3Q21 Results: Mixed Trends at UAGC, More Improvements Needed; Zovio Growth Continues to Execute Well

  • Zovio reported mostly in-line revenues of $62.2 million and a per-share loss of $0.12. The University of Arizona Global Campus (UAGC) enrollments remain challenging, while retention has been improving consistently.
  • Zovio Growth continues to perform well with revenues of $7.0 million versus $6.2 million in the comparable quarter last year. Revenue growth guidance is being maintained at 30% for 2021, with an expected EBITDA loss of ~$7 million. The company expects the segment to become profitable by 2023.
  • Zovio maintained its annual revenue guidance of $265 million to $275 million and expects to break even—or be at a modest loss—at the EBITDA level. It reaffirmed that cost-reduction initiatives should yield ~$60 million in expected annualized savings.
  • The management said initiatives taken in the past few months are producing positive results on the retention front, but more needs to be done to improve new enrollments. Coordination and fine-tuning with the UAGC management continue, and we look forward to more progress in that key area. Improvements in the military segments, and continued leverage of the UAGC brand in Arizona, California, Texas, and other neighboring states, should lead the way.
  • Fullstack and TutorMe are performing well and continue to add new partners. Revenues for this segment grew 40% in the first nine months of the year. TutorMe ended the quarter with over 300 partners, while Fullstack ended with 17 partners, having added the Utah State University during the quarter.
  • The company generated $4.7 million in cash from operations during the quarter and ended the quarter with $32 million in unrestricted cash. It is on course to be cash-flow positive in 4Q21 and expects to end the year with $40 million in unrestricted cash.
  • Zovio trades at a 2021 EV/Revenue multiple of less than 0.2x versus ~3x for the industry. The uncertainty in the business model transition—from running Ashford University to providing a comprehensive range of services to UAGC—is clearly weighing on the stock and overshadows the strong results from Zovio Growth. Improved visibility and performance in the University Partners segment could start moving Zovio’s valuation closer to those of its peers.


Zovio is an education technology company headquartered in Chandler, Arizona. It provides services to universities to help them manage distance-learning programs. These include program development, marketing, and student monitoring and retention. Its largest university-partner is the University of Arizona Global Campus with about 30,000 students enrolled. Zovio also provides specific services directly to students, or in partnership with universities and schools, such as the FullStack Academy (coding and computer security training), and TutorMe (tutoring services).


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