-GAAP EBITDA to be breakeven to a slight loss. We recognize this is a substantial reduction in our anticipated revenues for 2021. And as George mentioned, we have taken proactive and deliberate actions to reduce our cost structure to more appropriately align it with our revised revenue expectations. To that end, as of today, we have identified and implemented approximately $40 million of annualized cost reductions. For 2021, we expect to realize $30 million of savings due to some savings in 2021 that will not reoccur in 2022. While these cost actions were broad-based across the organization to drive overall efficiencies, they were centered primarily on administrative, non-student facing functions to ensure we are able to maintain the necessary resources to support enrollment for our university partners. We know these revised expectations are disappointing, but believe we are making the necessary changes to support the long-term opportunity ahead of Zovio in Full Stack, TutorMe, and our university partner group, in addition to enhancing engagement with all of our stakeholders. At this time, I will ask our operator to open the phone lines for your questions.

As a reminder, if you ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. We will pause for a moment to compile the Q&A roster. Your first question comes from Alex Perrins from Barrington Research.

Hi, guys. Thanks for taking my question today. I wanted to dive first into, obviously, guidance and your cost reduction initiatives, just to make sure I have that clear. So total ZOVO revenues of $270 million at the midpoint, down from your previous guidance of $310 million, a $40 million reduction, and adjusted EBITDA of break-even versus our previous expectation of mid-single-digit margin. Can you... Is this cost reduction what you're, that you allude to in the 10-Q also, 65 employees expected to be completed by June 30th? Is that what we're talking about?

Yes, Alex, that's correct.

Okay. So that's expected to yield $40 million in cost savings, and there'll be a $2.3 million charge in the second quarter. Are there any other charges or expenses associated with that reduction in force?

There are no other charges currently contemplated associated with the reduction. Just to clarify, the reductions that we'll experience in calendar 2021 are about $31 million. When you take items that won't recur in 2022, but then you annualize a portion of those cost reductions, a portion of that $31 million, in 2022, the cost reductions will be $40 million, if that makes sense.

Okay. Just so I understand it, you will reap $31 million in cost savings in 2021, and then you'll have the full $40 million savings, so a pickup of about $9 million in savings year over year in 22 versus 21.

That's correct.

Okay. Yet still, EBITDA is getting reduced from guidance from say, $17 million to zero, despite the fact that you're going to have $30 million in savings. Am I understanding that correctly?

Yeah, that is correct.

Okay. All right. And I'll follow up with you, Kevin, offline, you know, to kind of discuss more granular details there. uh i'm interested in the uh new university partner that you announced with the university partner group which is uh exciting news and faster than expected i i i gather by your uh prepared comments that you're not at liberty to say who yet but perhaps you couldn't tell us uh what does it entail i think these small and medium-sized partnerships are usually less than a million a year and the term is usually less than one year. Is this consistent with that expectation?

Yeah, that is correct, Alex. Small and medium are less than a million dollars and would be completed within the year.

Okay. And then... I was going to ask, you know, while revenues were where we expected them to be and the first two lines of expense, communications and... and, uh, counseling, uh, or sorry, technology and counseling, uh, were actually less than I expected. Uh, marketing, communication, and general administrative were more than I expected. Uh, part of that is the, uh, the severance of 4.6 million. Where does that come in on, uh, the GNA line, Evan?

Yeah, all of the severance associated with the leadership transition will flow through or has flown through the general administrative classification.

Okay. And then, um, And then the CEO search, I'm glad to see that that has commenced. How long do you think this process will take? You said you're looking at both inside and outside the company. What are the characteristics you're looking for in the next leader of the company?

Yeah, why don't we ask George, who is not with us in this room, George Pernsteiner, to talk about the CEO search.

Thank you. Thank you, Kevin, and thank you, Mr. Harris, for the question. We have charged a committee to develop the characteristics that we will be seeking, and they are working with Russell Reynolds Associates to refine those right now. We are looking for really a blend of vision and of operational experience. And the question really, you know, they have to have industry experience, they have to have operational experience. but they also have to have, in my view and I think on the committee's view, a real customer service focus because we are transitioning from being the provider, sole provider running a university, to now wanting to engage with a broader range of customers, including UAGC. And that will require then almost a different way of thinking than perhaps we required in the past. So that's part of what we're looking at in the next CEO, for the next CEO.

Good. That's helpful. I appreciate that additional color. Back to guidance, and then I'll get back in the queue. So what explains the delta in adjusted EBITDA expectations? Is it primarily revenue, or are marketing expenses expected to increase significantly?

It's primarily revenue, Alex.

All right. And because Zovio growth guidance is unchanged, this is all in the university partners segment. So after that strong start in December, as you had said, it slowed down in the first quarter. And you attribute that to the headwinds that everyone's seeing in the industry as well as military, I guess, and brand recognition and just building the brand for UAGC.

Yeah, that's true, Alex. It's primarily brand and marketing, and certainly we have the ongoing COVID challenges as well.

Okay, great. Thank you for the additional further, and I'll get back to you.

Your next question comes from Terry View from Water Tower Research.

Yes, good afternoon and thanks for taking my question. Alex covered quite a bit of ground, but maybe if you could just a little household questions on the financials. The break-even EBITDA, does that include the severance expenses or is the severance to be, you know, on a pro forma basis?

Yeah. So, Terry, the guidance that we've provided on EBITDA for the year is actually adjusted, or we refer to it as non-GAAP EBITDA. So that would be without that charge included.

Okay. Okay. Thank you. I was curious on the brand issue and so on. What are you seeing with UAGC? Where are you having... maybe a new mix of students, or are you starting to see that, or is it still a bit early?

No, there's been, you know, again, as we mentioned, some challenges with the new brand. A lot of that stems from, you know, really refining our value proposition and how that resonates with our prospective students. And as mentioned on our that we have a little bit of a geographic shift in the mix of the students that are looking at the new brand.

Okay. I mean, are you seeing new pockets or only some reductions here and there?

We're seeing some new pockets, not necessarily reductions per se, but we're seeing some geographic shifts of students that are looking at the new brand that we haven't seen before when we had the Ashford brand.

okay any impact on the corporate partners um for the most part that's remained fairly uh fairly uh steady so we have not seen much if any impact on the corporate brand okay on the new uh the new partner that you announced um on one hand you said these are fairly small engagement and they last less than a year but then on the other hand I think you made some commentary that would indicate you think it's going to be a longer-term relationship. I don't know if you want to add some color one way or another there.

Yeah. The initial focus, as I mentioned, is primarily in our student response center and enrollment. But as with any type of new partner, building that relationship is going to be very critical at the very beginning. So, again, certainly it's our hope to build a strong partnership that would, you know, yield the longer term. So, you know, we're in the early stages, but, you know, we'll start on a very narrow basis and hope to build from there.

Okay. In terms of your growth, are you seeing growth in existing contracts and utilization, or is it mostly new contracts that are being layered on?

I think we're seeing growth in both areas with our existing accounts that we have. I think there's opportunities that we're seeing to expand growth there. And as we mentioned, in both of the subsidiaries, Fullstack and TutorMe, we're seeing opportunities for new partnerships as well.

Okay. Great. Well, that does it for me. Thank you very much.

Thank you, Terry. Thanks, Terry.

Your next question comes from Greg Gibbons from Northland Securities.

Hey, George, Chris, and Kevin, thanks for taking the questions. And the commentary as well. I guess, you know, first, now that we have a full quarter after the sale of Ashford, I was just kind of wondering if you can comment, I guess, on the changes that you're seeing with respect to either web searches or inquiries or leads since that sale and brand name change. And then I guess along with that, kind of how much did enrollment decline, I guess, in the quarter?

Maybe I'll speak to the first part, Ray, on the web traffic. As you I'm sure are aware, the Ashford brand name had quite a bit of equity over the years. So when you're looking at both organic search and trade name, you had a very strong lead or inquiry generation. With the new brand, we've seen you know, some degradation on that traffic that's coming from, you know, search trade name and also from organic. So, you know, we'll need to, you know, it's going to take time to build that brand, you know, in the market so we can, you know, you see the benefits. So consequently, we've shifted, you know, some of our marketing strategies into other channels. So the total inquiry volume has remained fairly constant you're looking at a shift in terms of the media mix in terms of what we typically would experience.

And then, Greg, real quickly, related to the enrollment, that's really information that is data that is owned by the university, proprietary to them. And as we mentioned on the call a couple months ago when we talked about year-end results, that's information we won't be providing moving forward.

Okay, fair enough. And if I could follow up, I guess, on the CEO search, you know, thanks for the color on the type of candidate that you're looking for there. But did you, sorry if I missed this, but did you kind of say anything with regards to when you expect that process to be completed?

Well, it's just getting underway now. And our hope is that it will be completed certainly within just a few months. But I can't predict that really. Okay. I can hope it don't.

Okay, yeah, no problem. I guess, you know, I think it's fair that maybe you don't disclose the enrollment or anything, but would you maybe be able to discuss kind of enrollment assumptions that you're using for the full-year guidance?

Sorry about that, Greg, but that's just information that we're just not able to talk through at this point or provide.

Okay, got it. With respect to, you said, discussions underway with several other institutions in the UPG segment, I was just wondering kind of what stage those discussions are in and maybe how those discussions were initiated.

So to your first question, we've got potential partners at different stages, and as we said, we're looking at potential one to three additional. So they're just at different stages. They all come in different shapes and sizes, if you will, in terms of the types of services that they're looking for. So we have some interest, and they've come from a variety of different ways in terms of how they've reached us and contacted us.

Okay. Sounds good. Thanks, guys.

That was our last question at this time. I will turn the call back over to the presenters.

Okay. Well, thank you. That concludes our question and answer session. I will now just sort of thank the group for being part of our earnings call here today, and we look for additional follow-up meetings here later on. Thank you.

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