Zovio Inc.

Good afternoon, and welcome to Zovio's first quarter 2022 earnings conference call. Today's call is being recorded. At this time, I'd like to turn the call over to Vicky Shrey, Executive Vice President, Chief External Affairs Officer. Please go ahead.

Thank you, and good afternoon. Zovio's first quarter 2022 earnings release was issued earlier today. and it's posted on the company's website at www.zovio.com. Joining me on the call today are Randy Hendricks, Chief Executive Officer, 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 enrollment, student retention, 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 2022 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 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 law. 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 U.S. GAAP. Please note that these non-GAAP financial measures are intended to supplement GAAP financial information and should not be considered as a substitute for our GAAP results. Please refer to our SEC filing, including our annual report on Form 10-K for the year ended December 31, 2021, as well as our quarterly report on Form 10-Q for the quarter ended March 31, 2022, 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 CEO, Randy Hendricks.

Thank you, Vicki, and welcome everyone to our first quarter 2022 earnings call. Starting with our results for the quarter, we had revenue of $61.6 million and incurred a net loss of $7.4 million, or a loss of 22 cents per diluted share. Excluding certain items, our non-GAAP net loss for the first quarter of 2022 was 4.5 million, or a loss of 13 cents per diluted share. We recorded an adjusted EBITDA loss, which more closely approximates our cash usage of 2.8 million for the first quarter of 2022 versus a 6.8 million loss for the fourth quarter of 2021. we are starting to see the benefits from the restructuring activities we've recently undertaken to better align our cost structure with our revenues and will continue to carefully manage our expenses until the company is once again profitable. As we discussed on our call a few weeks ago, we are working with UAGC to stabilize and grow new enrollment and improve the student experience. We have also taken actions to address the underperforming areas of our business, which included several organizational and operational changes. We are encouraged by the preliminary results from the changes I discussed on April 15th. For example, for the first time since we completed the strategic transaction with UAGC in December of 2020, ending enrollment for the university grew for the period January 1st through March 31st. It's noteworthy to mention two of our textbooks have received textbook and academic author associations TAA awards. The TAA is a national organization dedicated to supporting textbook and academic authors. These awards recognize our commitment to creating and providing quality educational products. The Forbes School of Business and Technology at the University of Arizona Global Campus utilizes both textbooks to support student learning in their undergraduate business programs. With regard to the judgment that was issued on March 3rd, 2022, we have filed a notice of intention to move for a new trial and or move to vacate the judgment. The motion is currently scheduled for a hearing on May 13th. Turning to our other businesses full stack academy and tutor me continue to perform well in the first quarter with revenues of 9.3 million growing 30% for the quarter year over year tutor me and full stack continue to be well positioned for long term growth and value creation. tutor me continue to execute new partnership agreements during the first quarter of 2022 with school districts and universities. Our TutorMe total partnership count is now over 350. In the first quarter, total student usage continued to increase year over year with approximately 28,000 students tutored in the quarter. Adding to an already robust portfolio of accolades, TutorMe has won EdTech's Digest 2022 award for best tutoring solution. Our team was also recognized as the finalist in the personalized learning solution award category. Turning to full stack. Over the last quarter, we continue to expand our university powered boot camps by adding product management to our growing list of programs. Full stacks growth strategy includes adding university partners, as well as increasing the number of programs offered by our current university partners. During Q1, we grew the total number of programs delivered by university partners by 38% sequentially. In Q1, the first cohort of students in conjunction with our UpGrad partnership in India started cybersecurity and data analytics programs. In addition, we launched our second cohort for web development with the New York City Workforce Development Corporation. Fullstack partners with companies to help our students secure meaningful jobs after graduation by actively participating in recruitment events and sharing job openings with our students. We are committed to expanding the number of companies that we work with and are pleased with the addition of approximately 50 new partners in Q1. We continue to have high expectation for new partnerships for TutorMe and Fullstack, and our outlook for Xovial growth remains strong. Before I turn the call over to Kevin, I want to address our comprehensive review of the business. As I mentioned on the last call, we are assessing strategic alternatives that will create the most value for our shareholders, which includes potential divestitures of all three businesses we operate. I'm pleased with the interest being shown and the progress we are making, and look forward to sharing details with you in the future. Simultaneously, we are executing our turnaround plan for enrollment at UAGC and are capitalizing on opportunities for growth with TutorMe and Fullstack. Now, I will turn the call over to Kevin Royal to review our financial and operating results.