10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2012

or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission File Number: 000-33283

THE ADVISORY BOARD COMPANY

(Exact name of registrant as specified in its charter)

Delaware	52-1468699
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
2445 M Street, NW, Washington, D.C.	20037
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (202) 266-5600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of November 1, 2012, the registrant had outstanding 34,830,125 shares of Common Stock, par value $0.01 per share.

THE ADVISORY BOARD COMPANY

INDEX TO FORM 10-Q

		Page No.
PART I. FINANCIAL INFORMATION			1
ITEM 1.	Financial Statements		1
	Consolidated Balance Sheets as of September 30, 2012 (unaudited) and March 31, 2012		1
	Unaudited Consolidated Statements of Income for the Three and Six Months Ended September  30, 2012 and 2011		2
	Unaudited Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2012 and 2011		3
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended September  30, 2012 and 2011		4
	Notes to Unaudited Consolidated Financial Statements		5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		24
ITEM 4.	Controls and Procedures		25
PART II. OTHER INFORMATION			26
ITEM 1A.	Risk Factors		26
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		26
ITEM 6.	Exhibits		27
Signatures			28

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

THE ADVISORY BOARD COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	September 30, 2012			March 31, 2012
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	79,927		$	60,642
Marketable securities		15,304			4,823
Membership fees receivable, net		319,167			281,584
Prepaid expenses and other current assets		12,957			6,705
Deferred income taxes, current		8,704			7,255
Total current assets		436,059			361,009
Property and equipment, net		58,071			49,653
Intangible assets, net		18,735			19,384
Goodwill		74,235			74,235
Deferred incentive compensation and other charges		57,327			53,369
Deferred income taxes, net of current portion		6,038			7,655
Investment in unconsolidated entity		5,946			8,662
Other non-current assets		8,890			9,000
Marketable securities		132,543			122,621
Total assets	$	797,844		$	705,588
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Deferred revenue	$	343,379		$	313,958
Accounts payable and accrued liabilities		69,082			57,529
Accrued incentive compensation		12,167			18,691
Total current liabilities		424,628			390,178
Long-term deferred revenue		106,691			78,498
Other long-term liabilities		15,889			19,865
Total liabilities		547,208			488,541
Redeemable noncontrolling interest		100			—
The Advisory Board Company’s stockholders’ equity:
Preferred stock, par value $0.01; 5,000,000 shares authorized, zero shares issued and outstanding		—			—
Common stock, par value $0.01; 135,000,000 shares authorized, 34,777,020 and 46,994,560 shares issued as of September 30, 2012 and March 31, 2012, respectively, and 34,777,020 and 33,729,780 shares outstanding as of September 30, 2012 and March 31, 2012, respectively		348			235
Additional paid-in capital		344,634			315,648
Retained (deficit) earnings		(96,651	)		189,742
Accumulated elements of other comprehensive income		2,313			1,206
Treasury stock, at cost, 0 and 13,264,780 shares as of September 30, 2012 and March 31, 2012, respectively		—			(289,784	)
Total stockholders’ equity controlling interest		250,644			217,047
Equity attributable to noncontrolling interests		(108	)		—
Total stockholders’ equity		250,636			217,047
Total liabilities and stockholders’ equity	$	797,844		$	705,588

The accompanying notes are an integral part of these consolidated balance sheets.

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THE ADVISORY BOARD COMPANY

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Revenue	$	110,758		$	91,467		$	214,900		$	171,404
Costs and expenses:
Cost of services, excluding depreciation and amortization		56,989			49,759			115,355			92,914
Member relations and marketing		21,486			18,490			40,606			36,370
General and administrative		15,632			11,886			29,111			22,709
Depreciation and amortization		4,430			3,503			8,516			6,450
Operating income		12,221			7,829			21,312			12,961
Other income, net		688			448			1,264			1,245
Income from continuing operations before provision for income taxes and equity in loss of unconsolidated entity		12,909			8,277			22,576			14,206
Provision for income taxes		(4,944	)		(3,104	)		(8,646	)		(5,327	)
Equity in loss of unconsolidated entity		(592	)		—			(2,716	)		—
Net income from continuing operations		7,373			5,173			11,214			8,879
Discontinued operations:
Net income from discontinued operations		—			30			—			195
Net income before allocation to noncontrolling interest		7,373			5,203			11,214			9,074
Net loss attributable to noncontrolling interest		108			—			108			—
Net income attributable to common stockholders	$	7,481		$	5,203		$	11,322		$	9,074
Earnings per share—basic:
Net income from continuing operations attributable to common stockholders	$	0.22		$	0.16		$	0.33		$	0.27
Net loss from discontinued operations attributable to common stockholders	$	—		$	0.00		$	—		$	0.01
Net income attributable to common stockholders per share—basic	$	0.22		$	0.16		$	0.33		$	0.28
Earnings per share—diluted:
Net income from continuing operations attributable to common stockholders	$	0.21		$	0.15		$	0.31		$	0.26
Net loss from discontinued operations attributable to common stockholders	$	—		$	0.00		$	—		$	0.01
Net income attributable to common stockholders per share—diluted	$	0.21		$	0.15		$	0.31		$	0.27
Weighted average number of shares outstanding:
Basic		34,660			32,596			34,421			32,416
Diluted		36,253			34,366			36,154			34,082

The accompanying notes are an integral part of these consolidated financial statements.

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THE ADVISORY BOARD COMPANY

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

	Three Months  Ended September 30,				Six Months  Ended September 30,
	2012		2011		2012		2011
Net income attributable to common stockholders	$	7,481	$	5,203	$	11,322	$	9,074
Other comprehensive income:
Net unrealized gains on marketable securities, net of tax		769		606		1,107		1,676
Comprehensive income	$	8,250	$	5,809	$	12,429	$	10,750

The accompanying notes are an integral part of these consolidated financial statements.

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THE ADVISORY BOARD COMPANY

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six Months Ended September 30,
	2012			2011
Cash flows from operating activities:
Net income before allocation to noncontrolling interest	$	11,214		$	9,074
Adjustments to reconcile net income before allocation to noncontrolling interest to net cash provided by operating activities:
Depreciation and amortization		8,516			6,802
Deferred income taxes		(408	)		10
Excess tax benefits from stock-based awards		(9,721	)		(578	)
Stock-based compensation expense		6,911			5,526
Amortization of marketable securities premiums		958			528
Loss on investment in common stock warrants		110			—
Equity in loss of unconsolidated entity		2,716			—
Changes in operating assets and liabilities:
Membership fees receivable		(37,583	)		(53,435	)
Prepaid expenses and other current assets		(6,252	)		863
Deferred incentive compensation and other charges		(3,958	)		(10,990	)
Deferred revenues		57,614			62,902
Accounts payable and accrued liabilities		22,456			16,348
Accrued incentive compensation		(6,524	)		(3,629	)
Other long-term liabilities		(3,976	)		3,540
Net cash provided by operating activities		42,073			36,961
Cash flows from investing activities:
Purchases of property and equipment		(14,562	)		(13,524	)
Capitalized external use software development costs		(1,723	)		(1,366	)
Acquisition-related earn-out payments		(1,182	)		(16,829	)
Investment in unconsolidated entity		—			(10,000	)
Redemptions of marketable securities		23,220			11,000
Purchases of marketable securities		(42,889	)		(8,157	)
Net cash used in investing activities		(37,136	)		(38,876	)
Cash flows from financing activities:
Proceeds from issuance of common stock from exercise of stock options		16,205			13,091
Withholding of shares to satisfy minimum employee tax withholding for vested restricted stock units		(3,844	)		(1,266	)
Proceeds from issuance of common stock under employee stock purchase plan		165			110
Excess tax benefits from stock-based awards		9,721			578
Contributions from noncontrolling interest		100			—
Purchases of treasury stock		(7,999	)		(4,673	)
Net cash provided by financing activities		14,348			7,840
Net increase in cash and cash equivalents		19,285			5,925
Cash and cash equivalents, beginning of period		60,642			30,378
Cash and cash equivalents, end of period	$	79,927		$	36,303

The accompanying notes are an integral part of these consolidated statements.

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THE ADVISORY BOARD COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Business description and basis of presentation

The Advisory Board Company (individually and collectively with its subsidiaries, the “Company”) provides best practices research and analysis, business intelligence and software tools, and management and advisory services to hospitals, health systems, pharmaceutical and biotech companies, health care insurers, medical device companies, colleges, universities, and other educational institutions through discrete programs. Members of each program are typically charged a fixed annual fee and have access to an integrated set of services that may include best practices research studies, executive education seminars, customized research briefs, web-based access to the program’s content database, and software tools.

The unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes as reported in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2012 and the Company’s quarterly report on Form 10-Q for the quarterly period ended June 30, 2012. The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after elimination of all significant intercompany transactions. Certain prior-period amounts have been reclassified to conform to the current-period presentation.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the consolidated financial position, results of operations, and cash flows as of the dates and for the periods presented have been included. The consolidated balance sheet presented as of March 31, 2012 has been derived from the financial statements that have been audited by the Company’s independent registered public accounting firm. The consolidated results of operations for the three and six months ended September 30, 2012 may not be indicative of the results that may be expected for the Company’s fiscal year ending March 31, 2013, or any other period.

On June 18, 2012, the Company completed a two-for-one split of its outstanding shares of common stock in the form of a stock dividend. Each stockholder of record received one additional share of common stock for each share of common stock owned at the close of business on May 31, 2012. Share numbers and per share amounts presented in the accompanying consolidated financial statements and notes thereto for dates before June 18, 2012 have been restated to reflect the impact of the stock split.

Reclassification

On April 1, 2012, the Company began including amortization expense for intangible assets in depreciation and amortization rather than in cost of services on its consolidated statements of income. Amounts reported for prior years have been reclassified to conform to the current period’s presentation. As a result of this reclassification, amortization expense for intangible assets of $1.2 million and $2.4 million for the three and six months ended September 30, 2012, respectively, and $1.4 million and $2.4 million for the three and six months ended September 30, 2011, respectively, is included in depreciation and amortization on the accompanying consolidated statements of income.

Note 2. Recent accounting pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all recent ASUs. ASUs not listed below were assessed and determined to be not applicable or are expected to have minimal impact on the Company’s consolidated financial position and results of operations.

Recently adopted

In December 2011, the FASB issued an update which indefinitely deferred the guidance related to the presentation of reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income on the face of the financial statements, as required by ASU 2011-05. The Company adopted all other requirements of ASU 2011-05 on April 1, 2012 and has presented consolidated net income and consolidated comprehensive income in two separate, but consecutive, statements. The adoption of this guidance did not have a material effect on the Company’s financial position or results of operations.

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Note 3. Marketable securities

The aggregate value, amortized cost, gross unrealized gains, and gross unrealized losses on available-for-sale marketable securities are as follows (in thousands):

	As of September 30, 2012
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	29,688	$	29,513	$	176	$	1
Tax exempt obligations of states		118,159		114,818		3,579		238
	$	147,847	$	144,331	$	3,755	$	239
	As of March 31, 2012
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	33,472	$	33,543	$	130	$	201
Tax exempt obligations of states		93,972		92,028		2,667		723
	$	127,444	$	125,571	$	2,797	$	924

The following table summarizes marketable securities maturities (in thousands):

	As of September 30, 2012
	Fair market value		Amortized cost
Matures in less than 1 year	$	15,304	$	14,966
Matures after 1 year through 5 years		35,186		33,989
Matures after 5 years through 20 years		97,357		95,376
	$	147,847	$	144,331

Other than redemptions upon maturity, there were no sales during the three or six months ended September 30, 2012 or 2011. The weighted average maturity on all marketable securities held by the Company as of September 30, 2012 was approximately 5.8 years. Pre-tax net unrealized gains on the Company’s investments of $3.5 million as indicated above were caused by the decrease in market interest rates compared to the average interest rate of the Company’s marketable securities portfolio. Of this amount, $338,000 is related to investments that mature before September 30, 2013. The Company purchased certain of its investments at a premium or discount to their relative fair values. The Company does not intend to sell these investments and it is not more likely than not that it will be required to sell the investments before recovery of the amortized cost bases, which may be maturity; therefore, the Company does not consider these investments to be other-than-temporarily impaired as of September 30, 2012. The Company has reflected the net unrealized gains and losses, net of tax, in accumulated other comprehensive income on the accompanying consolidated balance sheets. The Company uses the specific identification method to determine the cost of marketable securities that are sold.

Note 4. Acquisitions

PivotHealth

On August 1, 2011, the Company acquired for cash substantially all the assets of PivotHealth, LLC (“PivotHealth”), a leading physician practice management firm. The Company acquired PivotHealth to supplement its existing physician practice management capabilities and provide new growth opportunities with the addition of PivotHealth’s expertise in long-term physician practice management. The total purchase price, net of cash acquired, of $19.8 million consisted of an initial payment of $15.0 million of cash; the fair value of estimated additional, contingent cash payments of $2.9 million; and an additional $1.9 million placed into escrow, which was released on August 1, 2012. The contingent cash payments, which have no guaranteed minimum or maximum, will become due and payable to the former owner of the PivotHealth business if certain revenue targets are achieved over the evaluation periods beginning at the acquisition date and extending through December 31, 2014. A $0.4 million downward adjustment was made to the fair value of the liabilities for such contingent cash payments during the three months ended June 30, 2012. A $0.1 million upward adjustment was made to the fair value of the liabilities for such contingent cash payments during the three months ended September 30, 2012. These adjustments were recorded in cost of services on the accompanying consolidated statements of income. See Note 10, “Fair value measurements,” for additional information.

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The total purchase price was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values as of August 1, 2011. The Company’s fair value of identifiable tangible and intangible assets was determined by using estimates and assumptions in combination with a valuation using an income approach from a market participant perspective. Of the total estimated purchase price, $1.8 million was allocated to acquired tangible assets, $1.0 million was allocated to assumed liabilities, and $6.4 million was allocated to intangible assets, which consist of the value assigned to customer related intangibles of $6.0 million, primarily customer relationships and trademarks, and employee related intangibles of $0.4 million. The acquired customer and employee related intangibles have estimated lives ranging from six months to nine years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 6.5 years. Approximately $12.6 million was allocated to goodwill, which represents synergistic benefits expected to be generated from scaling PivotHealth’s offerings across the Company’s large membership base. Goodwill is deductible for tax purposes.

The financial results of PivotHealth are included in the Company’s consolidated financial statements from the date of acquisition. Pro forma financial information for this acquisition has not been presented because the effects were not material to the Company’s historical consolidated financial statements.

Note 5. Investment in unconsolidated entity

On August 31, 2011, the Company entered into an agreement with UPMC to establish Evolent Health, Inc. (“Evolent”) for the purpose of driving provider-led, value-driven care with innovative technology, integrated data and analytics, and services. The Company provided $10.0 million and other non-cash contributions to Evolent for an initial equity interest of 44% and the right to appoint one person to Evolent’s board of directors. In addition, a member of the Company’s Board of Directors serves as the chief executive officer of Evolent. The Company exercises significant influence over Evolent, but does not control Evolent and is not the primary beneficiary of Evolent’s activities. The Company’s investment in Evolent is accounted for under the equity method of accounting, with the Company’s proportionate share of the income or loss recognized in the consolidated statements of income. In July 2012, Evolent completed a second round of financing. The Company did not participate in this second round, and as such, its equity interest was diluted. As a result of this dilution, the Company recognized a $1.1 million gain on its investment which is included in equity in loss of unconsolidated entity on the accompanying consolidated statements of income for the three and six months ended September 30, 2012. As of September 30, 2012, the Company’s equity interest in Evolent was 31%. The Company’s proportionate share of the losses of Evolent during the three and six months ended September 30, 2012 were $1.7 million and $3.8 million, respectively. Evolent is in the early stages of its business plan, and as a result, the Company expects Evolent to incur losses and require additional funding in the future. The Company’s investment in Evolent will be evaluated for impairment whenever events or changes in circumstances indicate that there may be an other-than-temporary decline in value. The Company believes that no such impairment indicators existed during the six months ended September 30, 2012.

The following is a summary of the financial position of Evolent, as of the dates presented (in thousands):

	As of
	September 30, 2012		March 31, 2012
	(unaudited)
Assets:
Cash	$	11,038	$	14,807
Other current assets		2,702		821
Intangible assets, net		2,312		2,755
Other non-current assets		3,465		1,152
Total assets	$	19,517	$	19,535
Liabilities and Members’ Equity:
Deferred revenue	$	4,976	$	200
Accounts payable and accrued liabilities		2,853		669
Long-term liabilities		359		359
Member’s equity		11,329		18,307
Total liabilities and member’s equity	$	19,517	$	19,535

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The following is a summary of the operating results of Evolent for the periods presented (in thousands) (unaudited):

	Three Months  Ended September 30,					Six Months  Ended September 30,
	2012			2011		2012			2011
Revenue	$	2,193		$	—	$	2,262		$	—
Operating expenses		(7,440	)		—		(12,655	)		—
Depreciation and amortization		(178	)		—		(482	)		—
Interest, net		3			—		7			—
Net loss	$	(5,422	)	$	—	$	(10,868	)	$	—

Note 6. Other non-current assets

In June 2009, the Company invested in the convertible preferred stock of a private company that provides technology tools and support services to health care providers, including the Company’s members. In addition, the Company entered into a licensing agreement with that company. As part of its investment, the Company received warrants to purchase up to 6,015,000 shares of the company’s common stock at an exercise price of $1.00 per share as certain performance criteria are met. The warrants are exercisable through June 19, 2019. The warrants contain a net settlement feature and therefore are considered to be a derivative financial instrument. A $0.1 million downward adjustment was made to the fair value of the warrants during the three months ended September 30, 2012. The warrants are recorded at their fair value, which was $340,000 as of September 30, 2012 and $450,000 as of March 31, 2012, and are included in other non-current assets on the accompanying consolidated balance sheets. The change in the fair value of the warrants is recorded in other income, net on the accompanying consolidated statements of income. For additional information regarding the fair value of these warrants, see Note 10, “Fair value measurements.” The convertible preferred stock investment is recorded at cost, and the carrying amount of this investment as of September 30, 2012 of $5.0 million is included in other non-current assets on the accompanying consolidated balance sheets. The convertible preferred stock accrues dividends at an annual rate of 8% that are payable if and when declared by the investee’s board of directors. As of September 30, 2012, no dividends had been declared by the investee or recorded by the Company. This investment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of this asset may not be recoverable. The Company believes that no such impairment indicators existed during the six months ended September 30, 2012 or 2011.

Note 7. Noncontrolling interests

On July 5, 2012, the Company entered into an agreement with an entity created for the sole purpose of providing consulting services for the Company on an exclusive basis. The Company’s relationship with the entity is governed by a services agreement and other documents which provide the entity’s owners the conditional right to require the Company to purchase their ownership interests (“Put Option”) at any time after certain conditions have been satisfied through December 31, 2014. As of September 30, 2012, these conditions had not been satisfied. These agreements also provide the Company a conditional right to require the entity’s owners to sell their ownership interests to the Company (“Call Option”) at any time between July 5, 2013 and December 31, 2014. The equity interest in this entity is classified as a redeemable noncontrolling interest which is presented outside of permanent equity as the redemption is not solely within the Company’s control. The redeemable noncontrolling interest is recorded at its initial fair value of $0.1 million and has not been subsequently adjusted, as management’s current judgment is that it is not probable that the Put Option will become exercisable prior to its expiration due to uncertainty in the achievement of certain performance conditions outlined in the agreement. If the Put Option were to become exercisable in the future, the estimated maximum total redemption amount of the redeemable noncontrolling interest under the Put Option would be approximately $7.5 million, which would be recorded as a reduction to net income available to common stockholders.

The Company has determined that this entity meets the definition of a variable interest entity over which it has significant influence and, as a result, has consolidated the results of this entity into its consolidated financial statements. Noncontrolling interests represent the entity’s owners’ claims on consolidated investments where the Company owns less than a 100% interest. As of September 30, 2012, the Company has a 0% ownership interest in this entity. The Company records these interests at their initial fair value, adjusting the basis prospectively for the noncontrolling holders’ share of the respective consolidated investments’ results of operations and applicable changes in ownership.

Note 8. Property and equipment

Property and equipment consists of leasehold improvements, furniture, fixtures, equipment, capitalized internal software development costs, and acquired developed technology. Property and equipment is stated at cost, less accumulated depreciation and amortization. In certain of its membership programs, the Company provides software tools under hosting arrangements where the software application resides on the Company’s or its service providers’ hardware. The members do not take delivery of the software and only receive access to the software tools during the term of their membership agreement. Software development costs that are incurred in the preliminary project stage are expensed as incurred. During the development stage, direct consulting costs and payroll-related

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costs for employees that are directly associated with each project are capitalized and amortized over the estimated useful life of the software once placed into operation. Capitalized software is amortized using the straight-line method over its estimated useful life, which is generally five years. Replacements and major improvements are capitalized, while maintenance and repairs are charged to expense as incurred.

The acquired developed technology is classified as software within property and equipment because the developed software application resides on the Company’s or its service providers’ hardware. Amortization for acquired developed software is included in depreciation and amortization on the Company’s consolidated statements of income. Developed software obtained through acquisitions is amortized over its weighted average estimated useful life of approximately nine years based on the cash flow estimate used to determine the value of the asset.

Furniture, fixtures, and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are depreciated using the straight-line method over the shorter of the estimated useful lives of the assets or the lease term. There are no capitalized leases included in property and equipment for the periods presented.

The amount of depreciation expense recognized on plant, property, and equipment during the three and six months ended September 30, 2012, was approximately $3.2 million and $6.1 million, respectively. The amount of depreciation expense recognized on plant, property, and equipment during the three and six months ended September 30, 2011 was approximately $2.1 million and $4.1 million, respectively.

Internally developed capitalized software is classified as software within property and equipment and has an estimated useful life of five years. As of September 30, 2012 and 2011, the carrying value of internally developed capitalized software was $22.5 million and $11.3 million, respectively. Property and equipment consists of the following (in thousands):

	As of
	September 30, 2012			March 31, 2012
Leasehold improvements	$	24,112		$	23,692
Furniture, fixtures, and equipment		30,932			26,529
Software		52,950			43,211
Property and equipment, gross		107,994			93,432
Accumulated depreciation and amortization		(49,923	)		(43,779	)
Property and equipment, net	$	58,071		$	49,653

The Company evaluates its long-lived assets for impairment when changes in circumstances exist that suggest the carrying value of a long-lived asset may not be fully recoverable. If an indication of impairment exists, and the Company’s net book value of the related assets is not fully recoverable based upon an analysis of its estimated undiscounted future cash flows, the assets are written down to their estimated fair value. The Company did not recognize any material impairment losses on any of its long-lived assets during the six months ended September 30, 2012 or 2011.

Note 9. Goodwill and intangibles

Included in the Company’s goodwill and intangibles balances are goodwill and acquired intangibles and internally developed capitalized software for sale. Goodwill is not amortized as it has an estimated infinite life. Goodwill is reviewed for impairment at least annually as of March 31, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company believes that no such impairment indicators existed during the six months ended September 30, 2012 or 2011. There was no impairment of goodwill recorded in the six months ended September 30, 2012 or 2011.

Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives, which range from six months to ten years. As of September 30, 2012, the weighted average remaining useful life of acquired intangibles was approximately 4.5 years. As of September 30, 2012, the weighted average remaining useful life of internally developed intangibles was approximately 4.1 years.

9

The gross and net carrying balances and accumulated amortization of intangibles are as follows (in thousands):

			As of September 30, 2012							As of March 31, 2012
	Weighted average useful life		Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Intangibles
Internally developed intangible for sale:
Capitalized software		5.0	$	4,769	$	(650	)	$	4,119	$	3,048	$	(380	)	$	2,668
Acquired intangibles:
Developed software		4.9		6,450		(3,225	)		3,225		6,450		(2,567	)		3,883
Customer relationships		7.5		11,900		(3,780	)		8,120		11,900		(2,914	)		8,986
Trademarks		3.7		2,700		(1,838	)		862		2,700		(1,625	)		1,075
Non-compete agreements		4.3		1,100		(502	)		598		1,100		(393	)		707
Customer contracts		4.9		5,199		(3,388	)		1,811		5,199		(3,134	)		2,065
Total other intangibles			$	32,118	$	(13,383	)	$	18,735	$	30,397	$	(11,013	)	$	19,384

Amortization expense for intangible assets for the three and six months ended September 30, 2012, recorded in depreciation and amortization on the accompanying consolidated statements of income, was approximately $1.2 million and $2.4 million, respectively. Amortization expense for intangible assets for the three and six months ended September 30, 2011, recorded in depreciation and amortization on the accompanying consolidated statements of income, was approximately $1.5 million and $2.7 million, respectively. The following approximates the anticipated aggregate amortization expense to be recorded in depreciation and amortization on the consolidated statements of income for the remaining six months of the fiscal year ending March 31, 2013 and for each of the fiscal years ending March 31, 2014 through 2017: $2.4 million, $4.7 million, $4.5 million, $1.8 million, and $1.3 million, respectively, and $2.3 million thereafter.

Note 10. Fair value measurements

Financial assets and liabilities

The estimated fair values of financial instruments are determined based on relevant market information. These estimates involve uncertainty and cannot be determined with precision. The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, and common stock warrants. In addition, contingent earn-out liabilities resulting from business combinations are recorded at fair value. The following methods and assumptions are used to estimate the fair value of each class of financial assets or liabilities that are valued on a recurring basis.

Cash and cash equivalents. This includes all cash and liquid investments with an original maturity of three months or less from the date acquired. The carrying amount approximates fair value because of the short maturity of these instruments. Cash equivalents consist of money market funds with original maturity dates of less than three months for which the fair value is based on quoted market prices. The Company’s cash and cash equivalents are held at major commercial banks.

Marketable securities. The Company’s marketable securities, consisting of U.S. government-sponsored enterprise obligations and various state tax-exempt notes and bonds, are classified as available-for-sale and are carried at fair market value based on quoted market prices.

Common stock warrants. The Company holds warrants to purchase common stock in an entity that provides technology tools and support services to health care providers, including the Company’s members, that are exercisable for up to 6,015,000 of the shares of the entity, as certain performance criteria are met. The common stock warrants meet the definition of a derivative and are carried at fair value in other non-current assets on the accompanying consolidated balance sheets. Gains or losses from changes in the fair value of the warrants are recognized in other income, net on the accompanying consolidated statements of income. See Note 6, “Other non-current assets,” for additional information. The fair value of these warrants is determined using a Black-Scholes-Merton model. Key inputs into this methodology are the estimate of underlying value of the common shares of the entity that issued the warrants and the estimate of level of performance criteria that will be achieved. The entity that issued the warrants is private, and the estimate of performance criteria to be met is specific to the Company. These inputs are unobservable and are considered key estimates made by the Company.

Contingent earn-out liabilities. This class of financial liabilities represents the Company’s estimated fair value of the contingent earn-out liabilities related to acquisitions based on probability assessments of certain performance achievements during the earn-out periods. Contingent earn-out liabilities are included in other long-term liabilities on the accompanying consolidated balance sheets. See Note 4, “Acquisitions,” for additional information.

10

Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The valuation can be determined using widely accepted valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). As a basis for applying a market-based approach in fair value measurements, GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Observable market-based inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3—Unobservable inputs that are supported by little or no market activity, such as discounted cash flow methodologies.

Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no significant transfers between Level 1, Level 2, or Level 3 during the six months ended September 30, 2012 or 2011.

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the necessary disclosures are as follows (in thousands):

	Fair value as of September 30,		Fair value measurement as of September 30, 2012 using fair value hierarchy
	2012		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	79,927	$	79,927	$	—	$	—
Available-for-sale marketable securities (2)		147,847		147,847		—		—
Common stock warrants (3)		340		—		—		340
Financial liabilities
Contingent earn-out liabilities (4)		22,500		—		—		22,500
	Fair value as of March 31,		Fair value measurement as of March 31, 2012 using fair value hierarchy
	2012		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	60,642	$	60,642	$	—	$	—
Available-for-sale marketable securities (2)		127,444		127,444		—		—
Common stock warrants (3)		450		—		—		450
Financial liabilities
Contingent earn-out liabilities (4)		20,200		—		—		20,200

(1) Fair value is based on quoted market prices.

(2) Fair value is determined using quoted market prices of the assets. For further detail, see Note 3, “Marketable securities.”

(3) The fair value of the common stock warrants as of September 30, 2012 and March 31, 2012 was calculated to be $0.23 per share and $0.24 per share, respectively, using the Black-Scholes-Merton model. The significant assumptions as of September 30, 2012 were as follows: risk-free interest rate of 1.0%; expected term of 6.72 years; expected volatility of 40.93%; dividend yield of 0.0%; weighted average exercise price of $1.00 per share; and a range of warrants to become exercisable of between 1,400,000 and 1,800,000 shares. The significant assumptions as of March 31, 2012 were as follows: risk-free interest rate of 1.1%; expected term of 6.97 years; expected volatility of 41.03%; dividend yield of 0.0%; weighted average exercise price of $1.00 per share; and a range of warrants to become exercisable of between 1,400,000 and 1,800,000 shares.

(4) This fair value measurement is based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and general macro-economic environment and industry trends.

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Common stock warrants

The Company’s fair value estimate of the common stock warrants received in connection with its June 2009 investment was zero as of the investment date. Changes in the fair value of the common stock warrants subsequent to the investment date are recognized in earnings in the periods during which the estimated fair value changes. The change in the fair value of the common stock warrants during the three months ended September 30, 2012 was driven primarily by a slight decrease in the estimated performance targets that will be achieved. The following table represents a reconciliation of the change in the fair value of the common stock warrants for the three and six months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30,					Six Months Ended September 30,
	2012			2011		2012			2011
Beginning balance	$	450		$	—	$	450		$	—
Fair value change in common stock warrants (1)		(110	)		—		(110	)		—
Ending balance	$	340		$	—	$	340		$	—

(1) Amounts were recognized in other income, net on the accompanying consolidated statements of income.

Contingent earn-out liabilities

The Company entered into an earn-out agreement in connection with its acquisition of Southwind Health Partners, L.L.C. and Southwind Navigator, LLC (together, “Southwind”) on December 31, 2009. The additional contingent payments, which have no guaranteed maximum, become due and payable to the former owner of the Southwind business if certain milestones are met over the evaluation periods beginning at the acquisition date and extending through December 31, 2014. The Company’s fair value estimate of the Southwind earn-out liability was $5.6 million as of the date of acquisition. As of September 30, 2012, based on current facts and circumstances, the estimated aggregate fair value of this contingent obligation has increased to $18.4 million, which will be paid at various intervals, if earned, over the evaluation periods beginning on the acquisition date and extending through December 31, 2014. The fair value of the Southwind earn-out liability is impacted by changes in estimates regarding expected operating results, changes in the valuation of the Company’s stock price, and an applied discount rate which was 15.0% as of September 30, 2012. As of September 30, 2012, $3.1 million had been earned and paid to the former owners. The final payments will be made in a combination of cash and/or shares of the Company’s common stock.

The Company entered into an earn-out agreement in connection with its acquisition of substantially all the assets of Cielo MedSolutions, LLC (“Cielo”) on February 1, 2011. The additional contingent payments, which will not exceed $7.0 million, become due and payable to the former owner of the Cielo business if certain product development and subscription milestones are met over the evaluation periods beginning at the acquisition date and extending through July 31, 2012. The Company’s fair value estimate of the Cielo earn-out liability, which is payable in cash, was $4.4 million as of the date of acquisition. The estimated aggregate fair value of the remaining contingent obligation for Cielo as of September 30, 2012 was $1.4 million. The fair value of the Cielo earn-out liability is impacted by estimates regarding the level of performance targets to be achieved and a discount rate, which was 14.5% as of September 30, 2012. As of September 30, 2012, $3.0 million has been earned and paid to the former owners.

The Company’s fair value estimate of the PivotHealth earn-out liability, which is payable in cash, was $2.9 million as of the date of acquisition. The estimated aggregate fair value of the contingent obligation for PivotHealth as of September 30, 2012 was $2.8 million. The fair value of the PivotHealth earn-out liability is impacted by changes in estimates regarding expected operating results and a discount rate, which was 15.5% as of September 30, 2012. See Note 4, “Acquisitions,” for additional information regarding the PivotHealth acquisition and related earn-out liability.

Changes in the fair value of the contingent earn-out liabilities subsequent to the acquisition date, including changes arising from events that occurred after the acquisition date, such as changes in the Company’s estimate of performance achievements, discount rates, and stock price, are recognized in earnings in the periods during which the estimated fair value changes. The following table represents a reconciliation of the change in the contingent earn-out liabilities for the three and six months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012		2011
Beginning balance	$	22,900		$	18,700		$	20,200	$	15,500
Fair value change in Southwind contingent earn-out liability (1)		(100	)		2,600			3,700		5,800
Fair value change in Cielo contingent earn-out liability (1)		—			(300	)		100		(300	)

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	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Fair value change in PivotHealth contingent earn-out liability (1)		100			—			(300	)		—
Southwind earn-out payment		(400	)		(300	)		(1,200	)		(300	)
Addition of PivotHealth contingent earn-out liability		—			2,900			—			2,900
Ending balance	$	22,500		$	23,600		$	22,500		$	23,600

(1) Amounts were recognized in cost of services on the accompanying consolidated statements of income.

Non-financial assets and liabilities

Certain assets and liabilities are not measured at fair value on an ongoing basis but instead are measured at fair value on a non-recurring basis; that is, such assets and liabilities are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). During the six months ended September 30, 2012 and 2011, no fair value adjustments or material fair value measurements were required for non-financial assets or liabilities.

Note 11. Stock-based compensation

Information with respect to common stock options granted under the Company’s stock incentive plans during the six months ended September 30, 2012 and 2011 are as follows:

	Six Months Ended September 30,
	2012					2011
	Number of Options			Weighted Average Exercise Price		Number of Options			Weighted Average Exercise Price
Outstanding, April 1		3,812,228		$	17.04		5,059,198		$	16.30
Granted		347,760			43.83		591,412			24.82
Exercised		(1,036,456	)		15.64		(793,924	)		16.50
Forfeited		(4,500	)		9.26		(36,372	)		18.89
Cancellations		—			—		—			—
Outstanding, September 30		3,119,032		$	20.51		4,820,314		$	17.30
Exercisable, September 30		1,546,512		$	17.60

The weighted average fair value of the options granted during the six months ended September 30, 2012 is estimated at $13.32 per share on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: risk-free interest rate of 0.7%, an expected life of approximately four years, volatility of 37.26%, and dividend yield of 0% over the expected life of the option.

The following table summarizes the changes in restricted stock units (“RSUs”) granted under the Company’s stock incentive plans during the six months ended September 30, 2012 and 2011:

	Six Months Ended September 30,
	2012					2011
	Number of RSUs			Weighted Average Grant Date Fair Value		Number of RSUs			Weighted Average Grant Date Fair Value
Non-vested, April 1		896,640		$	20.77		664,218		$	17.34
Granted		308,152		$	43.96		451,596		$	24.39
Forfeited		(2,904	)	$	22.75		(1,274	)		18.67
Vested		(273,444	)	$	46.19		(146,572	)	$	25.60
Non-vested, September 30		928,444		$	28.67		967,968		$	20.79

13

The Company recognized stock-based compensation expense in the following consolidated statements of income line items for stock options and RSUs, for the three and six months ended September 30, 2012 and 2011 (in thousands, except per share amounts):

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Stock-based compensation expense included in:
Costs and expenses:
Cost of services	$	989		$	847		$	1,993		$	1,690
Member relations and marketing		658			511			1,336			1,012
General and administrative		1,758			1,442			3,582			2,813
Depreciation and amortization		—			—			—			—
Total costs and expenses		3,405			2,800			6,911			5,515
Income from operations		(3,405	)		(2,800	)		(6,911	)		(5,515	)
Net income	$	(2,101	)	$	(1,750	)	$	(4,264	)	$	(3,447	)
Impact on diluted earnings per share	$	0.06		$	0.05		$	0.12		$	0.10

There are no stock-based compensation costs capitalized as part of the cost of an asset.

As of September 30, 2012, $31.0 million of total unrecognized compensation cost related to outstanding options and non-vested RSUs was expected to be recognized over a weighted average period of 1.5 years.

Note 12. Discontinued operations

On January 20, 2012, the Company sold its OptiLink business to Kronos Incorporated (“Kronos”) for $8.9 million in cash, net of selling costs. The OptiLink business, which is headquartered in a suburb of Portland, Oregon, employed approximately 35 employees who transferred to Kronos. The components of discontinued operations included in the consolidated statements of income consisted of (in thousands):

	Three Months Ended September 30,					Six Months Ended September 30,
	2012		2011			2012		2011
Revenue	$	—	$	1,464		$	—	$	3,142
Costs and expenses:
Cost of services		—		1,389			—		2,702
Member relations and marketing		—		28			—		128
Depreciation and amortization		—		—			—		—
Income from discontinued operations before provision for income taxes		—		47			—		312
Provision for income taxes		—		(17	)		—		(117	)
Net income from discontinued operations, net of provision for income taxes	$	—	$	30		$	—	$	195

Note 13. Revolving credit facility

On July 30, 2012, the Company entered into a $150.0 million five-year senior secured revolving credit facility (the “Credit Facility”) under a credit agreement, dated as of July 30, 2012, with the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party thereto. The Company incurred financing fees of $0.8 million in relation to this transaction. Under the Credit Facility, up to $150.0 million principal amount of borrowings and other credit extensions may be outstanding at any time, subject to compliance with specific financial ratios and the satisfaction of other customary conditions to borrowing. The maximum principal amount available under the credit agreement may be increased by up to an additional $50.0 million in minimum increments of $10.0 million at the Company’s election upon the satisfaction of specified conditions. The credit agreement contains a sublimit for up to $5.0 million principal amount of swing line loans outstanding at any time and a sublimit for the issuance of up to $10.0 million of letters of credit outstanding at any time. The facility loans may be borrowed, repaid and reborrowed from time to time during the term of the facility and will mature and be payable in full on July 30, 2017. Consequently, the amount outstanding under the Credit Facility at the end of a period may not be reflective of the total amounts outstanding during such period.

14

Amounts borrowed under the Credit Facility generally will bear interest at an annual rate calculated, at the Company’s option, on the basis of either (a) an alternate base rate plus the applicable margin for alternate base rate loans under the credit agreement, which ranges from 0.75% to 1.50% based on the Company’s total leverage ratio, or (b) an adjusted LIBO rate plus the applicable margin for eurocurrency loans under the credit agreement, which ranges from 1.75% to 2.50% based on the Company’s total leverage ratio. The Company is required to pay a commitment fee on the unutilized portion of the facility at an annual rate of between 0.25% and 0.40% based on the Company’s total leverage ratio.

As of September 30, 2012, there were no amounts outstanding under the Credit Facility and $150.0 million was available for borrowing.

Note 14. Earnings per share

Basic earnings per share is computed by dividing net income attributable to common stockholders by the number of weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to common stockholders by the number of weighted average common shares increased by the dilutive effects of potential common shares outstanding during the period. The number of potential common shares outstanding is determined in accordance with the treasury stock method, using the Company’s prevailing tax rates. Certain potential common share equivalents were not included in the computation because their effect was anti-dilutive. Fully diluted shares outstanding for both the three and six months ended September 30, 2012 and 2011 includes 112,408 contingently issuable shares related to the component of the Southwind earn-out estimated to be settled in stock. For additional information regarding these shares, see Note 10, “Fair value measurements.”

A reconciliation of basic to diluted weighted average common shares outstanding is as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Basic weighted average common shares outstanding		34,660		32,596		34,421		32,416
Effect of dilutive outstanding stock-based awards		1,481		1,660		1,621		1,556
Dilutive impact of earn-out liability		112		110		112		110
Diluted weighted average common shares outstanding		36,253		34,366		36,154		34,082

In the three months ended September 30, 2012 and 2011, 0.4 million and 0.3 million shares, respectively, related to share-based compensation awards have been excluded from the calculation of the effect of dilutive outstanding stock-based awards shown above because their effect was anti-dilutive. In the six months ended September 30, 2012 and 2011, 0.4 million and 0.3 million shares, respectively, related to share-based compensation awards have been excluded from the calculation of the effect of dilutive outstanding stock-based awards shown above because their effect was anti-dilutive.

Note 15. Income taxes

The Company uses a more-likely-than-not recognition threshold based on the technical merits of the tax position taken for the financial statement recognition and measurement of a tax position. If a tax position does not meet the more-likely-than-not initial recognition threshold, no benefit is recorded in the financial statements. The Company does not currently anticipate that the total amounts of unrecognized tax benefits will significantly change within the next 12 months. The Company classifies interest and penalties on any unrecognized tax benefits as a component of the provision for income taxes. No interest or penalties were recognized in the consolidated statements of income for the three or six months ended September 30, 2012 or 2011. The Company files income tax returns in U.S. federal and state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, and local tax examinations for filings in major tax jurisdictions before 2008.

Note 16. Stockholders’ equity

During the three and six months ended September 30, 2012, the Company repurchased 114,390 and 177,227 shares, respectively, of its common stock at a total cost of approximately $5.0 million and $8.0 million, respectively, pursuant to its share repurchase program. During the three and six months ended September 30, 2011, the Company repurchased 79,208 and 167,280 shares, respectively, of its common stock at a total cost of approximately $2.4 million and $4.7 million, respectively, pursuant to its share repurchase program. The total amount of common stock purchased from inception under the program as of September 30, 2012 was 15,442,007 shares at a total cost of $330.9 million. All repurchases to date have been made in the open market and have been retired as of September 30, 2012. No minimum number of shares subject to repurchase has been fixed and the share repurchase authorization has no expiration date. The Company has funded, and expects to continue to fund, its share repurchases with cash on hand, proceeds from the sale of marketable securities, and cash generated from operations. As of September 30, 2012, the remaining authorized repurchase amount was $19.1 million.

15

During the six months ended September 30, 2012, the Company retired 13,442,007 shares of its treasury stock. Upon retirement, these shares resumed the status of authorized but unissued stock. The treasury stock retirement resulted in reductions to common stock of $68,000, treasury stock of $297.8 million, and retained earnings of $297.7 million. A total of 15,442,007 shares of treasury stock have been retired to date. There was no effect on the total stockholders’ equity position as a result of the retirement.

On May 1, 2012, the Company’s Board of Directors approved a two-for-one split of the Company’s common stock to be effected in the form of a stock dividend. As a result of this action, one additional share was issued on June 18, 2012 for each share held by stockholders of record at the close of business on May 31, 2012. The stock split did not have an impact on the Company’s consolidated financial position or results of operations. Share and per share amounts presented in the accompanying consolidated financial statements for dates before June 18, 2012 have been restated to reflect the impact of the stock split.

Note 17. Subsequent events

On October 1, 2012, the Company purchased ActiveStrategy Inc., a Philadelphia-based performance improvement technology and consulting firm with unmatched solutions for tracking and augmenting organizational effectiveness, for a purchase price of $15.2 million. The total purchase price consists of an initial payment of $12.9 million and an additional $2.3 million which has been placed into escrow and which will be released if specified indemnity conditions are satisfied.

On October 31, 2012, the Company transferred 112,408 shares of its common stock to the former owners of Southwind to satisfy the component of the Southwind earn-out payable in the Company’s common stock.

16

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Unless the context indicates otherwise, references in this report to the “Company,” the “registrant,” “we,” “our,” and “us” mean The Advisory Board Company and its subsidiaries.

Our fiscal year ends on March 31. Fiscal 2013 is our fiscal year ending on March 31, 2013.

On June 18, 2012, the Company completed a two-for-one split of its outstanding shares of common stock in the form of a stock dividend. Each stockholder of record received one additional share of common stock for each share of common stock owned at the close of business on May 31, 2012. Share numbers and per share amounts presented below for dates before June 18, 2012 have been restated to reflect the impact of the stock split.

This management’s discussion and analysis of financial condition and results of operations includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as “may,” “will,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” or “intends” and similar expressions. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the results, performance, or achievements expressed or implied by the forward-looking statements, including the factors discussed under “Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended March 31, 2012, or the “2012 Form 10-K,” filed with the Securities and Exchange Commission, or “SEC,” and in our subsequent SEC reports. We undertake no obligation to update any forward-looking statements, whether as a result of circumstances or events that arise after the date the statements are made, new information, or otherwise.

Executive Overview

We provide best practices research and analysis, business intelligence and software tools, and management and advisory services to approximately 3,700 organizations, including hospitals, health systems, pharmaceutical and biotech companies, health care insurers, medical device companies, colleges, universities, and other educational institutions through discrete programs. Members of each program typically are charged a fixed fee and have access to an integrated set of services that may include best practice research studies, executive education seminars, customized research briefs, web-based access to the program’s content database, and software tools.

Our three key areas of focus for fiscal 2013 are to continue to deliver world-class programs that drive significant returns for our members and ensure member loyalty through outstanding value delivery; to make select investments to capture the unique opportunities presented by current health care market conditions, through developing and launching new programs and acquiring products, services, and technologies that improve performance of our members; and to attract, develop, engage, and retain world-class talent across our organization. Success in all of these areas requires very strong execution across our business, and we have an intense focus on setting up each team to manage against and attain high goals in each area of our operations.

Our membership business model allows us to create value for our members by providing proven solutions to common and complex problems as well as quality content on a broad set of relevant issues. Our growth has been driven by strong renewal rates, ongoing addition of new memberships in our existing programs, continued new program launches, acquisition activity, and continued annual price increases. We believe high renewal rates are a reflection of our members’ recognition of the value they derive from participating in our programs. Our revenue grew 25.4% in the six months ended September 30, 2012 over the prior year period. Our contract value increased 19.7% to $435.1 million as of September 30, 2012 from $363.6 million as of September 30, 2011. We define contract value as the aggregate annualized revenue attributed to all agreements in effect at a particular date, without regard to the initial term or remaining duration of any such agreement.

Our operating costs and expenses consist of cost of services, member relations and marketing, general and administrative expenses, and depreciation and amortization expenses. Cost of services includes the costs associated with the production and delivery of our products and services, consisting of compensation for research personnel, in-house faculty, software developers, and consultants; the organization and delivery of membership meetings, teleconferences, and other events; production of published materials; technology license fees; and costs of developing and supporting our web-based content and software tools. Member relations and marketing includes the costs of acquiring new members and the costs of account management, consisting of compensation, including sales incentives; travel and entertainment expenses; training of personnel; sales and marketing materials; and associated support services. General and administrative expenses include the costs of human resources and recruiting; finance and accounting; management information systems; facilities management; new program development; and other administrative functions. Depreciation and amortization expense includes the cost of depreciation of our property and equipment, amortization of costs associated with the development of software and tools that are offered as part of certain of our membership programs, and amortization of acquired developed technology. Included in our operating costs for each period presented are stock-based compensation expenses and expenses representing additional payroll taxes for compensation expense as a result of the taxable income employees recognized upon the exercise of common stock options and the vesting of restricted stock units.

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Acquisitions and dispositions that we have completed since April 1, 2011 affect the comparability of our results of operations for the three and six months ended September 30, 2012 and our results of operations for the same periods in our prior fiscal year, although the effect is not material.

Critical Accounting Policies

Our accounting policies, which are in compliance with U.S. generally accepted accounting principles, or “GAAP,” require us to apply methodologies, estimates, and judgments that have a significant impact on the results we report in our financial statements. In our 2012 Form 10-K, we have discussed those material accounting policies that we believe are critical and require the use of complex judgment in their application. There have been no material changes to our policies since our last fiscal year ended March 31, 2012.

Non-GAAP Financial Presentation

This management’s discussion and analysis presents supplemental measures of our performance which are derived from our consolidated financial information but which are not presented in our consolidated financial statements prepared in accordance with GAAP. These financial measures, which are considered “non-GAAP financial measures” under SEC rules, are referred to as adjusted EBITDA, adjusted net income, and non-GAAP earnings per diluted share. See “Non-GAAP Financial Measures” below for definitions of such non-GAAP financial measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

Results of Operations

The following table shows statements of income data expressed as a percentage of revenue for the periods indicated:

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Revenue		100.0	%		100.0	%		100.0	%		100.0	%
Costs and expenses:
Cost of services, excluding depreciation and amortization		51.5	%		54.4	%		53.7	%		54.2	%
Member relations and marketing		19.4	%		20.2	%		18.9	%		21.2	%
General and administrative		14.1	%		13.0	%		13.5	%		13.2	%
Depreciation and amortization		4.0	%		3.8	%		4.0	%		3.8	%
Total costs and expenses		89.0	%		91.4	%		90.1	%		92.4	%
Operating income		11.0	%		8.6	%		9.9	%		7.6	%
Other income, net		0.6	%		0.5	%		0.6	%		0.7	%
Income from continuing operations before provision for income taxes and equity in loss of unconsolidated entity		11.7	%		9.0	%		10.5	%		8.3	%
Provision for income taxes		(4.5	%)		(3.4	%)		(4.0	%)		(3.1	%)
Equity in loss of unconsolidated entity		(0.5	%)		—			(1.3	%)		—
Net income from continuing operations		6.7	%		5.7	%		5.2	%		5.2	%
Discontinued operations:
Net income from discontinued operations		—			—			—			0.1	%
Net income before allocation to noncontrolling interest		6.7	%		5.7	%		5.2	%		5.3	%
Net loss attributable to noncontrolling interest		0.1	%		—			0.1	%		—
Net income attributable to common stockholders		6.8	%		5.7	%		5.3	%		5.3	%

Three and six months ended September 30, 2012 compared to the three and six months ended September 30, 2011

Overview. Net income attributable to common stockholders increased to $7.5 million in the three months ended September 30, 2012 from $5.2 million in the three months ended September 30, 2011. The increase in net income was primarily attributable to a 21.1% increase in revenue during the three months ended September 30, 2012, the effect of which was partially offset

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by increases of $7.2 million in cost of services incurred for new and growing programs, increases of $3.0 million in marketing and member relations due to increased sales teams, increases of $3.7 million in general and administrative expenses related to increases in finance, information technology, and human resources expense incurred to support our growing employee base, increases of $0.9 million in depreciation and amortization, and our net $0.6 million loss from our investment in Evolent Health, Inc., or “Evolent,” which we established in the second quarter of fiscal 2012. Net income increased to $11.3 million in the six months ended September 30, 2012 from $9.1 million in the six months ended September 30, 2011. The increase in net income was primarily attributable to a 25.4% increase in revenue during the six months ended September 30, 2012, the effect of which was partially offset by increases of $22.4 million in cost of services incurred for new and growing programs, increases of $4.2 million in marketing and member relations due to increased sales teams, increases of $6.4 million in general and administrative expenses related to increases in finance, information technology, and human resources expense incurred to support our growing employee base, increases of $2.1 million in depreciation and amortization, and our net $2.7 million loss from our investment in Evolent.

Adjusted Net Income and Adjusted EBITDA. Adjusted net income increased 18.5% to $11.4 million in the three months ended September 30, 2012 from $9.6 million in the three months ended September 30, 2011, and adjusted EBITDA increased 22.6% to $20.8 million in the three months ended September 30, 2012 from $16.9 million in the three months ended September 30, 2011. Adjusted net income increased 25.8% to $22.5 million in the six months ended September 30, 2012 from $17.9 million in the six months ended September 30, 2011, and adjusted EBITDA increased 31.8% to $40.9 million in the six months ended September 30, 2012 from $31.1 million in the six months ended September 30, 2011. The increases in adjusted net income and adjusted EBITDA were due to increased revenue, the effect of which was partially offset by the costs of new and growing programs, increased investment in our general and administrative infrastructure to support our growing employee base, and an increase in the number of new sales teams.

Revenue. Total revenue increased 21.1% to $110.8 million in the three months ended September 30, 2012 from $91.5 million in the three months ended September 30, 2011, while contract value increased 19.7% to $435.1 million as of September 30, 2012 from $363.6 million as of September 30, 2011. Total revenue increased 25.4% to $214.9 million in the six months ended September 30, 2012 from $171.4 million in the six months ended September 30, 2011. The increases in revenue and contract value were primarily attributable to the introduction and expansion of new programs, including our August 1, 2011 acquisition of PivotHealth, LLC, or “PivotHealth,” our cross-selling of existing programs to existing members, and, to a lesser degree, price increases. We offered 54 membership programs as of September 30, 2012 and 51 membership programs as of September 30, 2011.

Cost of services. Cost of services increased to $57.0 million in the three months ended September 30, 2012 from $49.8 million in the three months ended September 30, 2011. Cost of services increased to $115.4 million in the six months ended September 30, 2012 from $92.9 million in the six months ended September 30, 2011. The increases in cost of services for the three and six months ended September 30, 2012 were primarily due to growth and expansion of our Crimson and Southwind programs, including our 2011 acquisition of PivotHealth. Also affecting cost of services were costs associated with the delivery of program content and tools to our expanded membership base, including increased staffing, licensing fees, and other costs. As a percentage of revenue, cost of services was 51.5% and 54.4% for the three months ended September 30, 2012 and 2011, respectively, and 53.7% and 54.2% for the six months ended September 30, 2012 and 2011, respectively. As a percentage of revenue, cost of services decreased in the three and six months ended September 30, 2012 due to the scaling of our fixed cost infrastructure and, to a lesser extent, a decrease in fair value adjustments to our acquisition-related earn-out payments. Cost of services includes fair value adjustments to our acquisition-related earn-out liabilities of $2.3 million in the three months ended September 30, 2011, and $3.5 million and $5.5 million in the six months ended September 30, 2012 and 2011, respectively.

Member relations and marketing. Member relations and marketing expense increased 16.2% to $21.5 million in the three months ended September 30, 2012 from $18.5 million in the three months ended September 30, 2011. As a percentage of revenue, member relations and marketing expense in the three months ended September 30, 2012 and 2011 was 19.4% and 20.2%, respectively. Member relations and marketing expense increased 11.6% to $40.6 million in the six months ended September 30, 2012 from $36.4 million in the six months ended September 30, 2011. As a percentage of revenue, member relations and marketing expense in the six months ended September 30, 2012 and 2011 was 18.9% and 21.2%, respectively. The increases in member relations and marketing expense were primarily attributable to an increase in sales staff and related travel and other associated costs, as well as to an increase in member relations personnel and related costs required to serve our expanding membership base. During the three months ended September 30, 2012 and 2011, we had an average of 167 and 145 new business development teams, respectively.

General and administrative. General and administrative expense increased to $15.6 million in the three months ended September 30, 2012 from $11.9 million in the three months ended September 30, 2011. As a percentage of revenue, general and administrative expense increased to 14.1% in the three months ended September 30, 2012 from 13.0% in the three months ended September 30, 2011. General and administrative expense increased to $29.1 million in the six months ended September 30, 2012 from $22.7 million in the six months ended September 30, 2011. As a percentage of revenue, general and administrative expense increased

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slightly to 13.5% in the six months ended September 30, 2012 from 13.2% in the six months ended September 30, 2011. The increases in general and administrative costs for the three and six months ended September 30, 2012 were primarily attributable to increased costs incurred to improve our finance, human resources, information technology, and facility operations infrastructure to support our growing employee base and number of office locations, increased legal and external advisory spending related to our new credit facility and acquisition activity, and an increase in share-based compensation.

Depreciation and amortization. Depreciation and amortization expense increased to $4.4 million, or 4.0% of revenue, in the three months ended September 30, 2012, from $3.5 million, or 3.8% of revenue, in the three months ended September 30, 2011. Depreciation and amortization expense increased to $8.5 million, or 4.0% of revenue, in the six months ended September 30, 2012, from $6.5 million, or 3.8% of revenue, in the six months ended September 30, 2011. The increases in depreciation and amortization were primarily due to increased amortization expense from developed capitalized internal-use software tools, the PivotHealth acquisition in August 2011, and to a lesser extent, depreciation of our newly renovated Austin, Texas office and an expansion floor of our Washington, D.C. headquarters.

Other income, net. Other income, net increased to $0.7 million in the three months ended September 30, 2012 from $0.4 million in the three months ended September 30, 2011. Other income, net consists of interest income, interest expense, foreign exchange rate gains and losses, and losses on investment in common stock warrants. Higher average cash and investment balances contributed to an increase in interest income to $0.9 million in the three months ended September 30, 2012 from $0.6 million in the three months ended September 30, 2011. We recognized foreign exchange gains of $32,000 and foreign exchange losses of $0.1 million during the three months ended September 30, 2012 and 2011, respectively, as a result of the effect of fluctuating currency rates on our receivable balances denominated in foreign currencies. During the three months ended September 30, 2012, we recognized a $0.1 million loss on our investment in common stock warrants and $0.1 million in interest expense. Other income, net increased to $1.3 million in the six months ended September 30, 2012 from $1.2 million in the six months ended September 30, 2011. Higher average cash and investment balances contributed to an increase in interest income to $1.7 million in the six months ended September 30, 2012 from $1.1 million in the six months ended September 30, 2011. We recognized foreign exchange losses of $0.2 million and foreign exchange gains of $0.2 million during the six months ended September 30, 2012 and 2011, respectively, as a result of the effect of fluctuating currency rates on our receivable balances denominated in foreign currencies. During the six months ended September 30, 2012, we recognized a $0.1 million loss on our investment in common stock warrants and $0.1 million in interest expense.

Provision for income taxes. Our provision for income taxes was $4.9 million and $3.1 million in the three months ended September 30, 2012 and 2011, respectively. Our provision for income taxes was $8.6 million and $5.3 million in the six months ended September 30, 2012 and 2011, respectively. Our effective tax rate in the three and six months ended September 30, 2012 was 38.3% compared to 37.5% in the three and six months ended September 30, 2011. The increase in our effective tax rate for the three and six months ended September 30, 2012 was primarily due to the effect that higher estimated pre-tax income for fiscal year 2013, compared to our net income for fiscal year 2012, has on our effective rate when compared to the fixed nature of our Washington, D.C. tax credits that we receive under the New E-conomy Transformation Act of 2000. A slight increase in our effective state tax rate due to changes in apportionment factors also contributed to the increase in our effective tax rate.

Equity in loss of unconsolidated entity. Our proportionate share of the losses of Evolent during the three and six months ended September 30, 2012 were $1.7 million and $3.8 million, respectively, which were partially offset by a $1.1 million gain on investment recognized in connection with the dilution of our ownership percentage from 39% to 31% resulting from Evolent’s second round of Series A preferred stock financing completed in July 2012. We did not recognize comparable losses in the prior year periods, as Evolent was formed on August 31, 2011.

Income from discontinued operations, net of tax. On January 20, 2012, we sold substantially all of the assets of our OptiLink business. As a result, the net income generated by OptiLink in the three and six months ended September 30, 2011 has been presented as discontinued operations.

Stock-based compensation expense. We recognized the following stock-based compensation expense in the consolidated statements of income line items for stock options and restricted stock units (“RSUs”) issued under our stock incentive plans for the three and six months ended September 30, 2012 (in thousands, except per share amounts):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Stock-based compensation expense included in:
Costs and expenses:
Cost of services	$	989	$	847	$	1,993	$	1,690
Member relations and marketing		658		511		1,336		1,012
General and administrative		1,758		1,442		3,582		2,813

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	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Depreciation and amortization		—			—			—			—
Total costs and expenses		3,405			2,800			6,911			5,515
Income from operations		(3,405	)		(2,800	)		(6,911	)		(5,515	)
Net income	$	(2,101	)	$	(1,750	)	$	(4,264	)	$	(3,447	)
Impact on diluted earnings per share	$	0.06		$	0.05		$	0.12		$	0.10

There are no stock-based compensation costs capitalized as part of the cost of an asset.

As of September 30, 2012, $31.0 million of total unrecognized compensation cost related to outstanding options and non-vested RSUs was expected to be recognized over a weighted average period of 1.5 years.

Non-GAAP Financial Measures

The tables below present information for the periods indicated about our adjusted EBITDA, adjusted net income, and non-GAAP earnings per diluted share. We define “adjusted EBITDA” as net income attributable to common stockholders before provision for income taxes from continuing operations; other income, net, which includes interest income and expense, gains and losses on investment in common stock warrants, and foreign currency losses and gains; depreciation and amortization; equity in loss of unconsolidated entity and related gains or losses associated with the underlying investments; discontinued operations, net of tax; acquisition and similar transaction charges; fair value adjustments to acquisition-related earn-out liabilities; and share-based compensation expense. We define “adjusted net income” as net income attributable to common stockholders excluding, net of tax effect, equity in loss of unconsolidated entity and related gains or losses associated with the underlying investments; discontinued operations; gains and losses on investments in common stock warrants; amortization of acquisition-related intangibles; acquisition and similar transaction charges; fair value adjustments to acquisition-related earn-out liabilities; and share-based compensation expense. We define “non-GAAP earnings per diluted share” as earnings per diluted share excluding, net of tax effect, equity in loss of unconsolidated entity and related gains or losses associated with the underlying investments; discontinued operations; gains and losses on investments in common stock warrants; amortization of acquisition-related intangibles; acquisition and similar transaction charges; fair value adjustments to acquisition-related earn-out liabilities; and share-based compensation expense. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Presentation” in our 2012 Form 10-K for our reasons for including these financial measures in this report and for a description of material limitations with respect to the usefulness of such measures. A reconciliation of adjusted EBITDA, adjusted net income, and non-GAAP earnings per diluted share to the most directly comparable GAAP financial measures is provided below (in thousands, except per share data).

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Net income attributable to common stockholders	$	7,481		$	5,203		$	11,322		$	9,074
Equity in loss of unconsolidated entity		592			—			2,716			—
Provision for income taxes from continuing operations		4,944			3,104			8,646			5,327
Discontinued operations, net of tax		—			(30	)		—			(195	)
Other income, net		(688	)		(448	)		(1,264	)		(1,245	)
Depreciation and amortization		4,430			3,503			8,516			6,450
Acquisition and similar transaction charges		599			504			599			648
Fair value adjustments to acquisition-related earn-out liabilities		—			2,300			3,500			5,500
Share-based compensation expense		3,405			2,800			6,911			5,515
Adjusted EBITDA	$	20,763		$	16,936		$	40,946		$	31,074

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	Three Months Ended September 30,					Six Months Ended September 30,
	2012		2011			2012		2011
Net income attributable to common stockholders	$	7,481	$	5,203		$	11,322	$	9,074
Equity in loss of unconsolidated entity		592		—			2,716		—
Discontinued operations, net of tax		—		(30	)		—		(195	)
Amortization of acquisition-related intangibles, net of tax		790		949			1,581		1,699
Acquisition and similar transaction charges, net of tax		370		315			370		405
Fair value adjustments to acquisition-related earn-out liabilities, net of tax		—		1,437			2,160		3,438
Loss on investment in common stock warrants, net of tax		68		—			68		—
Share-based compensation, net of tax		2,101		1,750			4,264		3,447
Adjusted net income	$	11,402	$	9,624		$	22,481	$	17,868

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
GAAP earnings per diluted share	$	0.21	$	0.15	$	0.31	$	0.27
Equity in loss of unconsolidated entity		0.01		—		0.08		—
Discontinued operations, net of tax		—		—		—		—
Amortization of acquisition-related intangibles, net of tax		0.02		0.03		0.04		0.05
Acquisition and similar transaction charges, net of tax		0.01		0.01		0.01		0.01
Fair value adjustments to acquisition-related earn-out liabilities, net of tax		—		0.04		0.06		0.10
Loss on investment in common stock warrants, net of tax		—		—		—		—
Share-based compensation, net of tax		0.06		0.05		0.12		0.10
Non-GAAP earnings per diluted share	$	0.31	$	0.28	$	0.62	$	0.53

Liquidity and Capital Resources

Cash flows generated from operating activities are our primary source of liquidity. We believe that existing cash, cash equivalents, and marketable securities balances and operating cash flows will be sufficient to support operating and capital expenditures, as well as share repurchases, during at least the next 12 months. We had cash, cash equivalents, and marketable securities balances of $227.8 million and $188.1 million as of September 30, 2012 and March 31, 2012, respectively. We expended $8.0 million and $2.3 million in cash to purchase shares of our common stock through our share repurchase program during the six months ended September 30, 2012 and 2011, respectively. We have no long-term indebtedness.

Cash flows from operating activities. The combination of revenue growth, profitable operations, and payment for memberships in advance of accrual revenue typically results in operating activities that generate cash flows in excess of net income on an annual basis. Cash flows from operating activities fluctuate from quarter to quarter based on the timing of new and renewal contracts as well as certain expenses, and the first quarter of our fiscal year typically provides the lowest quarterly cash flows from operations. Net cash flows provided by operating activities were $42.1 million in the six months ended September 30, 2012, compared to net cash flows provided by operating activities of $37.0 million in the six months ended September 30, 2011. The increase in net cash flows provided by operating activities during the current period was primarily due to an increase in adjusted net income.

Cash flows from investing activities. Our cash management and investment strategy and capital expenditure programs affect investing cash flows. Net cash flows used in investing activities were $37.1 million and $38.9 million in the six months ended September 30, 2012 and 2011, respectively. Investing activities during the six months ended September 30, 2012 consisted of the net purchases of marketable securities of $19.7 million, capital expenditures of $16.3 million, and acquisition-related earn-out payments of $1.2 million. Investing activities during the six months ended September 30, 2011 consisted of $16.8 million used in our acquisition of PivotHealth, our initial capital contribution of $10.0 million to Evolent, and capital expenditures of $14.9 million, the effects of which were partially offset by net proceeds on the redemption and purchases of marketable securities of $2.8 million.

Cash flows from financing activities. We had net cash flows provided by financing activities of $14.3 million and $7.8 million in the six months ended September 30, 2012 and 2011, respectively. Financing activities during the six months ended September 30, 2012 primarily consisted of $16.2 million from the issuance of common stock upon the exercise of stock options and $9.7 million in additional tax benefits related to share-based compensation arrangements, offset in part by the repurchase of shares under our repurchase program. Financing activities during the six months ended September 30, 2011 primarily consisted of $13.1 million from the issuance of common stock upon the exercise of stock options, offset in part by share repurchase activity. We repurchased 155,972 shares at a total cost of approximately $8.0 million and 167,280 shares at a total cost of approximately $4.7

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million in the six months ended September 30, 2012 and 2011, respectively, pursuant to our share repurchase program. In the six months ended September 30, 2012 and 2011, we withheld $3.8 million and $1.3 million in shares, respectively, to satisfy the minimum employee tax withholding for certain vested restricted stock units.

Revolving credit facility. On July 30, 2012, we obtained a $150.0 million five-year senior secured revolving credit facility under a credit agreement, dated as of July 30, 2012, with the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party thereto.

Under the revolving credit facility, up to $150.0 million principal amount of borrowings and other credit extensions may be outstanding at any time. The facility loans may be borrowed, repaid and reborrowed from time to time during the term of the facility and will mature and be payable in full on July 30, 2017. At our election, and upon our satisfaction of specified conditions, the maximum principal amount available under the credit agreement may be increased by up to an additional $50.0 million in minimum increments of $10.0 million, which may be made available by increasing the revolving loan commitments or by our entry into one or more tranches of term loans. The credit agreement contains a sublimit for up to $5.0 million principal amount of swing line loans outstanding at any time and a sublimit for the issuance of up to $10.0 million of letters of credit outstanding at any time.

The revolving credit facility was undrawn at the facility closing date of July 30, 2012. As of the date of this report, there were no amounts outstanding under the credit facility and $150.0 million was available for borrowing thereunder. We may use the proceeds of borrowings under the facility, when drawn, to finance working capital needs and for general corporate purposes, including permitted acquisitions.

Amounts drawn under the revolving credit facility generally will bear interest at an annual rate calculated, at our option, on the basis of either (a) an alternate base rate plus the applicable margin for alternate base rate loans under the credit agreement, which ranges from 0.75% to 1.50% based on our total leverage ratio, or (b) an adjusted LIBO rate plus the applicable margin for eurocurrency loans under the credit agreement, which ranges from 1.75% to 2.50% based on our total leverage ratio. We are required to pay a commitment fee on the unutilized portion of the facility at an annual rate of between 0.25% and 0.40% based on our total leverage ratio. The interest rate on the alternate base rate loans will fluctuate as the base rate fluctuates, while the interest rate on the eurocurrency loans will be adjusted at the end of each applicable interest period. At the facility closing date, the applicable margin for alternate base rate loans was 0.75% and the applicable margin for eurocurrency loans was 1.75%. Interest on alternate base rate loans will be payable quarterly in arrears, while interest on eurocurrency loans will be payable at the end of each applicable interest period, which may be one, two, three or six months, except that, in the case of a six-month interest period, interest will be payable at the end of each three-month period.

The Advisory Board Company is the borrower under the revolving credit facility. All of The Advisory Board Company’s obligations under the facility are and will be guaranteed by certain of our existing and future domestic subsidiaries. Our obligations and the obligations of each subsidiary guarantor under the facility are and will be secured by first-priority liens on, and first-priority security interests in, substantially all of our assets, including a pledge of some or all of the capital stock of each of our domestic subsidiaries held by such loan party.

The revolving credit facility contains customary negative covenants restricting certain actions that may be taken by us and our subsidiaries. Subject to specified exceptions, these covenants limit our ability and the ability of our subsidiaries to incur indebtedness, create liens on their assets, pay cash dividends, repurchase our common stock and make other restricted payments, make investments or loans to other parties, sell assets, engage in mergers and acquisitions, enter into transactions with affiliates, and change their business. The facility also contains customary affirmative covenants, including, among others, covenants requiring compliance with laws, maintenance of corporate existence, licenses, properties and insurance, payment of taxes and performance of other material obligations, and delivery of financial and other information to the lenders under the credit agreement.

We are required under the credit agreement to satisfy the following three financial ratios, each of which will be measured for us and our subsidiaries on a consolidated basis as of the end of each fiscal quarter for the period beginning with the quarter ended September 30, 2012 and ending after four consecutive fiscal quarters the end of each such fiscal quarter:

• a maximum total leverage ratio, under which the ratio of consolidated total indebtedness to consolidated earnings before interest, taxes, depreciation, amortization and other items specified in the credit agreement (“EBITDA”) may not be greater than 3.50 to 1.00;

• a maximum senior secured leverage ratio, under which the ratio of consolidated total secured indebtedness to consolidated EBITDA may not be greater than 2.50 to 1.00; and

• a minimum interest coverage ratio, under which the ratio of consolidated EBITDA to consolidated interest expense may not be less than 3.00 to 1.00.

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Consolidated EBITDA as defined in the credit agreement currently is not computed, and in the future may not be computed, in the same manner in which we define “adjusted EBITDA” from time to time for purposes of reports we file with the SEC and present in our other publicly available financial disclosures.

We were in compliance with these covenants as of September 30, 2012.

Contractual Obligations

Our 2012 Form 10-K discloses certain commitments and contractual obligations that existed as of March 31, 2012. Our December 2009 acquisition of Southwind Health Partners, L.L.C. and Southwind Navigator, LLC included a contingent obligation to make additional cash and/or common stock payments if certain milestones were met. As of September 30, 2012, based on current facts and circumstances, we have increased the estimated aggregate fair value of this contingent obligation to $18.4 million, which will be paid at various intervals, if earned, over evaluation periods beginning on the acquisition date and extending through December 31, 2014. As of September 30, 2012, $3.1 million has been earned and paid to the former owners.

Our February 2011 acquisition of substantially all of the assets of Cielo MedSolutions, LLC, or “Cielo” included a contingent obligation to make additional cash payments if certain milestones were met. As of September 30, 2012, based on current facts and circumstances, we have estimated the aggregate fair value of the remaining contingent obligation at $1.4 million, which will be paid at various intervals if certain subscription milestones are met over the evaluation periods. As of September 30, 2012, the portion of the contingent payments relating to the product development milestones had been finalized and a total of approximately $3.0 million had been earned and paid to the former owner of the Cielo business.

Our August 2011 acquisition of PivotHealth included a contingent obligation to make additional cash payments if certain revenue targets were achieved over evaluation periods beginning at the acquisition date and extending through December 31, 2014. As of September 30, 2012, the estimated aggregate fair value of the contingent obligation for PivotHealth was $2.8 million.

Off-Balance Sheet Arrangements

As of September 30, 2012, we had no off-balance sheet financing or other arrangements with unconsolidated entities or financial partnerships (such as entities often referred to as structured finance or special purpose entities) established for purposes of facilitating off-balance sheet financing or other debt arrangements or for other contractually limited purposes.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest rate risk. We are exposed to interest rate risk primarily through our portfolio of cash, cash equivalents, and marketable securities, which is designed for safety of principal and liquidity. Cash and cash equivalents include investments in highly liquid U.S. Treasury obligations with maturities of less than three months. As of September 30, 2012, our marketable securities consisted of $118.2 million in tax-exempt notes and bonds issued by various states and $29.7 million in U.S. government-sponsored enterprise securities. The weighted average maturity on all our marketable securities as of September 30, 2012 was approximately 5.8 years. We perform periodic evaluations of the relative credit ratings related to our cash, cash equivalents, and marketable securities. Our portfolio is subject to inherent interest rate risk as investments mature and are reinvested at current market interest rates. We currently do not use derivative financial instruments to adjust our portfolio risk or income profile. Because of the nature of our investments, we have not prepared quantitative disclosure for interest rate sensitivity in accordance with Item 305 of the SEC’s Regulation S-K, as we believe the effect of interest rate fluctuations would not be material.

Foreign currency risk. Our international operations, which account for approximately 3% of our revenue, subject us to risks related to currency exchange fluctuations. Prices for our services sold to members located outside the United States are sometimes denominated in local currencies (primarily British Pound Sterling). As a consequence, increases in the value of the U.S. dollar against local currencies in countries where we have members would result in a foreign exchange loss recognized by us. We recorded foreign currency exchange gains of $32,000 during the three months ended September 30, 2012 and losses of $0.2 million during the six months ended September 30, 2012, which are included in other income, net in our consolidated statements of income. In the three and six months ended September 30, 2011, we recorded foreign currency exchange losses of $0.1 million and gains of $0.2 million, respectively. A hypothetical 10% change in foreign currency exchange rates would not have had a material impact on our financial position as of September 30, 2012.

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Item 4. Controls and Procedures.

Our Chief Executive Officer, or “CEO,” and Chief Financial Officer, or “CFO,” have evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this quarterly report as required by Rule 13a-15(b) or 15d-15(b) under the Exchange Act.

Our management, including our CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Based on their evaluation, such officers have concluded that, as of the end of the period covered by this quarterly report, our disclosure controls and procedures were effective.

During the period covered by this quarterly report, there have been no changes to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1A. Risk Factors.

As discussed in this report, our actual results could differ materially from the results expressed or implied in our forward-looking statements. There have been no material changes in our risk factors from those described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2012 and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

In January 2004, our board of directors authorized the repurchase by us from time to time of up to $50 million of our common stock. That authorization was increased in cumulative amount to $100 million in October 2004, to $150 million in February 2006, to $200 million in January 2007, to $250 million in July 2007, and to $350 million in April 2008. All repurchases have been made in the open market pursuant to this publicly announced repurchase program. No minimum number of shares has been fixed, and the share repurchase authorization has no expiration date. A summary of the share repurchase activity for our second quarter of fiscal 2013 follows:

	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan
July 1 to July 31, 2012		—	$	—		—	$	24,091,298
August 1 to August 31, 2012		66,818	$	42.27		66,818	$	21,266,640
September 1 to September 30, 2012		47,572	$	45.73		47,572	$	19,091,319
Total		114,390	$	43.71		114,390

As of September 30, 2012, we had repurchased a total of 15,442,007 shares under our repurchase program since the program’s inception.

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Item 6. Exhibits.

(a) Exhibits:

3.1	Restated Certificate of Incorporation of The Advisory Board Company.
10.1	Credit Agreement, dated as of July 30, 2012, among the Company, the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and the other agents party thereto. Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on August 3, 2012.
10.2	Guaranty, dated as of July 30, 2012, by Advisory Board Investments, Inc. in favor of the Administrative Agent. Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on August 3, 2012.
10.3	Pledge and Security Agreement, dated as of July 30, 2012, among the Company, Advisory Board Investments, Inc., and the Administrative Agent. Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the Commission on August 3, 2012.
31.1	Certification of the Chief Executive Officer pursuant to Rule13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of the Chief Financial Officer pursuant to Rule13a-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certifications pursuant to 18 U.S.C. Section 1350.
*101	XBRL (Extensible Business Reporting Language). The following materials from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2012, formatted in XBRL: (i) Consolidated Balance Sheets as of September 30, 2012 (unaudited) and March 31, 2012, (ii) Unaudited Consolidated Statements of Income for the Three and Six Months Ended September 30, 2012 and 2011, (iii) Unaudited Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2012 and 2011, (iv) Unaudited Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2012 and 2011, and (iv) Notes to Unaudited Consolidated Financial Statements.

* As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE ADVISORY BOARD COMPANY
Date: November 9, 2012	By:	/s/ Michael T. Kirshbaum
		Michael T. Kirshbaum
		Chief Financial Officer and Treasurer
		(Duly Authorized Officer)

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INDEX TO EXHIBITS

Exhibit Number	Description of Exhibit
3.1	Restated Certificate of Incorporation of The Advisory Board Company.
31.1	Certification of the Chief Executive Officer pursuant to Rule13a-14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification of the Chief Financial Officer pursuant to Rule13a-14(a) of the Securities Exchange Act of 1934, as amended
32.1	Certifications pursuant to 18 U.S.C. Section 1350
10.1	Credit Agreement, dated as of July 30, 2012, among the Company, the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and the other agents party thereto. Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on August 3, 2012.
10.2	Guaranty, dated as of July 30, 2012, by Advisory Board Investments, Inc. in favor of the Administrative Agent. Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on August 3, 2012.
10.3	Pledge and Security Agreement, dated as of July 30, 2012, among the Company, Advisory Board Investments, Inc., and the Administrative Agent. Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the Commission on August 3, 2012.
*101	XBRL (Extensible Business Reporting Language). The following materials from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2012, formatted in XBRL: (i) Consolidated Balance Sheets as of September 30, 2012 (unaudited) and March 31, 2012, (ii) Unaudited Consolidated Statements of Income for the Three and Six Months Ended September 30, 2012 and 2011, (iii) Unaudited Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2012 and 2011, (iv) Unaudited Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2012 and 2011, and (iv) Notes to Unaudited Consolidated Financial Statements.

* As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

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EX-3.1

Exhibit 3.1

RESTATED CERTIFICATE OF INCORPORATION OF

THE ADVISORY BOARD COMPANY

(Originally incorporated August 9, 2001)

The Advisory Board Company was originally incorporated under the name “ABC MERGE CO.” This Restated Certificate of Incorporation was duly adopted by the corporation’s Board of Directors effective as of September 11, 2012 in accordance with Section 245 of the General Corporation Law of the State of Delaware. It only restates and integrates, and does not further amend, the provisions of the corporation’s Certificate of Incorporation (which was originally filed with the Secretary of State of the State of Delaware on August 9, 2001), as such Certificate of Incorporation has theretofore been restated, amended or supplemented. There is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

FIRST: Name. The name of the corporation (hereinafter referred to as the “Corporation”) is The Advisory Board Company.

SECOND: Registered Office and Registered Agent. The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The name of the registered agent of the Corporation at such address is The Corporation Trust Company.

THIRD: Purpose. The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FOURTH: Capitalization.

The total number of shares of all classes of stock which the Corporation shall have authority to issue is one hundred forty million (140,000,000) shares, consisting of one hundred thirty-five million (135,000,000) shares of Common Stock (“Common Stock”), par value $0.01 per share, and five million (5,000,000) shares of Preferred Stock (“Preferred Stock”), par value $0.01 per share.

The designations, preferences, qualifications, limitations, restrictions and the special or relative rights granted to or imposed upon the Common Stock and the Preferred Stock of the Corporation are as follows:

(a) Provisions Relating to the Common Stock

(1) Voting. Except as otherwise expressly required by law or provided in this Certificate of Incorporation, and subject to any voting rights provided to holders of Preferred Stock at any time outstanding, at each annual or special meeting of stockholders, each holder of record of shares of Common Stock on the relevant record date shall be entitled to cast one vote in person or by proxy for each share of the Common Stock standing in such holder’s name on the stock transfer records of the Corporation. There shall be no cumulative voting. The number of

authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the Delaware General Corporation Law.

(2) Dividends. Subject to the rights of the holders of Preferred Stock at any time outstanding, and subject to any other provisions of this Certificate of Incorporation, as it may be amended from time to time, holders of shares of Common Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation when, as and if declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor.

(3) Liquidation, Dissolution, etc. In the event of any liquidation, dissolution or winding up (either voluntary or involuntary) of the Corporation, the holders of shares of Common Stock shall be entitled to receive the assets and funds of the Corporation available for distribution after payments to creditors and to the holders of any Preferred Stock of the Corporation that may at the time be outstanding, in proportion to the number of shares held by them.

(4) No Preemptive, Subscription or Conversion Rights. No holder of shares of Common Stock shall be entitled to preemptive, subscription or conversion rights.

(b) Provisions Relating to the Preferred Stock

The Board of Directors is hereby expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix for each such class or series such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such class or series, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at such time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series; (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; or (iv) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions.

(c) Provisions Relating to Limitation on Stockholder Rights Plan

Notwithstanding any other powers set forth in this Certificate of Incorporation, the Board of Directors shall not adopt a stockholders “rights plan” (which for this purpose shall mean any arrangement pursuant to which, directly or indirectly, capital stock purchase rights may be distributed to stockholders that provide all stockholders, other than persons who meet certain criteria specified in the arrangement, the right to purchase the capital stock at less than the

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prevailing market price of such capital stock), unless (i) such rights plan is ratified by the affirmative vote of a majority of the votes cast of the capital stock of the Corporation then outstanding and entitled to vote on the election of directors and present in person or represented by proxy at the next meeting (annual or special) of stockholders; (ii) by its terms, such rights plan expires within thirty-seven (37) months from the date of its adoption, unless extended by the affirmative vote of a majority of the voting power of the shares of capital stock of the Corporation then entitled to vote at an election of directors; and (iii) at any time the rights issued thereunder will be redeemed by the Corporation upon the affirmative vote of a majority of the voting power of the shares of capital stock of the Corporation then entitled to vote at an election of directors.

FIFTH: Amendment of Bylaws. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind the Bylaws of the Corporation.

SIXTH: Powers of the Corporation and of its Directors and Stockholders.

The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

(a) Management of the Corporation

The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

(b) Directors

(1) The number of directors which shall constitute the whole Board of Directors shall be determined by resolution of a majority of the Board of Directors, but in no event shall be less than one. The number of directors may be decreased at any time and from time to time by a majority of the directors then in office, but only to eliminate vacancies existing by reason of death, resignation, removal or expiration of the term of one or more directors.

(2) A director shall hold office until the succeeding annual meeting (or special meeting in lieu thereof) and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office.

(3) (i) Directors may be removed with or without cause by a vote of the holders of shares entitled to vote at an election of directors at a duly called meeting of such holders, provided that no director shall be removed for cause except by the affirmative vote of not less than a majority of the voting power of the shares then entitled to vote at an election of directors.

(ii) Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation applicable thereto.

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(4) Any vacancy in the Board of Directors, however occurring, including a vacancy resulting from an enlargement of the Board, may be filled only by a vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office, if applicable, and a director chosen to fill a position resulting from an increase in the number of directors shall hold office until the next annual meeting (or special meeting in lieu thereof) and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office.

(5) Elections of directors need not be by written ballot unless the bylaws of the corporation shall so provide.

(c) Stockholders

(1) Following the consummation of a public offering of the capital stock of the Corporation that is subject to an effective registration statement under the Securities Act, no action required to be taken or which may be taken at any annual or special meeting of the stockholders of the Corporation may be taken without a meeting, and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied.

(2) Special meetings of stockholders of the Corporation may be called by the Board of Directors pursuant to a resolution adopted by a majority of the directors then serving, by the Chairman of the Board, or by any holder or holders of at least forty percent (40%) of the outstanding shares of capital stock of the Corporation then entitled to vote on any matter for which the respective special meeting is being called.

(3) Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of the Corporation may be kept (subject to any provision contained in the Delaware General Corporation Law) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation.

SEVENTH: Duration. The duration of the Corporation shall be perpetual.

EIGHTH: Section 203. Pursuant to Section 203(b)(1) of the Delaware General Corporation Law, the Corporation hereby expressly opts not to be governed by Section 203 of the Delaware General Corporation Law.

NINTH: Liability and Indemnification.

(a) Liability.

A director of the Corporation shall not be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders,

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(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation Law is amended after approval by the stockholders of this Article Ninth to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. Any repeal or modification of this Article Ninth by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

(b) Indemnification.

(1) Each person who was or is made a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”) (including an action by or in the right of the Corporation), by reason of the fact that he is or was serving as a director or officer of the Corporation (or is or was serving at the request of the Corporation in a similar capacity with another entity, including employee benefit plans), shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law. This indemnification will cover all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and settlement amounts) reasonably incurred by the director in connection with a proceeding. All such indemnification shall continue as to a director or officer who has ceased to be a director or officer and shall continue to the benefit of such director’s or officer’s heirs, executors and administrators. Except as provided in paragraph (b)(2) of this Article Ninth with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such director or officer who initiates a proceeding only if such proceeding was authorized by the Board of Directors of the Corporation. The right to indemnification conferred by this Article Ninth shall be a contract right and may include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”). If the Delaware General Corporation Law requires, an advancement of expenses incurred by a director or officer in his capacity as a director or officer shall be made only upon delivery to the Corporation of an undertaking by such director or officer to repay all amounts so advanced if it is ultimately determined by final judicial decision that such director or officer is not entitled to be indemnified for such expenses under this Article Ninth or otherwise (hereinafter an “undertaking”).

(2) If a claim under paragraph (b)(1) of this Article Ninth is not paid in full by the Corporation within ninety days after receipt of a written claim, the director or officer may bring suit against the Corporation to recover the unpaid amount. (In the case of a claim for advancement of expenses, the applicable period will be twenty days.) If successful in any such suit, the director or officer will also be entitled to be paid the expense of prosecuting such suit. In any suit brought by the director or officer to enforce a right to indemnification hereunder (but not in a suit brought by the director or officer to enforce a right to an advancement of expenses), it shall be a defense that the director or officer has not met the applicable standard of conduct under the Delaware General Corporation Law. In any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, it shall be entitled to recover

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such expenses upon a final adjudication that the director or officer has not met the applicable standard of conduct set forth in the Delaware General Corporation Law. Neither the failure of the Board of Directors of the Corporation to determine prior to the commencement of such suit that the director or officer has met the applicable standard of conduct for indemnification set forth in the Delaware General Corporation Law, nor an actual determination by the Board of Directors of the Corporation that the director or officer has not met such applicable standard of conduct, shall create a presumption that the director or officer has not met the applicable standard of conduct, and, in the case of such a suit brought by the director or officer to enforce a right hereunder or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the director or officer is not entitled to be indemnified or to such advancement of expenses under this Article Ninth or otherwise shall be on the Corporation.

(3) The rights to indemnification and to the advancement of expenses conferred in this Article Ninth are not exclusive of any other right which any person may have or hereafter acquire under any statute, this Certificate of Incorporation, the Corporation’s Bylaws, any agreement, any vote of stockholders or disinterested directors or otherwise.

(4) The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or other entity against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person under the Delaware General Corporation Law.

(5) The Corporation may, if authorized by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the same extent as for directors of the Corporation.

TENTH: Creditor Compromise or Arrangement. Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.

ELEVENTH: Corporate Power. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.

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[Signature page follows]

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IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed by its duly authorized officer as of October 30, 2012.

THE ADVISORY BOARD COMPANY
By:	/s/ Evan Farber
	Evan Farber
	General Counsel and Corporate Secretary

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Robert W. Musslewhite, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Advisory Board Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2012	/s/ Robert W. Musslewhite
	Robert W. Musslewhite
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael T. Kirshbaum, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Advisory Board Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2012	/s/ Michael T. Kirshbaum
	Michael T. Kirshbaum,
	Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

THE ADVISORY BOARD COMPANY

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his capacity as an officer of The Advisory Board Company (the “Company”), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1) The Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2012 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Robert W. Musslewhite

Robert W. Musslewhite

Chief Executive Officer

November 9, 2012

/s/ Michael T. Kirshbaum

Michael T. Kirshbaum

Chief Financial Officer and Treasurer

November 9, 2012

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Summary of Financial Position and Operating Results of Evolent (Detail) (Evolent [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012
Evolent [Member]
Assets:
Cash	$ 11,038		$ 11,038		$ 14,807
Other current assets	2,702		2,702		821
Intangible assets, net	2,312		2,312		2,755
Other non-current assets	3,465		3,465		1,152
Total assets	19,517		19,517		19,535
Liabilities and Members' Equity:
Deferred revenue	4,976		4,976		200
Accounts payable and accrued liabilities	2,853		2,853		669
Long-term liabilities	359		359		359
Member's equity	11,329		11,329		18,307
Total liabilities and member's equity	19,517		19,517		19,535
Revenue	2,193		2,262
Operating expenses	(7,440)		(12,655)
Depreciation and amortization	(178)		(482)
Interest, net	3		7
Net loss	$ (5,422)		$ (10,868)

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Summary of Stock-based Compensation Expense (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Summary of stock-based compensation expense
Income from operations	$ 12,221	$ 7,829	$ 21,312	$ 12,961
Employee Stock Purchase Plan [Member]
Summary of stock-based compensation expense
Stock based compensation	3,405	2,800	6,911	5,515
Income from operations	(3,405)	(2,800)	(6,911)	(5,515)
Net income	(2,101)	(1,750)	(4,264)	(3,447)
Impact on diluted earnings per share	$ 0.06	$ 0.05	$ 0.12	$ 0.10
Cost of services [Member] | Employee Stock Purchase Plan [Member]
Summary of stock-based compensation expense
Stock based compensation	989	847	1,993	1,690
Member relations and marketing [Member] | Employee Stock Purchase Plan [Member]
Summary of stock-based compensation expense
Stock based compensation	658	511	1,336	1,012
General and administrative [Member] | Employee Stock Purchase Plan [Member]
Summary of stock-based compensation expense
Stock based compensation	$ 1,758	$ 1,442	$ 3,582	$ 2,813

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Fair Value Measurements of Financial Assets and Liabilities on Recurring Basis (Parenthetical) (Detail) (USD $)	6 Months Ended	12 Months Ended
	Sep. 30, 2012	Mar. 31, 2012	Jun. 30, 2009
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of the common stock warrants	$ 0.23	$ 0.24	$ 0.00
Risk-free interest rate	1.00%	1.10%
Expected term	6 years 8 months 19 days	6 years 11 months 19 days
Expected volatility	40.93%	41.03%
Dividend yield	0.00%	0.00%
Weighted average exercise price	$ 1.00	$ 1.00
Warrants exercisable, minimum	1,400,000	1,400,000
Warrants exercisable, maximum	1,800,000	1,800,000

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Discontinued operations - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended
	Jan. 31, 2012 Employees	Jan. 20, 2012
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sales of OptLink business		$ 8.9
Number of employees transferred to Kronos	35

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Fair value measurements - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended							6 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012	Mar. 31, 2012	Jun. 30, 2011	Mar. 31, 2011	Jun. 30, 2009	Sep. 30, 2012 Cielo [Member]	Jan. 31, 2011 Cielo [Member]	Sep. 30, 2012 Cielo [Member] Maximum [Member]	Sep. 30, 2012 Southwind [Member]	Dec. 31, 2009 Southwind [Member]	Sep. 30, 2012 Pivothealth [Member]	Jul. 31, 2012 Pivothealth [Member]	Jul. 31, 2011 Pivothealth [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Common stock warrants			6,015,000
Significant transfers between Level 1, Level 2,or Level 3			$ 0	$ 0
Fair value of the common stock warrants	$ 0.23		$ 0.23			$ 0.24			$ 0.00
Fair value of estimated additional contingent payments	22,500	23,600	22,500	23,600	22,900	20,200	18,700	15,500		1,400	4,400		18,400	5,600	2,800	2,900	2,900
Fair value estimate discount rate										14.50%			15.00%		15.50%
Earn-out payments	$ 400	$ 300	$ 800	$ 300						$ 3,000		$ 7,000	$ 3,100

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Business Description and Basis of Presentation - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Reclassifications [Line Items]
Amortization expense for intangible assets	$ 1.2	$ 1.4	$ 2.4	$ 2.4

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Revolving Credit Facility - Additional Information (Detail) (USD $)	6 Months Ended
	Sep. 30, 2012	Jul. 30, 2012 CreditFacility
Line of Credit Facility [Line Items]
Duration of senior secured revolving credit facility		5
Amount of revolving credit facility		$ 150,000,000
Additional borrowings under the credit facility	50,000,000
Minimum increments under the credit agreement	10,000,000
Maximum principal amount of swing line loans	5,000,000
Issuance of letters of credit under sublimit	10,000,000
Credit facility matures	Jul. 30, 2017
Debt instrument basis spread on variable rate minimum	1.75%
Debt instrument basis spread on variable rate maximum	2.50%
Amounts outstanding on the credit facility	0
Amount available for borrowing	150,000,000
Minimum [Member]
Line of Credit Facility [Line Items]
Alternate base rate loans under credit agreement	0.75%
Commitment fee percentage on unutilized portion	0.25%
Maximum [Member]
Line of Credit Facility [Line Items]
Alternate base rate loans under credit agreement	1.50%
Commitment fee percentage on unutilized portion	0.40%
Secured Debt [Member]
Line of Credit Facility [Line Items]
Amount of revolving credit facility	150,000,000
Financing fees related to revolving credit facility	$ 800,000

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Marketable securities (Tables)

6 Months Ended

Sep. 30, 2012

Aggregate Value, Amortized Cost, Gross Unrealized Gains, and Gross Unrealized Losses on Available-for-Sale Marketable Securities

The aggregate value, amortized cost, gross unrealized gains, and gross unrealized losses on available-for-sale marketable securities are as follows (in thousands):

	As of September 30, 2012
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	29,688	$	29,513	$	176	$	1
Tax exempt obligations of states		118,159		114,818		3,579		238
	$	147,847	$	144,331	$	3,755	$	239
	As of March 31, 2012
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	33,472	$	33,543	$	130	$	201
Tax exempt obligations of states		93,972		92,028		2,667		723
	$	127,444	$	125,571	$	2,797	$	924

Marketable Securities Maturities

The following table summarizes marketable securities maturities (in thousands):

	As of September 30, 2012
	Fair market value		Amortized cost
Matures in less than 1 year	$	15,304	$	14,966
Matures after 1 year through 5 years		35,186		33,989
Matures after 5 years through 20 years		97,357		95,376
	$	147,847	$	144,331

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Reconciliation of Changes in Contingent Earn-out Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended				6 Months Ended					3 Months Ended		6 Months Ended					6 Months Ended	3 Months Ended				3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Southwind [Member]		Sep. 30, 2011 Southwind [Member]		Sep. 30, 2012 Southwind [Member]		Sep. 30, 2011 Southwind [Member]		Dec. 31, 2009 Southwind [Member]	Sep. 30, 2011 Cielo [Member]		Sep. 30, 2012 Cielo [Member]		Sep. 30, 2011 Cielo [Member]		Jan. 31, 2011 Cielo [Member]	Sep. 30, 2012 Cielo [Member] Maximum [Member]	Jun. 30, 2012 Pivothealth [Member]	Sep. 30, 2012 Pivothealth [Member]	Jul. 31, 2012 Pivothealth [Member]	Jul. 31, 2011 Pivothealth [Member]	Sep. 30, 2012 Pivothealth [Member] Minimum [Member]		Sep. 30, 2012 Pivothealth [Member] Minimum [Member]		Sep. 30, 2011 Pivothealth [Member] Maximum [Member]	Sep. 30, 2011 Pivothealth [Member] Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning balance	$ 22,900	$ 18,700	$ 20,200	$ 15,500									$ 5,600							$ 4,400			$ 2,800	$ 2,900	$ 2,900
Adjustment made to the fair value of contingent liability					(100)	[1]	2,600	[1]	3,700	[1]	5,800	[1]		(300)	[1]	100	[1]	(300)	[1]			400				100	[1]	(300)	[1]	2,900	2,900
Southwind earn-out payment	(400)	(300)	(800)	(300)					(3,100)							(3,000)					(7,000)
Ending balance	$ 22,500	$ 23,600	$ 22,500	$ 23,600	$ 18,400				$ 18,400				$ 5,600			$ 1,400				$ 4,400			$ 2,800	$ 2,900	$ 2,900

[1] Amounts were recognized in cost of services on the accompanying consolidated statements of income.

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Property and equipment - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 3,200,000	$ 2,100,000	$ 6,100,000	$ 4,100,000
Property and equipment, net	58,071,000		58,071,000		49,653,000
Software Development [Member]
Property, Plant and Equipment [Line Items]
Weighted Average useful life of capitalized and acquired software			5
Property and equipment, net	$ 22,500,000	$ 11,300,000	$ 22,500,000	$ 11,300,000
Acquired Developed Technology [Member]
Property, Plant and Equipment [Line Items]
Weighted Average useful life of capitalized and acquired software			9
Furniture Fixtures And Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of furniture, fixtures, and equipment minimum			3
Estimated useful lives of furniture, fixtures, and equipment maximum			7

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Acquisitions - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended						1 Months Ended	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2012 M Y	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Aug. 31, 2011 Pivothealth [Member] M Y	Jun. 30, 2012 Pivothealth [Member]	Sep. 30, 2012 Pivothealth [Member]	Jul. 31, 2012 Pivothealth [Member]	Jul. 31, 2011 Pivothealth [Member]	Jul. 31, 2011 Pivothealth [Member] Customer Relationships And Trademark [Member]	Jul. 31, 2011 Pivothealth [Member] Employee Related Intangibles [Member]
Business Acquisition [Line Items]
Total purchase price												$ 19,800,000
Initial payment in cash												15,000,000
Fair value of estimated additional contingent payments	22,500,000	22,500,000	22,900,000	20,200,000	23,600,000	18,700,000	15,500,000			2,800,000	2,900,000	2,900,000
Additional payments by escrow												1,900,000
Adjustment made to the fair value of contingent liability									400,000
Additional upward adjustment made to the fair value of contingent liability	100,000
Total estimated purchase price allocated to acquired assets												1,800,000
Total estimated purchase price allocated to assumed liabilities												1,000,000
Intangible assets												6,400,000	6,000,000	400,000
Estimated useful lives of intangible assets minimum		6						6
Estimated useful lives of intangible assets maximum		10						9
Weighted average useful life		4.5						6.5
Allocated goodwill												$ 12,600,000

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Stock-based compensation - Additional Information (Detail) (USD $)	6 Months Ended
	Sep. 30, 2012 Y
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value of the options granted	$ 13.32
Risk-free interest rate	0.70%
Stock option awards,expected term	4
Expected volatility	37.26%
Stock option awards, dividend yield	0.00%
Stock based compensation costs capitalized as part of the cost of an asset	$ 0
Compensation cost related to stock-based compensation	$ 31,000,000
Weighted average period of stock-based compensation	1.5

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Stockholders' equity - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Subsidiary or Equity Method Investee [Line Items]
Number of shares repurchased under stock repurchase program	114,390	79,208	177,227	167,280
Purchases of treasury stock	$ 5,000,000	$ 2,400,000	$ 8,000,000	$ 4,700,000
Number of shares repurchased	15,442,007		15,442,007
Total cost of common stock repurchase	330,900,000		330,900,000
Remaining authorized repurchase amount			19,100,000
Number of shares retired by the company			13,442,007
Post-confirmation, preferred and Common Stock Held in Treasury			68,000
Treasury stock retirement resulted in reductions to treasury stock			297,800,000
Treasury stock retirement resulted in reductions to retained earnings			$ 297,700,000
Total treasury stock have been retired to date	15,442,007		15,442,007

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Fair Value Measurements of Financial Assets and Liabilities on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012		Jun. 30, 2012	Mar. 31, 2012		Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011
Financial assets
Common stock warrants	$ 340		$ 450	$ 450
Financial liabilities
Contingent earn-out liabilities	22,500		22,900	20,200		23,600	18,700	15,500
Recurring [Member]
Financial assets
Cash and cash equivalents	79,927	[1]		60,642	[1]
Available-for-sale marketable securities	147,847	[2]		127,444	[2]
Common stock warrants	340	[3]		450	[3]
Financial liabilities
Contingent earn-out liabilities	22,500	[4]		20,200	[4]
Recurring [Member] | Level 1 [Member]
Financial assets
Cash and cash equivalents	79,927	[1]		60,642	[1]
Available-for-sale marketable securities	147,847	[2]		127,444	[2]
Recurring [Member] | Level 3 [Member]
Financial assets
Common stock warrants	340	[3]		450	[3]
Financial liabilities
Contingent earn-out liabilities	$ 22,500	[4]		$ 20,200	[4]

[1] Fair value is based on quoted market prices.

[2] Fair value is determined using quoted market prices of the assets. For further detail, see Note 3, "Marketable securities.

[3] The fair value of the common stock warrants as of September 30, 2012 and March 31, 2012 was calculated to be $0.23 per share and $0.24 per share, respectively, using the Black-Scholes-Merton model. The significant assumptions as of September 30, 2012 were as follows: risk-free interest rate of 1.0%; expected term of 6.72 years; expected volatility of 40.93%; dividend yield of 0.0%; weighted average exercise price of $1.00 per share; and a range of warrants to become exercisable of between 1,400,000 and 1,800,000 shares. The significant assumptions as of March 31, 2012 were as follows: risk-free interest rate of 1.1%; expected term of 6.97 years; expected volatility of 41.03%; dividend yield of 0.0%; weighted average exercise price of $1.00 per share; and a range of warrants to become exercisable of between 1,400,000 and 1,800,000 shares.

[4] This fair value measurement is based on unobservable inputs that are supported by little or no market activity and reflect the Company's own assumptions in measuring fair value using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and general macro-economic environment and industry trends.

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Marketable securities

6 Months Ended

Sep. 30, 2012

Marketable securities

Note 3. Marketable securities

The aggregate value, amortized cost, gross unrealized gains, and gross unrealized losses on available-for-sale marketable securities are as follows (in thousands):

	As of September 30, 2012
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	29,688	$	29,513	$	176	$	1
Tax exempt obligations of states		118,159		114,818		3,579		238
	$	147,847	$	144,331	$	3,755	$	239
	As of March 31, 2012
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	33,472	$	33,543	$	130	$	201
Tax exempt obligations of states		93,972		92,028		2,667		723
	$	127,444	$	125,571	$	2,797	$	924

The following table summarizes marketable securities maturities (in thousands):

	As of September 30, 2012
	Fair market value		Amortized cost
Matures in less than 1 year	$	15,304	$	14,966
Matures after 1 year through 5 years		35,186		33,989
Matures after 5 years through 20 years		97,357		95,376
	$	147,847	$	144,331

Other than redemptions upon maturity, there were no sales during the three or six months ended September 30, 2012 or 2011. The weighted average maturity on all marketable securities held by the Company as of September 30, 2012 was approximately 5.8 years. Pre-tax net unrealized gains on the Company’s investments of $3.5 million as indicated above were caused by the decrease in market interest rates compared to the average interest rate of the Company’s marketable securities portfolio. Of this amount, $338,000 is related to investments that mature before September 30, 2013. The Company purchased certain of its investments at a premium or discount to their relative fair values. The Company does not intend to sell these investments and it is not more likely than not that it will be required to sell the investments before recovery of the amortized cost bases, which may be maturity; therefore, the Company does not consider these investments to be other-than-temporarily impaired as of September 30, 2012. The Company has reflected the net unrealized gains and losses, net of tax, in accumulated other comprehensive income on the accompanying consolidated balance sheets. The Company uses the specific identification method to determine the cost of marketable securities that are sold.

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Subsequent events - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		1 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Southwind [Member]	Sep. 30, 2011 Southwind [Member]	Sep. 30, 2012 Southwind [Member]	Sep. 30, 2011 Southwind [Member]	Oct. 31, 2012 Subsequent Event [Member] Southwind [Member]	Sep. 30, 2012 Subsequent Event [Member] A.S. Inc [Member]
Subsequent Event [Line Items]
Acquisition cost										$ 15.2
Initial payment										12.9
Additional payment										$ 2.3
Fully diluted shares outstanding	112,000	110,000	112,000	110,000	112,408	112,408	112,408	112,408	112,408

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Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Property, Plant and Equipment [Line Items]
Leasehold improvements	$ 24,112	$ 23,692
Furniture, fixtures, and equipment	30,932	26,529
Software	52,950	43,211
Property and equipment, gross	107,994	93,432
Accumulated depreciation and amortization	(49,923)	(43,779)
Property and equipment, net	$ 58,071	$ 49,653

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Fair value measurements (Tables)

6 Months Ended

Sep. 30, 2012

Fair Value Measurements of Financial Assets and Liabilities on Recurring Basis

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the necessary disclosures are as follows (in thousands):

	Fair value as of September 30,		Fair value measurement as of September 30, 2012 using fair value hierarchy
	2012		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	79,927	$	79,927	$	—	$	—
Available-for-sale marketable securities (2)		147,847		147,847		—		—
Common stock warrants (3)		340		—		—		340
Financial liabilities
Contingent earn-out liabilities (4)		22,500		—		—		22,500
	Fair value as of March 31,		Fair value measurement as of March 31, 2012 using fair value hierarchy
	2012		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	60,642	$	60,642	$	—	$	—
Available-for-sale marketable securities (2)		127,444		127,444		—		—
Common stock warrants (3)		450		—		—		450
Financial liabilities
Contingent earn-out liabilities (4)		20,200		—		—		20,200

(1) Fair value is based on quoted market prices.

(2) Fair value is determined using quoted market prices of the assets. For further detail, see Note 3, “Marketable securities.”

(3) The fair value of the common stock warrants as of September 30, 2012 and March 31, 2012 was calculated to be $0.23 per share and $0.24 per share, respectively, using the Black-Scholes-Merton model. The significant assumptions as of September 30, 2012 were as follows: risk-free interest rate of 1.0%; expected term of 6.72 years; expected volatility of 40.93%; dividend yield of 0.0%; weighted average exercise price of $1.00 per share; and a range of warrants to become exercisable of between 1,400,000 and 1,800,000 shares. The significant assumptions as of March 31, 2012 were as follows: risk-free interest rate of 1.1%; expected term of 6.97 years; expected volatility of 41.03%; dividend yield of 0.0%; weighted average exercise price of $1.00 per share; and a range of warrants to become exercisable of between 1,400,000 and 1,800,000 shares.

(4) This fair value measurement is based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and general macro-economic environment and industry trends.

Reconciliation of Change in Fair Value of Common Stock Warrants

The following table represents a reconciliation of the change in the fair value of the common stock warrants for the three and six months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30,					Six Months Ended September 30,
	2012			2011		2012			2011
Beginning balance	$	450		$	—	$	450		$	—
Fair value change in common stock warrants (1)		(110	)		—		(110	)		—
Ending balance	$	340		$	—	$	340		$	—

(1) Amounts were recognized in other income, net on the accompanying consolidated statements of income.

Reconciliation of Changes in Contingent Earn-out Liabilities

The following table represents a reconciliation of the change in the contingent earn-out liabilities for the three and six months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Beginning balance	$	22,900		$	18,700		$	20,200		$	15,500
Fair value change in Southwind contingent earn-out liability (1)		(100	)		2,600			3,700			5,800
Fair value change in Cielo contingent earn-out liability (1)		—			(300	)		100			(300	)
Fair value change in PivotHealth contingent earn-out liability (1)		100			—			(300	)		—
Southwind earn-out payment		(400	)		(300	)		(800	)		(300	)
Addition of PivotHealth contingent earn-out liability		—			2,900			—			2,900
Ending balance	$	22,500		$	23,600		$	22,900		$	23,600

(1) Amounts were recognized in cost of services on the accompanying consolidated statements of income.

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Goodwill and intangibles (Tables)

6 Months Ended

Sep. 30, 2012

Gross and Net Carrying Balances and Accumulated Amortization of Other Intangibles

The gross and net carrying balances and accumulated amortization of intangibles are as follows (in thousands):

			As of September 30, 2012							As of March 31, 2012
	Weighted average useful life		Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Intangibles
Internally developed intangible for sale:
Capitalized software		5.0	$	4,769	$	(650	)	$	4,119	$	3,048	$	(380	)	$	2,668
Acquired intangibles:
Developed software		4.9		6,450		(3,225	)		3,225		6,450		(2,567	)		3,883
Customer relationships		7.5		11,900		(3,780	)		8,120		11,900		(2,914	)		8,986
Trademarks		3.7		2,700		(1,838	)		862		2,700		(1,625	)		1,075
Non-compete agreements		4.3		1,100		(502	)		598		1,100		(393	)		707
Customer contracts		4.9		5,199		(3,388	)		1,811		5,199		(3,134	)		2,065
Total other intangibles			$	32,118	$	(13,383	)	$	18,735	$	30,397	$	(11,013	)	$	19,384

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Components of Discontinued Operations Included in Consolidated Statements of Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue		$ 1,464		$ 3,142
Cost of services		1,389		2,702
Member relations and marketing		28		128
Depreciation and amortization
Income from discontinued operations before provision for income taxes		47		312
Provision for income taxes		(17)		(117)
Net income from discontinued operations, net of provision for income taxes		$ 30		$ 195

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Goodwill and intangibles - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 M Y	Sep. 30, 2011
Goodwill And Intangible Assets [Line Items]
Impairment of goodwill			$ 0	$ 0
Weighted average remaining useful life of acquired intangibles			4.5
Weighted average remaining useful life of internally developed intangibles			4.1
Estimated useful lives of intangible assets minimum			6
Estimated useful lives of intangible assets maximum			10
Amortization expense for intangible assets	1,200,000	1,500,000	2,400,000	2,700,000
Future amortization expense to be recorded in 2013			2,400,000
Future amortization expense to be recorded in 2014			4,700,000
Future amortization expense to be recorded in 2015			4,500,000
Future amortization expense to be recorded in 2016			1,800,000
Future amortization expense to be recorded in 2017			1,300,000
Future amortization expense to be recorded thereafter			$ 2,300,000

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Stock-based compensation (Tables)

6 Months Ended

Sep. 30, 2012

Common Stock Options Granted

Information with respect to common stock options granted under the Company’s stock incentive plans during the six months ended September 30, 2012 and 2011 are as follows:

	Six Months Ended September 30,
	2012					2011
	Number of Options			Weighted Average Exercise Price		Number of Options			Weighted Average Exercise Price
Outstanding, April 1		3,812,228		$	17.04		5,059,198		$	16.30
Granted		347,760			43.83		591,412			24.82
Exercised		(1,036,456	)		15.64		(793,924	)		16.50
Forfeited		(4,500	)		9.26		(36,372	)		18.89
Cancellations		—			—		—			—
Outstanding, September 30		3,119,032		$	20.51		4,820,314		$	17.30
Exercisable, September 30		1,546,512		$	17.60

Summary of Changes in RSUs

The following table summarizes the changes in restricted stock units (“RSUs”) granted under the Company’s stock incentive plans during the six months ended September 30, 2012 and 2011:

	Six Months Ended September 30,
	2012					2011
	Number of RSUs			Weighted Average Grant Date Fair Value		Number of RSUs			Weighted Average Grant Date Fair Value
Non-vested, April 1		896,640		$	20.77		664,218		$	17.34
Granted		308,152		$	43.96		451,596		$	24.39
Forfeited		(2,904	)	$	22.75		(1,274	)		18.67
Vested		(273,444	)	$	46.19		(146,572	)	$	25.60
Non-vested, September 30		928,444		$	28.67		967,968		$	20.79

Summary of Stock-based Compensation Expense

The Company recognized stock-based compensation expense in the following consolidated statements of income line items for stock options and RSUs, for the three and six months ended September 30, 2012 and 2011 (in thousands, except per share amounts):

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Stock-based compensation expense included in:
Costs and expenses:
Cost of services	$	989		$	847		$	1,993		$	1,690
Member relations and marketing		658			511			1,336			1,012
General and administrative		1,758			1,442			3,582			2,813
Depreciation and amortization		—			—			—			—
Total costs and expenses		3,405			2,800			6,911			5,515
Income from operations		(3,405	)		(2,800	)		(6,911	)		(5,515	)
Net income	$	(2,101	)	$	(1,750	)	$	(4,264	)	$	(3,447	)
Impact on diluted earnings per share	$	0.06		$	0.05		$	0.12		$	0.10

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Discontinued operations (Tables)

6 Months Ended

Sep. 30, 2012

Components of Discontinued Operations Included in Consolidated Statements of Income

	Three Months Ended September 30,					Six Months Ended September 30,
	2012		2011			2012		2011
Revenue	$	—	$	1,464		$	—	$	3,142
Costs and expenses:
Cost of services		—		1,389			—		2,702
Member relations and marketing		—		28			—		128
Depreciation and amortization		—		—			—		—
Income from discontinued operations before provision for income taxes		—		47			—		312
Provision for income taxes		—		(17	)		—		(117	)
Net income from discontinued operations, net of provision for income taxes	$	—	$	30		$	—	$	195

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Recent accounting pronouncements

6 Months Ended

Sep. 30, 2012

Recent accounting pronouncements

Note 2. Recent accounting pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all recent ASUs. ASUs not listed below were assessed and determined to be not applicable or are expected to have minimal impact on the Company’s consolidated financial position and results of operations.

Recently adopted

In December 2011, the FASB issued an update which indefinitely deferred the guidance related to the presentation of reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income on the face of the financial statements, as required by ASU 2011-05. The Company adopted all other requirements of ASU 2011-05 on April 1, 2012 and has presented consolidated net income and consolidated comprehensive income in two separate, but consecutive, statements. The adoption of this guidance did not have a material effect on the Company’s financial position or results of operations.

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Earnings per share (Tables)

6 Months Ended

Sep. 30, 2012

Reconciliation of Basic to Diluted Weighted Average Common Shares Outstanding

A reconciliation of basic to diluted weighted average common shares outstanding is as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Basic weighted average common shares outstanding		34,660		32,596		34,421		32,416
Effect of dilutive outstanding stock-based awards		1,481		1,660		1,621		1,556
Dilutive impact of earn-out liability		112		110		112		110
Diluted weighted average common shares outstanding		36,253		34,366		36,154		34,082

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Other non-current assets - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2009	Sep. 30, 2012	Sep. 30, 2012	Mar. 31, 2012
Property, Plant and Equipment [Line Items]
Common stock Purchased by company	6,015,000
Exercise price	$ 1.00
Downward adjustment to fair value of warrants		$ 100,000
Warrants recorded at their fair value		340,000	340,000	450,000
Convertible preferred stock investment is recorded at cost		$ 5,000,000	$ 5,000,000
Convertible preferred stock carries a dividend rate			8.00%
Dividends declared			$ 0

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Summary of Changes in RSUs (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Number of options RSU
Number of RSUs Non-vested, Beginning balance	896,640	664,218
Number of RSUs Granted	308,152	451,596
Number of RSUs Forfeited	(2,904)	(1,274)
Number of RSUs Vested	(273,444)	(146,572)
Number of RSUs Non-vested, Ending balance	928,444	967,968
Weighted Average Exercise Price RSU
Weighted Average Grant Date Fair Value non-vested, Beginning balance	$ 20.77	$ 17.34
Weighted Average Grant Date Fair Value granted	$ 43.96	$ 24.39
Weighted Average Grant Date Fair Value Forfeited	$ 22.75	$ 18.67
Weighted Average Grant Date Fair Value Vested	$ 46.19	$ 25.60
Weighted Average Grant Date Fair Value non-vested, Ending balance	$ 28.67	$ 20.79

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Current assets:
Cash and cash equivalents	$ 79,927	$ 60,642
Marketable securities	15,304	4,823
Membership fees receivable, net	319,167	281,584
Prepaid expenses and other current assets	12,957	6,705
Deferred income taxes,current	8,704	7,255
Total current assets	436,059	361,009
Property and equipment, net	58,071	49,653
Intangible assets, net	18,735	19,384
Goodwill	74,235	74,235
Deferred incentive compensation and other charges	57,327	53,369
Deferred income taxes, net of current portion	6,038	7,655
Investment in unconsolidated entity	5,946	8,662
Other non-current assets	8,890	9,000
Marketable securities	132,543	122,621
Total assets	797,844	705,588
Current liabilities:
Deferred revenue	343,379	313,958
Accounts payable and accrued liabilities	69,082	57,529
Accrued incentive compensation	12,167	18,691
Total current liabilities	424,628	390,178
Long-term deferred revenue	106,691	78,498
Other long-term liabilities	15,889	19,865
Total liabilities	547,208	488,541
Redeemable noncontrolling interest	100
The Advisory Board Company's stockholders' equity:
Preferred stock, par value $0.01; 5,000,000 shares authorized, zero shares issued and outstanding
Common stock, par value $0.01; 135,000,000 shares authorized, 34,777,020 and 46,994,560 shares issued as of September 30, 2012 and March 31, 2012, respectively, and 34,777,020 and 33,729,780 shares outstanding as of September 30, 2012 and March 31, 2012, respectively	348	235
Additional paid-in capital	344,634	315,648
Retained (deficit) earnings	(96,651)	189,742
Accumulated elements of other comprehensive income	2,313	1,206
Treasury stock, at cost 0 and 13,264,780 shares as of September 30, 2012 and March 31, 2012, respectively		(289,784)
Total stockholders' equity controlling interest	250,644	217,047
Equity attributable to noncontrolling interests	(108)
Total stockholders' equity	250,636	217,047
Total liabilities and stockholders' equity	$ 797,844	$ 705,588

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Gross and Net Carrying Balances and Accumulated Amortization of Other Intangibles (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2012 Y	Mar. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (year)	4.1
Gross carrying amount	$ 32,118	$ 30,397
Accumulated amortization	(13,383)	(11,013)
Net carrying amount	18,735	19,384
Capitalized software [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (year)	5.0
Gross carrying amount	4,769	3,048
Accumulated amortization	(650)	(380)
Net carrying amount	4,119	2,668
Developed software [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (year)	4.9
Gross carrying amount	6,450	6,450
Accumulated amortization	(3,225)	(2,567)
Net carrying amount	3,225	3,883
Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (year)	7.5
Gross carrying amount	11,900	11,900
Accumulated amortization	(3,780)	(2,914)
Net carrying amount	8,120	8,986
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (year)	3.7
Gross carrying amount	2,700	2,700
Accumulated amortization	(1,838)	(1,625)
Net carrying amount	862	1,075
Non-compete agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (year)	4.3
Gross carrying amount	1,100	1,100
Accumulated amortization	(502)	(393)
Net carrying amount	598	707
Customer contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (year)	4.9
Gross carrying amount	5,199	5,199
Accumulated amortization	(3,388)	(3,134)
Net carrying amount	$ 1,811	$ 2,065

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UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income before allocation to noncontrolling interest	$ 11,214	$ 9,074
Adjustments to reconcile net income before allocation to noncontrolling interest to net cash provided by operating activities:
Depreciation and amortization	8,516	6,802
Deferred income taxes	(408)	10
Excess tax benefits from stock-based awards	(9,721)	(578)
Stock-based compensation expense	6,911	5,526
Amortization of marketable securities premiums	958	528
Loss on investment in common stock warrants	110
Equity in loss of unconsolidated entity	2,716
Changes in operating assets and liabilities:
Membership fees receivable	(37,583)	(53,435)
Prepaid expenses and other current assets	(6,252)	863
Deferred incentive compensation and other charges	(3,958)	(10,990)
Deferred revenues	57,614	62,902
Accounts payable and accrued liabilities	22,456	16,348
Accrued incentive compensation	(6,524)	(3,629)
Other long-term liabilities	(3,976)	3,540
Net cash provided by operating activities	42,073	36,961
Cash flows from investing activities:
Purchases of property and equipment	(14,562)	(13,524)
Capitalized external use software development costs	(1,723)	(1,366)
Acquisition-related earn-out payments	(1,182)	(16,829)
Investment in unconsolidated entity		(10,000)
Redemptions of marketable securities	23,220	11,000
Purchases of marketable securities	(42,889)	(8,157)
Net cash used in investing activities	(37,136)	(38,876)
Cash flows from financing activities:
Proceeds from issuance of common stock from exercise of stock options	16,205	13,091
Withholding of shares to satisfy minimum employee tax withholding for vested restricted stock units	(3,844)	(1,266)
Proceeds from issuance of common stock under employee stock purchase plan	165	110
Excess tax benefits from stock-based awards	9,721	578
Contributions from noncontrolling interest	100
Purchases of treasury stock	(7,999)	(4,673)
Net cash provided by financing activities	14,348	7,840
Net increase in cash and cash equivalents	19,285	5,925
Cash and cash equivalents, beginning of period	60,642	30,378
Cash and cash equivalents, end of period	$ 79,927	$ 36,303

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Reconciliation of Basic to Diluted Weighted Average Common Shares Outstanding (Detail)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Basic weighted average common shares outstanding	34,660,000	32,596,000	34,421,000	32,416,000
Effect of dilutive outstanding stock-based awards	1,481,000	1,660,000	1,621,000	1,556,000
Dilutive impact of earn-out liability	112,000	110,000	112,000	110,000
Diluted weighted average common shares outstanding	36,253,000	34,366,000	36,154,000	34,082,000

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Marketable Securities Maturities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Matures in less than 1 year, Fair market value	$ 15,304
Matures after 1 year through 5 years, Fair market value	35,186
Matures after 5 years through 20 years, Fair market value	97,357
Fair value	147,847	127,444
Matures in less than 1 year, Amortized cost	14,966
Matures after 1 year through 5 years, Amortized cost	33,989
Matures after 5 years through 20 years, Amortized cost	95,376
Amortized cost	$ 144,331

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Stockholders' equity

6 Months Ended

Sep. 30, 2012

Stockholders' equity

Note 16. Stockholders’ equity

During the three and six months ended September 30, 2012, the Company repurchased 114,390 and 177,227 shares, respectively, of its common stock at a total cost of approximately $5.0 million and $8.0 million, respectively, pursuant to its share repurchase program. During the three and six months ended September 30, 2011, the Company repurchased 79,208 and 167,280 shares, respectively, of its common stock at a total cost of approximately $2.4 million and $4.7 million, respectively, pursuant to its share repurchase program. The total amount of common stock purchased from inception under the program as of September 30, 2012 was 15,442,007 shares at a total cost of $330.9 million. All repurchases to date have been made in the open market and have been retired as of September 30, 2012. No minimum number of shares subject to repurchase has been fixed and the share repurchase authorization has no expiration date. The Company has funded, and expects to continue to fund, its share repurchases with cash on hand, proceeds from the sale of marketable securities, and cash generated from operations. As of September 30, 2012, the remaining authorized repurchase amount was $19.1 million.

During the six months ended September 30, 2012, the Company retired 13,442,007 shares of its treasury stock. Upon retirement, these shares resumed the status of authorized but unissued stock. The treasury stock retirement resulted in reductions to common stock of $68,000, treasury stock of $297.8 million, and retained earnings of $297.7 million. A total of 15,442,007 shares of treasury stock have been retired to date. There was no effect on the total stockholders’ equity position as a result of the retirement.

On May 1, 2012, the Company’s Board of Directors approved a two-for-one split of the Company’s common stock to be effected in the form of a stock dividend. As a result of this action, one additional share was issued on June 18, 2012 for each share held by stockholders of record at the close of business on May 31, 2012. The stock split did not have an impact on the Company’s consolidated financial position or results of operations. Share and per share amounts presented in the accompanying consolidated financial statements for dates before June 18, 2012 have been restated to reflect the impact of the stock split.

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Marketable securities - Additional Information (Detail) (USD $)	6 Months Ended
	Sep. 30, 2012
Schedule of Available-for-sale Securities [Line Items]
Weighted average maturity of marketable securities	5 years 9 months 18 days
Pre-tax net unrealized gains on investments	$ 3,500,000
Investments matured	$ 338,000

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Business description and basis of presentation (Policies)

6 Months Ended

Sep. 30, 2012

Reclassification

Reclassification

On April 1, 2012, the Company began including amortization expense for intangible assets in depreciation and amortization rather than in cost of services on its consolidated statements of income. Amounts reported for prior years have been reclassified to conform to the current period’s presentation. As a result of this reclassification, amortization expense for intangible assets of $1.2 million and $2.4 million for the three and six months ended September 30, 2012, respectively, and $1.4 million and $2.4 million for the three and six months ended September 30, 2011, respectively, is included in depreciation and amortization on the accompanying consolidated statements of income.

Recently adopted

Recently adopted

In December 2011, the FASB issued an update which indefinitely deferred the guidance related to the presentation of reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income on the face of the financial statements, as required by ASU 2011-05. The Company adopted all other requirements of ASU 2011-05 on April 1, 2012 and has presented consolidated net income and consolidated comprehensive income in two separate, but consecutive, statements. The adoption of this guidance did not have a material effect on the Company’s financial position or results of operations.

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Business description and basis of presentation

6 Months Ended

Sep. 30, 2012

Business description and basis of presentation

Note 1. Business description and basis of presentation

The Advisory Board Company (individually and collectively with its subsidiaries, the “Company”) provides best practices research and analysis, business intelligence and software tools, and management and advisory services to hospitals, health systems, pharmaceutical and biotech companies, health care insurers, medical device companies, colleges, universities, and other educational institutions through discrete programs. Members of each program are typically charged a fixed annual fee and have access to an integrated set of services that may include best practices research studies, executive education seminars, customized research briefs, web-based access to the program’s content database, and software tools.

The unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes as reported in the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2012 and the Company’s quarterly report on Form 10-Q for the quarterly period ended June 30, 2012. The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after elimination of all significant intercompany transactions. Certain prior-period amounts have been reclassified to conform to the current-period presentation.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the consolidated financial position, results of operations, and cash flows as of the dates and for the periods presented have been included. The consolidated balance sheet presented as of March 31, 2012 has been derived from the financial statements that have been audited by the Company’s independent registered public accounting firm. The consolidated results of operations for the three and six months ended September 30, 2012 may not be indicative of the results that may be expected for the Company’s fiscal year ending March 31, 2013, or any other period.

On June 18, 2012, the Company completed a two-for-one split of its outstanding shares of common stock in the form of a stock dividend. Each stockholder of record received one additional share of common stock for each share of common stock owned at the close of business on May 31, 2012. Share numbers and per share amounts presented in the accompanying consolidated financial statements and notes thereto for dates before June 18, 2012 have been restated to reflect the impact of the stock split.

Reclassification

On April 1, 2012, the Company began including amortization expense for intangible assets in depreciation and amortization rather than in cost of services on its consolidated statements of income. Amounts reported for prior years have been reclassified to conform to the current period’s presentation. As a result of this reclassification, amortization expense for intangible assets of $1.2 million and $2.4 million for the three and six months ended September 30, 2012, respectively, and $1.4 million and $2.4 million for the three and six months ended September 30, 2011, respectively, is included in depreciation and amortization on the accompanying consolidated statements of income.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Preferred stock,par value	$ 0.01	$ 0.01
Preferred stock,shares authorized	5,000,000	5,000,000
Preferred stock,shares issued	0	0
Preferred stock,shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	135,000,000	135,000,000
Common stock, shares issued	34,777,020	46,994,560
Common stock, shares outstanding	34,777,020	33,729,780
Treasury stock, shares	0	13,264,780

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Stock-based compensation

6 Months Ended

Sep. 30, 2012

Stock-based compensation

Note 11. Stock-based compensation

Information with respect to common stock options granted under the Company’s stock incentive plans during the six months ended September 30, 2012 and 2011 are as follows:

	Six Months Ended September 30,
	2012					2011
	Number of Options			Weighted Average Exercise Price		Number of Options			Weighted Average Exercise Price
Outstanding, April 1		3,812,228		$	17.04		5,059,198		$	16.30
Granted		347,760			43.83		591,412			24.82
Exercised		(1,036,456	)		15.64		(793,924	)		16.50
Forfeited		(4,500	)		9.26		(36,372	)		18.89
Cancellations		—			—		—			—
Outstanding, September 30		3,119,032		$	20.51		4,820,314		$	17.30
Exercisable, September 30		1,546,512		$	17.60

The weighted average fair value of the options granted during the six months ended September 30, 2012 is estimated at $13.32 per share on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: risk-free interest rate of 0.7%, an expected life of approximately four years, volatility of 37.26%, and dividend yield of 0% over the expected life of the option.

The following table summarizes the changes in restricted stock units (“RSUs”) granted under the Company’s stock incentive plans during the six months ended September 30, 2012 and 2011:

	Six Months Ended September 30,
	2012					2011
	Number of RSUs			Weighted Average Grant Date Fair Value		Number of RSUs			Weighted Average Grant Date Fair Value
Non-vested, April 1		896,640		$	20.77		664,218		$	17.34
Granted		308,152		$	43.96		451,596		$	24.39
Forfeited		(2,904	)	$	22.75		(1,274	)		18.67
Vested		(273,444	)	$	46.19		(146,572	)	$	25.60
Non-vested, September 30		928,444		$	28.67		967,968		$	20.79

The Company recognized stock-based compensation expense in the following consolidated statements of income line items for stock options and RSUs, for the three and six months ended September 30, 2012 and 2011 (in thousands, except per share amounts):

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Stock-based compensation expense included in:
Costs and expenses:
Cost of services	$	989		$	847		$	1,993		$	1,690
Member relations and marketing		658			511			1,336			1,012
General and administrative		1,758			1,442			3,582			2,813
Depreciation and amortization		—			—			—			—
Total costs and expenses		3,405			2,800			6,911			5,515
Income from operations		(3,405	)		(2,800	)		(6,911	)		(5,515	)
Net income	$	(2,101	)	$	(1,750	)	$	(4,264	)	$	(3,447	)
Impact on diluted earnings per share	$	0.06		$	0.05		$	0.12		$	0.10

There are no stock-based compensation costs capitalized as part of the cost of an asset.

As of September 30, 2012, $31.0 million of total unrecognized compensation cost related to outstanding options and non-vested RSUs was expected to be recognized over a weighted average period of 1.5 years.

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Document and Entity Information	6 Months Ended
	Sep. 30, 2012	Nov. 01, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Trading Symbol	ABCO
Entity Registrant Name	ADVISORY BOARD CO
Entity Central Index Key	0001157377
Current Fiscal Year End Date	--03-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		34,830,125

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Discontinued operations

6 Months Ended

Sep. 30, 2012

Discontinued operations

Note 12. Discontinued operations

On January 20, 2012, the Company sold its OptiLink business to Kronos Incorporated (“Kronos”) for $8.9 million in cash, net of selling costs. The OptiLink business, which is headquartered in a suburb of Portland, Oregon, employed approximately 35 employees who transferred to Kronos. The components of discontinued operations included in the consolidated statements of income consisted of (in thousands):

	Three Months Ended September 30,					Six Months Ended September 30,
	2012		2011			2012		2011
Revenue	$	—	$	1,464		$	—	$	3,142
Costs and expenses:
Cost of services		—		1,389			—		2,702
Member relations and marketing		—		28			—		128
Depreciation and amortization		—		—			—		—
Income from discontinued operations before provision for income taxes		—		47			—		312
Provision for income taxes		—		(17	)		—		(117	)
Net income from discontinued operations, net of provision for income taxes	$	—	$	30		$	—	$	195

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UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue	$ 110,758	$ 91,467	$ 214,900	$ 171,404
Costs and expenses:
Cost of services, excluding depreciation and amortization	56,989	49,759	115,355	92,914
Member relations and marketing	21,486	18,490	40,606	36,370
General and administrative	15,632	11,886	29,111	22,709
Depreciation and amortization	4,430	3,503	8,516	6,450
Operating income	12,221	7,829	21,312	12,961
Other income, net	688	448	1,264	1,245
Income from continuing operations before provision for income taxes and equity in loss of unconsolidated entity	12,909	8,277	22,576	14,206
Provision for income taxes	(4,944)	(3,104)	(8,646)	(5,327)
Equity in loss of unconsolidated entity	(592)		(2,716)
Net income from continuing operations	7,373	5,173	11,214	8,879
Discontinued operations:
Net income from discontinued operations		30		195
Net income before allocation to noncontrolling interest	7,373	5,203	11,214	9,074
Net loss attributable to noncontrolling interest	108		108
Net income attributable to common stockholders	$ 7,481	$ 5,203	$ 11,322	$ 9,074
Earnings per share-basic:
Net income from continuing operations attributable to common stockholders	$ 0.22	$ 0.16	$ 0.33	$ 0.27
Net loss from discontinued operations attributable to common stockholders		$ 0.00		$ 0.01
Net income attributable to common stockholders per share-basic	$ 0.22	$ 0.16	$ 0.33	$ 0.28
Earnings per share-diluted:
Net income from continuing operations attributable to common stockholders	$ 0.21	$ 0.15	$ 0.31	$ 0.26
Net loss from discontinued operations attributable to common stockholders		$ 0.00		$ 0.01
Net income attributable to common stockholders per share-diluted	$ 0.21	$ 0.15	$ 0.31	$ 0.27
Weighted average number of shares outstanding:
Basic	34,660	32,596	34,421	32,416
Diluted	36,253	34,366	36,154	34,082

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Other non-current assets

6 Months Ended

Sep. 30, 2012

Other non-current assets

Note 6. Other non-current assets

In June 2009, the Company invested in the convertible preferred stock of a private company that provides technology tools and support services to health care providers, including the Company’s members. In addition, the Company entered into a licensing agreement with that company. As part of its investment, the Company received warrants to purchase up to 6,015,000 shares of the company’s common stock at an exercise price of $1.00 per share as certain performance criteria are met. The warrants are exercisable through June 19, 2019. The warrants contain a net settlement feature and therefore are considered to be a derivative financial instrument. A $0.1 million downward adjustment was made to the fair value of the warrants during the three months ended September 30, 2012. The warrants are recorded at their fair value, which was $340,000 as of September 30, 2012 and $450,000 as of March 31, 2012, and are included in other non-current assets on the accompanying consolidated balance sheets. The change in the fair value of the warrants is recorded in other income, net on the accompanying consolidated statements of income. For additional information regarding the fair value of these warrants, see Note 10, “Fair value measurements.” The convertible preferred stock investment is recorded at cost, and the carrying amount of this investment as of September 30, 2012 of $5.0 million is included in other non-current assets on the accompanying consolidated balance sheets. The convertible preferred stock accrues dividends at an annual rate of 8% that are payable if and when declared by the investee’s board of directors. As of September 30, 2012, no dividends had been declared by the investee or recorded by the Company. This investment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of this asset may not be recoverable. The Company believes that no such impairment indicators existed during the six months ended September 30, 2012 or 2011.

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Investment in unconsolidated entity

6 Months Ended

Sep. 30, 2012

Investment in unconsolidated entity

Note 5. Investment in unconsolidated entity

On August 31, 2011, the Company entered into an agreement with UPMC to establish Evolent Health, Inc. (“Evolent”) for the purpose of driving provider-led, value-driven care with innovative technology, integrated data and analytics, and services. The Company provided $10.0 million and other non-cash contributions to Evolent for an initial equity interest of 44% and the right to appoint one person to Evolent’s board of directors. In addition, a member of the Company’s Board of Directors serves as the chief executive officer of Evolent. The Company exercises significant influence over Evolent, but does not control Evolent and is not the primary beneficiary of Evolent’s activities. The Company’s investment in Evolent is accounted for under the equity method of accounting, with the Company’s proportionate share of the income or loss recognized in the consolidated statements of income. In July 2012, Evolent completed a second round of financing. The Company did not participate in this second round, and as such, its equity interest was diluted. As a result of this dilution, the Company recognized a $1.1 million gain on its investment which is included in equity in loss of unconsolidated entity on the accompanying consolidated statements of income for the three and six months ended September 30, 2012. As of September 30, 2012, the Company’s equity interest in Evolent was 31%. The Company’s proportionate share of the losses of Evolent during the three and six months ended September 30, 2012 were $1.7 million and $3.8 million, respectively. Evolent is in the early stages of its business plan, and as a result, the Company expects Evolent to incur losses and require additional funding in the future. The Company’s investment in Evolent will be evaluated for impairment whenever events or changes in circumstances indicate that there may be an other-than-temporary decline in value. The Company believes that no such impairment indicators existed during the six months ended September 30, 2012.

The following is a summary of the financial position of Evolent, as of the dates presented (in thousands):

	As of
	September 30, 2012		March 31, 2012
	(unaudited)
Assets:
Cash	$	11,038	$	14,807
Other current assets		2,702		821
Intangible assets, net		2,312		2,755
Other non-current assets		3,465		1,152
Total assets	$	19,517	$	19,535
Liabilities and Members’ Equity:
Deferred revenue	$	4,976	$	200
Accounts payable and accrued liabilities		2,853		669
Long-term liabilities		359		359
Member’s equity		11,329		18,307
Total liabilities and member’s equity	$	19,517	$	19,535

The following is a summary of the operating results of Evolent for the periods presented (in thousands) (unaudited):

	Three Months  Ended September 30,					Six Months  Ended September 30,
	2012			2011		2012			2011
Revenue	$	2,193		$	—	$	2,262		$	—
Operating expenses		(7,440	)		—		(12,655	)		—
Depreciation and amortization		(178	)		—		(482	)		—
Interest, net		3			—		7			—
Net loss	$	(5,422	)	$	—	$	(10,868	)	$	—

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Subsequent events

6 Months Ended

Sep. 30, 2012

Subsequent events

Note 17. Subsequent events

On October 1, 2012, the Company purchased ActiveStrategy Inc., a Philadelphia-based performance improvement technology and consulting firm with unmatched solutions for tracking and augmenting organizational effectiveness, for a purchase price of $15.2 million. The total purchase price consists of an initial payment of $12.9 million and an additional $2.3 million which has been placed into escrow and which will be released if specified indemnity conditions are satisfied.

On October 31, 2012, the Company transferred 112,408 shares of its common stock to the former owners of Southwind to satisfy the component of the Southwind earn-out payable in the Company’s common stock.

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Revolving credit facility

6 Months Ended

Sep. 30, 2012

Revolving credit facility

Note 13. Revolving credit facility

On July 30, 2012, the Company entered into a $150.0 million five-year senior secured revolving credit facility (the “Credit Facility”) under a credit agreement, dated as of July 30, 2012, with the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party thereto. The Company incurred financing fees of $0.8 million in relation to this transaction. Under the Credit Facility, up to $150.0 million principal amount of borrowings and other credit extensions may be outstanding at any time, subject to compliance with specific financial ratios and the satisfaction of other customary conditions to borrowing. The maximum principal amount available under the credit agreement may be increased by up to an additional $50.0 million in minimum increments of $10.0 million at the Company’s election upon the satisfaction of specified conditions. The credit agreement contains a sublimit for up to $5.0 million principal amount of swing line loans outstanding at any time and a sublimit for the issuance of up to $10.0 million of letters of credit outstanding at any time. The facility loans may be borrowed, repaid and reborrowed from time to time during the term of the facility and will mature and be payable in full on July 30, 2017. Consequently, the amount outstanding under the Credit Facility at the end of a period may not be reflective of the total amounts outstanding during such period.

Amounts borrowed under the Credit Facility generally will bear interest at an annual rate calculated, at the Company’s option, on the basis of either (a) an alternate base rate plus the applicable margin for alternate base rate loans under the credit agreement, which ranges from 0.75% to 1.50% based on the Company’s total leverage ratio, or (b) an adjusted LIBO rate plus the applicable margin for eurocurrency loans under the credit agreement, which ranges from 1.75% to 2.50% based on the Company’s total leverage ratio. The Company is required to pay a commitment fee on the unutilized portion of the facility at an annual rate of between 0.25% and 0.40% based on the Company’s total leverage ratio.

As of September 30, 2012, there were no amounts outstanding under the Credit Facility and $150.0 million was available for borrowing.

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Goodwill and intangibles

6 Months Ended

Sep. 30, 2012

Goodwill and intangibles

Note 9. Goodwill and intangibles

Included in the Company’s goodwill and intangibles balances are goodwill and acquired intangibles and internally developed capitalized software for sale. Goodwill is not amortized as it has an estimated infinite life. Goodwill is reviewed for impairment at least annually as of March 31, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company believes that no such impairment indicators existed during the six months ended September 30, 2012 or 2011. There was no impairment of goodwill recorded in the six months ended September 30, 2012 or 2011.

Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives, which range from six months to ten years. As of September 30, 2012, the weighted average remaining useful life of acquired intangibles was approximately 4.5 years. As of September 30, 2012, the weighted average remaining useful life of internally developed intangibles was approximately 4.1 years.

The gross and net carrying balances and accumulated amortization of intangibles are as follows (in thousands):

			As of September 30, 2012							As of March 31, 2012
	Weighted average useful life		Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Intangibles
Internally developed intangible for sale:
Capitalized software		5.0	$	4,769	$	(650	)	$	4,119	$	3,048	$	(380	)	$	2,668
Acquired intangibles:
Developed software		4.9		6,450		(3,225	)		3,225		6,450		(2,567	)		3,883
Customer relationships		7.5		11,900		(3,780	)		8,120		11,900		(2,914	)		8,986
Trademarks		3.7		2,700		(1,838	)		862		2,700		(1,625	)		1,075
Non-compete agreements		4.3		1,100		(502	)		598		1,100		(393	)		707
Customer contracts		4.9		5,199		(3,388	)		1,811		5,199		(3,134	)		2,065
Total other intangibles			$	32,118	$	(13,383	)	$	18,735	$	30,397	$	(11,013	)	$	19,384

Amortization expense for intangible assets for the three and six months ended September 30, 2012, recorded in depreciation and amortization on the accompanying consolidated statements of income, was approximately $1.2 million and $2.4 million, respectively. Amortization expense for intangible assets for the three and six months ended September 30, 2011, recorded in depreciation and amortization on the accompanying consolidated statements of income, was approximately $1.5 million and $2.7 million, respectively. The following approximates the anticipated aggregate amortization expense to be recorded in depreciation and amortization on the consolidated statements of income for the remaining six months of the fiscal year ending March 31, 2013 and for each of the fiscal years ending March 31, 2014 through 2017: $2.4 million, $4.7 million, $4.5 million, $1.8 million, and $1.3 million, respectively, and $2.3 million thereafter.

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Income taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Tax Examination [Line Items]
Unrecognized Tax Benefits	$ 0		$ 0
Change in unrecognized tax benefits	0		0
Interest or penalties on unrecognized tax benefits	$ 0	$ 0	$ 0	$ 0

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Noncontrolling interests

6 Months Ended

Sep. 30, 2012

Noncontrolling interests

Note 7. Noncontrolling interests

On July 5, 2012, the Company entered into an agreement with an entity created for the sole purpose of providing consulting services for the Company on an exclusive basis. The Company’s relationship with the entity is governed by a services agreement and other documents which provide the entity’s owners the conditional right to require the Company to purchase their ownership interests (“Put Option”) at any time after certain conditions have been satisfied through December 31, 2014. As of September 30, 2012, these conditions had not been satisfied. These agreements also provide the Company a conditional right to require the entity’s owners to sell their ownership interests to the Company (“Call Option”) at any time between July 5, 2013 and December 31, 2014. The equity interest in this entity is classified as a redeemable noncontrolling interest which is presented outside of permanent equity as the redemption is not solely within the Company’s control. The redeemable noncontrolling interest is recorded at its initial fair value of $0.1 million and has not been subsequently adjusted, as management’s current judgment is that it is not probable that the Put Option will become exercisable prior to its expiration due to uncertainty in the achievement of certain performance conditions outlined in the agreement. If the Put Option were to become exercisable in the future, the estimated maximum total redemption amount of the redeemable noncontrolling interest under the Put Option would be approximately $7.5 million, which would be recorded as a reduction to net income available to common stockholders.

The Company has determined that this entity meets the definition of a variable interest entity over which it has significant influence and, as a result, has consolidated the results of this entity into its consolidated financial statements. Noncontrolling interests represent the entity’s owners’ claims on consolidated investments where the Company owns less than a 100% interest. As of September 30, 2012, the Company has a 0% ownership interest in this entity. The Company records these interests at their initial fair value, adjusting the basis prospectively for the noncontrolling holders’ share of the respective consolidated investments’ results of operations and applicable changes in ownership.

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Property and equipment

6 Months Ended

Sep. 30, 2012

Property and equipment

Note 8. Property and equipment

Property and equipment consists of leasehold improvements, furniture, fixtures, equipment, capitalized internal software development costs, and acquired developed technology. Property and equipment is stated at cost, less accumulated depreciation and amortization. In certain of its membership programs, the Company provides software tools under hosting arrangements where the software application resides on the Company’s or its service providers’ hardware. The members do not take delivery of the software and only receive access to the software tools during the term of their membership agreement. Software development costs that are incurred in the preliminary project stage are expensed as incurred. During the development stage, direct consulting costs and payroll-related costs for employees that are directly associated with each project are capitalized and amortized over the estimated useful life of the software once placed into operation. Capitalized software is amortized using the straight-line method over its estimated useful life, which is generally five years. Replacements and major improvements are capitalized, while maintenance and repairs are charged to expense as incurred.

The acquired developed technology is classified as software within property and equipment because the developed software application resides on the Company’s or its service providers’ hardware. Amortization for acquired developed software is included in depreciation and amortization on the Company’s consolidated statements of income. Developed software obtained through acquisitions is amortized over its weighted average estimated useful life of approximately nine years based on the cash flow estimate used to determine the value of the asset.

Furniture, fixtures, and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are depreciated using the straight-line method over the shorter of the estimated useful lives of the assets or the lease term. There are no capitalized leases included in property and equipment for the periods presented.

The amount of depreciation expense recognized on plant, property, and equipment during the three and six months ended September 30, 2012, was approximately $3.2 million and $6.1 million, respectively. The amount of depreciation expense recognized on plant, property, and equipment during the three and six months ended September 30, 2011 was approximately $2.1 million and $4.1 million, respectively.

Internally developed capitalized software is classified as software within property and equipment and has an estimated useful life of five years. As of September 30, 2012 and 2011, the carrying value of internally developed capitalized software was $22.5 million and $11.3 million, respectively. Property and equipment consists of the following (in thousands):

	As of
	September 30, 2012			March 31, 2012
Leasehold improvements	$	24,112		$	23,692
Furniture, fixtures, and equipment		30,932			26,529
Software		52,950			43,211
Property and equipment, gross		107,994			93,432
Accumulated depreciation and amortization		(49,923	)		(43,779	)
Property and equipment, net	$	58,071		$	49,653

The Company evaluates its long-lived assets for impairment when changes in circumstances exist that suggest the carrying value of a long-lived asset may not be fully recoverable. If an indication of impairment exists, and the Company’s net book value of the related assets is not fully recoverable based upon an analysis of its estimated undiscounted future cash flows, the assets are written down to their estimated fair value. The Company did not recognize any material impairment losses on any of its long-lived assets during the six months ended September 30, 2012 or 2011.

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Fair value measurements

6 Months Ended

Sep. 30, 2012

Fair value measurements

Note 10. Fair value measurements

Financial assets and liabilities

The estimated fair values of financial instruments are determined based on relevant market information. These estimates involve uncertainty and cannot be determined with precision. The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, and common stock warrants. In addition, contingent earn-out liabilities resulting from business combinations are recorded at fair value. The following methods and assumptions are used to estimate the fair value of each class of financial assets or liabilities that are valued on a recurring basis.

Cash and cash equivalents. This includes all cash and liquid investments with an original maturity of three months or less from the date acquired. The carrying amount approximates fair value because of the short maturity of these instruments. Cash equivalents consist of money market funds with original maturity dates of less than three months for which the fair value is based on quoted market prices. The Company’s cash and cash equivalents are held at major commercial banks.

Marketable securities. The Company’s marketable securities, consisting of U.S. government-sponsored enterprise obligations and various state tax-exempt notes and bonds, are classified as available-for-sale and are carried at fair market value based on quoted market prices.

Common stock warrants. The Company holds warrants to purchase common stock in an entity that provides technology tools and support services to health care providers, including the Company’s members, that are exercisable for up to 6,015,000 of the shares of the entity, as certain performance criteria are met. The common stock warrants meet the definition of a derivative and are carried at fair value in other non-current assets on the accompanying consolidated balance sheets. Gains or losses from changes in the fair value of the warrants are recognized in other income, net on the accompanying consolidated statements of income. See Note 6, “Other non-current assets,” for additional information. The fair value of these warrants is determined using a Black-Scholes-Merton model. Key inputs into this methodology are the estimate of underlying value of the common shares of the entity that issued the warrants and the estimate of level of performance criteria that will be achieved. The entity that issued the warrants is private, and the estimate of performance criteria to be met is specific to the Company. These inputs are unobservable and are considered key estimates made by the Company.

Contingent earn-out liabilities. This class of financial liabilities represents the Company’s estimated fair value of the contingent earn-out liabilities related to acquisitions based on probability assessments of certain performance achievements during the earn-out periods. Contingent earn-out liabilities are included in other long-term liabilities on the accompanying consolidated balance sheets. See Note 4, “Acquisitions,” for additional information.

Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The valuation can be determined using widely accepted valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). As a basis for applying a market-based approach in fair value measurements, GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Observable market-based inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3—Unobservable inputs that are supported by little or no market activity, such as discounted cash flow methodologies.

Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no significant transfers between Level 1, Level 2, or Level 3 during the six months ended September 30, 2012 or 2011.

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the necessary disclosures are as follows (in thousands):

	Fair value as of September 30,		Fair value measurement as of September 30, 2012 using fair value hierarchy
	2012		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	79,927	$	79,927	$	—	$	—
Available-for-sale marketable securities (2)		147,847		147,847		—		—
Common stock warrants (3)		340		—		—		340
Financial liabilities
Contingent earn-out liabilities (4)		22,500		—		—		22,500
	Fair value as of March 31,		Fair value measurement as of March 31, 2012 using fair value hierarchy
	2012		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	60,642	$	60,642	$	—	$	—
Available-for-sale marketable securities (2)		127,444		127,444		—		—
Common stock warrants (3)		450		—		—		450
Financial liabilities
Contingent earn-out liabilities (4)		20,200		—		—		20,200

(1) Fair value is based on quoted market prices.

(2) Fair value is determined using quoted market prices of the assets. For further detail, see Note 3, “Marketable securities.”

(3) The fair value of the common stock warrants as of September 30, 2012 and March 31, 2012 was calculated to be $0.23 per share and $0.24 per share, respectively, using the Black-Scholes-Merton model. The significant assumptions as of September 30, 2012 were as follows: risk-free interest rate of 1.0%; expected term of 6.72 years; expected volatility of 40.93%; dividend yield of 0.0%; weighted average exercise price of $1.00 per share; and a range of warrants to become exercisable of between 1,400,000 and 1,800,000 shares. The significant assumptions as of March 31, 2012 were as follows: risk-free interest rate of 1.1%; expected term of 6.97 years; expected volatility of 41.03%; dividend yield of 0.0%; weighted average exercise price of $1.00 per share; and a range of warrants to become exercisable of between 1,400,000 and 1,800,000 shares.

(4) This fair value measurement is based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and general macro-economic environment and industry trends.

Common stock warrants

The Company’s fair value estimate of the common stock warrants received in connection with its June 2009 investment was zero as of the investment date. Changes in the fair value of the common stock warrants subsequent to the investment date are recognized in earnings in the periods during which the estimated fair value changes. The change in the fair value of the common stock warrants during the three months ended September 30, 2012 was driven primarily by a slight decrease in the estimated performance targets that will be achieved. The following table represents a reconciliation of the change in the fair value of the common stock warrants for the three and six months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30,					Six Months Ended September 30,
	2012			2011		2012			2011
Beginning balance	$	450		$	—	$	450		$	—
Fair value change in common stock warrants (1)		(110	)		—		(110	)		—
Ending balance	$	340		$	—	$	340		$	—

(1) Amounts were recognized in other income, net on the accompanying consolidated statements of income.

Contingent earn-out liabilities

The Company entered into an earn-out agreement in connection with its acquisition of Southwind Health Partners, L.L.C. and Southwind Navigator, LLC (together, “Southwind”) on December 31, 2009. The additional contingent payments, which have no guaranteed maximum, become due and payable to the former owner of the Southwind business if certain milestones are met over the evaluation periods beginning at the acquisition date and extending through December 31, 2014. The Company’s fair value estimate of the Southwind earn-out liability was $5.6 million as of the date of acquisition. As of September 30, 2012, based on current facts and circumstances, the estimated aggregate fair value of this contingent obligation has increased to $18.4 million, which will be paid at various intervals, if earned, over the evaluation periods beginning on the acquisition date and extending through December 31, 2014. The fair value of the Southwind earn-out liability is impacted by changes in estimates regarding expected operating results, changes in the valuation of the Company’s stock price, and an applied discount rate which was 15.0% as of September 30, 2012. As of September 30, 2012, $3.1 million had been earned and paid to the former owners. The final payments will be made in a combination of cash and/or shares of the Company’s common stock.

The Company entered into an earn-out agreement in connection with its acquisition of substantially all the assets of Cielo MedSolutions, LLC (“Cielo”) on February 1, 2011. The additional contingent payments, which will not exceed $7.0 million, become due and payable to the former owner of the Cielo business if certain product development and subscription milestones are met over the evaluation periods beginning at the acquisition date and extending through July 31, 2012. The Company’s fair value estimate of the Cielo earn-out liability, which is payable in cash, was $4.4 million as of the date of acquisition. The estimated aggregate fair value of the remaining contingent obligation for Cielo as of September 30, 2012 was $1.4 million. The fair value of the Cielo earn-out liability is impacted by estimates regarding the level of performance targets to be achieved and a discount rate, which was 14.5% as of September 30, 2012. As of September 30, 2012, $3.0 million has been earned and paid to the former owners.

The Company’s fair value estimate of the PivotHealth earn-out liability, which is payable in cash, was $2.9 million as of the date of acquisition. The estimated aggregate fair value of the contingent obligation for PivotHealth as of September 30, 2012 was $2.8 million. The fair value of the PivotHealth earn-out liability is impacted by changes in estimates regarding expected operating results and a discount rate, which was 15.5% as of September 30, 2012. See Note 4, “Acquisitions,” for additional information regarding the PivotHealth acquisition and related earn-out liability.

Changes in the fair value of the contingent earn-out liabilities subsequent to the acquisition date, including changes arising from events that occurred after the acquisition date, such as changes in the Company’s estimate of performance achievements, discount rates, and stock price, are recognized in earnings in the periods during which the estimated fair value changes. The following table represents a reconciliation of the change in the contingent earn-out liabilities for the three and six months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
Beginning balance	$	22,900		$	18,700		$	20,200		$	15,500
Fair value change in Southwind contingent earn-out liability (1)		(100	)		2,600			3,700			5,800
Fair value change in Cielo contingent earn-out liability (1)		—			(300	)		100			(300	)
Fair value change in PivotHealth contingent earn-out liability (1)		100			—			(300	)		—
Southwind earn-out payment		(400	)		(300	)		(800	)		(300	)
Addition of PivotHealth contingent earn-out liability		—			2,900			—			2,900
Ending balance	$	22,500		$	23,600		$	22,900		$	23,600

(1) Amounts were recognized in cost of services on the accompanying consolidated statements of income.

Non-financial assets and liabilities

Certain assets and liabilities are not measured at fair value on an ongoing basis but instead are measured at fair value on a non-recurring basis; that is, such assets and liabilities are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). During the six months ended September 30, 2012 and 2011, no fair value adjustments or material fair value measurements were required for non-financial assets or liabilities.

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Aggregate Value, Amortized Cost, Gross Unrealized Gains, and Gross Unrealized Losses on Available-for-Sale Marketable Securities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Fair value	$ 147,847	$ 127,444
Amortized cost	144,331	125,571
Gross unrealized gains	3,755	2,797
Gross unrealized losses	239	924
U.S. government-sponsored enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	29,688	33,472
Amortized cost	29,513	33,543
Gross unrealized gains	176	130
Gross unrealized losses	1	201
Tax exempt obligations of states
Schedule of Available-for-sale Securities [Line Items]
Fair value	118,159	93,972
Amortized cost	114,818	92,028
Gross unrealized gains	3,579	2,667
Gross unrealized losses	$ 238	$ 723

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Common Stock Options Granted (Detail) (USD $)	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Number of options
Outstanding, Beginning balance	3,812,228	5,059,198
Number of options,Granted	347,760	591,412
Number of options, Exercised	(1,036,456)	(793,924)
Number of options, Forfeited	(4,500)	(36,372)
Number of options, Cancellations
Outstanding, Ending balance	3,119,032	4,820,314
Exercisable, Ending balance	1,546,512
Weighted Average Exercise Price
Outstanding, Beginning balance	$ 17.04	$ 16.30
Weighted Average Grant Date Fair Value, Granted	$ 43.83	$ 24.82
Weighted Average Exercise Price, Exercised	$ 15.64	$ 16.50
Weighted Average Exercise Price, Forfeited	$ 9.26	$ 18.89
Weighted Average Exercise Price, Cancellations
Outstanding, Ending balance	$ 20.51	$ 17.30
Exercisable, Ending balance	$ 17.60

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Income taxes

6 Months Ended

Sep. 30, 2012

Income taxes

Note 15. Income taxes

The Company uses a more-likely-than-not recognition threshold based on the technical merits of the tax position taken for the financial statement recognition and measurement of a tax position. If a tax position does not meet the more-likely-than-not initial recognition threshold, no benefit is recorded in the financial statements. The Company does not currently anticipate that the total amounts of unrecognized tax benefits will significantly change within the next 12 months. The Company classifies interest and penalties on any unrecognized tax benefits as a component of the provision for income taxes. No interest or penalties were recognized in the consolidated statements of income for the three or six months ended September 30, 2012 or 2011. The Company files income tax returns in U.S. federal and state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, and local tax examinations for filings in major tax jurisdictions before 2008.

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Investment in unconsolidated entity (Tables)

6 Months Ended

Sep. 30, 2012

Summary of Financial Position and Operating Results of Evolent

The following is a summary of the financial position of Evolent, as of the dates presented (in thousands):

	As of
	September 30, 2012		March 31, 2012
	(unaudited)
Assets:
Cash	$	11,038	$	14,807
Other current assets		2,702		821
Intangible assets, net		2,312		2,755
Other non-current assets		3,465		1,152
Total assets	$	19,517	$	19,535
Liabilities and Members’ Equity:
Deferred revenue	$	4,976	$	200
Accounts payable and accrued liabilities		2,853		669
Long-term liabilities		359		359
Member’s equity		11,329		18,307
Total liabilities and member’s equity	$	19,517	$	19,535

The following is a summary of the operating results of Evolent for the periods presented (in thousands) (unaudited):

	Three Months  Ended September 30,					Six Months  Ended September 30,
	2012			2011		2012			2011
Revenue	$	2,193		$	—	$	2,262		$	—
Operating expenses		(7,440	)		—		(12,655	)		—
Depreciation and amortization		(178	)		—		(482	)		—
Interest, net		3			—		7			—
Net loss	$	(5,422	)	$	—	$	(10,868	)	$	—

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Reconciliation of Change in Fair Value of Common Stock Warrants (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012		Sep. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning balance	$ 450		$ 450
Fair value change in common stock warrants	(110)	[1]	(110)	[1]
Ending balance	$ 340		$ 340

[1] Amounts were recognized in other income, net on the accompanying consolidated statements of income.

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Noncontrolling Interests - Additional Information (Detail) (USD $)	Sep. 30, 2012
Noncontrolling Interest [Line Items]
Redeemable noncontrolling interest	$ 0.001
Estimated maximun total redemption amount	$ 0.075
Noncontrolling interest ownership percentage	10000.00%
Ownership interest	0.00%

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UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net income attributable to common stockholders	$ 7,481	$ 5,203	$ 11,322	$ 9,074
Other comprehensive income:
Net unrealized gains on marketable securities, net of tax	769	606	1,107	1,676
Comprehensive income	$ 8,250	$ 5,809	$ 12,429	$ 10,750

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Acquisitions

6 Months Ended

Sep. 30, 2012

Acquisitions

Note 4. Acquisitions

PivotHealth

On August 1, 2011, the Company acquired for cash substantially all the assets of PivotHealth, LLC (“PivotHealth”), a leading physician practice management firm. The Company acquired PivotHealth to supplement its existing physician practice management capabilities and provide new growth opportunities with the addition of PivotHealth’s expertise in long-term physician practice management. The total purchase price, net of cash acquired, of $19.8 million consisted of an initial payment of $15.0 million of cash; the fair value of estimated additional, contingent cash payments of $2.9 million; and an additional $1.9 million placed into escrow, which was released on August 1, 2012. The contingent cash payments, which have no guaranteed minimum or maximum, will become due and payable to the former owner of the PivotHealth business if certain revenue targets are achieved over the evaluation periods beginning at the acquisition date and extending through December 31, 2014. A $0.4 million downward adjustment was made to the fair value of the liabilities for such contingent cash payments during the three months ended June 30, 2012. A $0.1 million upward adjustment was made to the fair value of the liabilities for such contingent cash payments during the three months ended September 30, 2012. These adjustments were recorded in cost of services on the accompanying consolidated statements of income. See Note 10, “Fair value measurements,” for additional information.

The total purchase price was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values as of August 1, 2011. The Company’s fair value of identifiable tangible and intangible assets was determined by using estimates and assumptions in combination with a valuation using an income approach from a market participant perspective. Of the total estimated purchase price, $1.8 million was allocated to acquired tangible assets, $1.0 million was allocated to assumed liabilities, and $6.4 million was allocated to intangible assets, which consist of the value assigned to customer related intangibles of $6.0 million, primarily customer relationships and trademarks, and employee related intangibles of $0.4 million. The acquired customer and employee related intangibles have estimated lives ranging from six months to nine years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 6.5 years. Approximately $12.6 million was allocated to goodwill, which represents synergistic benefits expected to be generated from scaling PivotHealth’s offerings across the Company’s large membership base. Goodwill is deductible for tax purposes.

The financial results of PivotHealth are included in the Company’s consolidated financial statements from the date of acquisition. Pro forma financial information for this acquisition has not been presented because the effects were not material to the Company’s historical consolidated financial statements.

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Earnings per share - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Fully diluted shares outstanding	112,000	110,000	112,000	110,000
Stock Compensation Plan [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share-based compensation awards	400,000	300,000	400,000	300,000
Southwind [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Fully diluted shares outstanding	112,408	112,408	112,408	112,408

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Property and equipment (Tables)

6 Months Ended

Sep. 30, 2012

Property and Equipment

Property and equipment consists of the following (in thousands):

	As of
	September 30, 2012			March 31, 2012
Leasehold improvements	$	24,112		$	23,692
Furniture, fixtures, and equipment		30,932			26,529
Software		52,950			43,211
Property and equipment, gross		107,994			93,432
Accumulated depreciation and amortization		(49,923	)		(43,779	)
Property and equipment, net	$	58,071		$	49,653

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Investment in unconsolidated entity - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended	9 Months Ended
	Aug. 31, 2012	Sep. 30, 2012	Sep. 30, 2012
Schedule of Equity Method Investments [Line Items]
Initial Contribution	$ 10.0
Initial equity interest	44.00%	31.00%	31.00%
Recognized gain on investment included in equity in loss		1.1	1.1
Proportionate share of the losses		$ 1.7	$ 3.8

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Earnings per share

6 Months Ended

Sep. 30, 2012

Earnings per share

Note 14. Earnings per share

Basic earnings per share is computed by dividing net income attributable to common stockholders by the number of weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to common stockholders by the number of weighted average common shares increased by the dilutive effects of potential common shares outstanding during the period. The number of potential common shares outstanding is determined in accordance with the treasury stock method, using the Company’s prevailing tax rates. Certain potential common share equivalents were not included in the computation because their effect was anti-dilutive. Fully diluted shares outstanding for both the three and six months ended September 30, 2012 and 2011 includes 112,408 contingently issuable shares related to the component of the Southwind earn-out estimated to be settled in stock. For additional information regarding these shares, see Note 10, “Fair value measurements.”

A reconciliation of basic to diluted weighted average common shares outstanding is as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Basic weighted average common shares outstanding		34,660		32,596		34,421		32,416
Effect of dilutive outstanding stock-based awards		1,481		1,660		1,621		1,556
Dilutive impact of earn-out liability		112		110		112		110
Diluted weighted average common shares outstanding		36,253		34,366		36,154		34,082

In the three months ended September 30, 2012 and 2011, 0.4 million and 0.3 million shares, respectively, related to share-based compensation awards have been excluded from the calculation of the effect of dilutive outstanding stock-based awards shown above because their effect was anti-dilutive. In the six months ended September 30, 2012 and 2011, 0.4 million and 0.3 million shares, respectively, related to share-based compensation awards have been excluded from the calculation of the effect of dilutive outstanding stock-based awards shown above because their effect was anti-dilutive.