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, 2013

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, 2013, the registrant had outstanding 36,043,486 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
ITEM 1. Financial Statements		1
Consolidated Balance Sheets as of September 30, 2013 (unaudited) and March 31, 2013		1
Unaudited Consolidated Statements of Income for the Three and Six Months Ended September 30, 2013 and 2012		2
Unaudited Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September  30, 2013 and 2012		3
Unaudited Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2013 and 2012		4
Notes to Unaudited Consolidated Financial Statements		5
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk		25
ITEM 4. Controls and Procedures		26
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 AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	September 30, 2013			March 31, 2013
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	73,383		$	57,829
Marketable securities, current		4,501			16,611
Membership fees receivable, net		387,805			370,321
Prepaid expenses and other current assets		19,976			15,477
Deferred income taxes, current		9,928			7,664
Total current assets		495,593			467,902
Property and equipment, net		86,928			71,174
Intangible assets, net		31,391			32,381
Deferred incentive compensation and other charges		79,460			73,502
Deferred income taxes, net of current portion		4,427			3,888
Marketable securities, net of current portion		122,309			140,228
Goodwill		104,478			95,540
Investments in and advances to unconsolidated entities		20,000			6,265
Other non-current assets		5,550			5,550
Total assets	$	950,136		$	896,430
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Deferred revenue, current	$	414,441		$	398,541
Accounts payable and accrued liabilities		79,692			75,089
Accrued incentive compensation		16,111			21,033
Total current liabilities		510,244			494,663
Deferred revenue, net of current portion		114,337			104,484
Other long-term liabilities		16,182			15,866
Total liabilities		640,763			615,013
Redeemable noncontrolling interest		100			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, 35,986,832 and 35,138,465 shares issued and outstanding as of September 30, 2013 and March 31, 2013, respectively		360			351
Additional paid-in capital		405,483			375,622
Accumulated deficit		(94,272	)		(95,809	)
Accumulated other comprehensive (loss) income		(2,190	)		1,261
Total stockholders’ equity controlling interest		309,381			281,425
Equity attributable to noncontrolling interest		(108	)		(108	)
Total stockholders’ equity		309,273			281,317
Total liabilities and stockholders’ equity	$	950,136		$	896,430

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

1

THE ADVISORY BOARD COMPANY AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

	Three Months Ended September 30,						Six Months Ended September 30,
	2013			2012			2013			2012
Revenue	$	128,341		$	110,758		$	251,557		$	214,900
Costs and expenses:
Cost of services, excluding depreciation and amortization		69,857			56,989			135,807			115,355
Member relations and marketing		22,198			21,486			44,386			40,606
General and administrative		18,010			15,632			35,996			29,111
Depreciation and amortization		6,886			4,430			13,240			8,516
Operating income		11,390			12,221			22,128			21,312
Other income, net		1,091			688			1,614			1,264
Income before provision for income taxes and equity in gain (loss) of unconsolidated entities		12,481			12,909			23,742			22,576
Provision for income taxes		(4,805	)		(4,944	)		(9,140	)		(8,646	)
Equity in gain (loss) of unconsolidated entities		1,326			(592	)		(1,907	)		(2,716	)
Net income before allocation to noncontrolling interest		9,002			7,373			12,695			11,214
Net loss attributable to noncontrolling interest		—			108			—			108
Net income attributable to common stockholders	$	9,002		$	7,481		$	12,695		$	11,322
Earnings per share
Net income attributable to common stockholders per share—basic	$	0.25		$	0.22		$	0.36		$	0.33
Net income attributable to common stockholders per share—diluted	$	0.24		$	0.21		$	0.35		$	0.31
Weighted average number of shares outstanding:
Basic		35,883			34,660			35,686			34,421
Diluted		36,897			36,253			36,758			36,154

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

2

THE ADVISORY BOARD COMPANY AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

	Three Months Ended September 30,					Six Months Ended September 30,
	2013			2012		2013			2012
Net income attributable to common stockholders	$	9,002		$	7,481	$	12,695		$	11,322
Other comprehensive income:
Net unrealized (losses) gains on available-for-sale securities, net of income taxes of ($71) and $471 for the three months ended September 30, 2013 and 2012, respectively, and ($2,115) and $678 for the six months ended September 30, 2013 and 2012, respectively		(117	)		769		(3,451	)		1,107
Comprehensive income	$	8,885		$	8,250	$	9,244		$	12,429

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

3

THE ADVISORY BOARD COMPANY AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six Months Ended September 30,
	2013			2012
Cash flows from operating activities:
Net income before allocation to noncontrolling interest	$	12,695		$	11,214
Adjustments to reconcile net income before allocation to noncontrolling interest to net cash provided by operating activities:
Depreciation and amortization		13,240			8,516
Deferred income taxes		(737	)		(408	)
Excess tax benefits from stock-based awards		(12,839	)		(9,721	)
Stock-based compensation expense		9,066			6,911
Amortization of marketable securities premiums		1,358			958
Loss on investment in common stock warrants		—			110
Equity in loss of unconsolidated entities		1,907			2,716
Changes in operating assets and liabilities:
Membership fees receivable		(16,825	)		(36,654	)
Prepaid expenses and other current assets		8,340			(6,252	)
Deferred incentive compensation and other charges		(5,958	)		(3,958	)
Deferred revenue		25,459			56,685
Accounts payable and accrued liabilities		6,281			22,456
Acquisition-related earn-out payments		(1,812	)		(1,182	)
Accrued incentive compensation		(4,922	)		(6,524	)
Other long-term liabilities		316			(3,976	)
Net cash provided by operating activities		35,569			40,891
Cash flows from investing activities:
Purchases of property and equipment		(23,585	)		(14,562	)
Capitalized external use software development costs		(2,309	)		(1,723	)
Investment in and loans to unconsolidated entities		(15,641	)		—
Cash paid for acquisition, net cash acquired		(11,482	)		—
Redemptions of marketable securities		43,189			23,220
Purchases of marketable securities		(19,824	)		(42,889	)
Net cash used in investing activities		(29,652	)		(35,954	)
Cash flows from financing activities:
Proceeds from issuance of common stock from exercise of stock options		13,497			16,205
Withholding of shares to satisfy minimum employee tax withholding for vested restricted stock units		(5,796	)		(3,844	)
Proceeds from issuance of common stock under employee stock purchase plan		256			165
Excess tax benefits from stock-based awards		12,839			9,721
Contributions from noncontrolling interest		—			100
Purchases of treasury stock		(11,159	)		(7,999	)
Net cash provided by financing activities		9,637			14,348
Net increase in cash and cash equivalents		15,554			19,285
Cash and cash equivalents, beginning of period		57,829			60,642
Cash and cash equivalents, end of period	$	73,383		$	79,927

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

4

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 through discrete programs to hospitals, health systems, pharmaceutical and biotech companies, health care insurers, medical device companies, and colleges, universities, and other health care focused and educational institutions. Members of each renewable membership 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, 2013 and the Company’s quarterly report on Form 10-Q for the quarterly period ended June 30, 2013. The unaudited consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and a consolidated variable interest entity. The Company uses the equity method to account for equity investments in instances in which it owns common stock or securities deemed to be in-substance common stock and has the ability to exercise significant influence, but not control, over the investee and for all investments in partnerships or limited liability corporations where the investee maintains separate capital accounts for each investor. Investments in which the Company holds securities that are not in-substance common stock, or holds common stock or in-substance common stock, but has little or no influence are accounted for using the cost method. All significant intercompany transactions and balances have been eliminated. 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, 2013 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, 2013 may not be indicative of the results that may be expected for the Company’s fiscal year ending March 31, 2014, or any other period.

Revision to balance sheet and statement of cash flows

The accompanying March 31, 2013 consolidated balance sheet has been adjusted to correct immaterial errors in the previously reported amounts of membership fees receivable and deferred revenue. This correction resulted in an increase in membership fees receivable of $18.7 million, an increase in current deferred revenue of $11.8 million, and an increase in deferred revenue, net of current of $6.9 million.

Similar errors affecting membership fees receivable and deferred revenue were identified and corrected in the accompanying consolidated statement of cash flows for the six months ended September 30, 2012. Specifically, membership fees receivable was decreased by $1.0 million and deferred revenue was decreased by the same amount.

These corrections have no effect on the previously reported consolidated statements of income or stockholders’ equity for any period. The errors affected only balances within changes in working capital reported in cash flows from operating activities. Total cash flows from operating activities was unaffected by the corrections.

Note 2. Recent accounting pronouncements

In July 2013, the Financial Accounting Standards Board issued accounting guidance related to income taxes, which requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward when settlement in this manner is available under the tax law. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The Company will adopt this guidance for its fiscal year beginning April 1, 2014. The Company does not expect the adoption of this guidance to have a material effect on its financial position or results of operations.

5

Note 3. Acquisitions

Medical Referral Source, Inc.

On July 8, 2013, the Company completed the acquisition for cash of all of the issued and outstanding capital stock of Medical Referral Source, Inc. (“MRS”) to supplement its existing physician referral programs and to provide new growth opportunities. The total purchase price, net of cash acquired, was $11.5 million, of which $2.3 million is reserved in escrow to secure indemnification and other obligations and will be released in total by July 28, 2015 if specified indemnity conditions are satisfied. This indemnity escrow is not carried on the accompanying consolidated balance sheets.

The total purchase price was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values as of July 8, 2013. 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, $0.7 million was allocated to accounts receivable, $0.2 million to deferred tax assets, and $0.4 million to assumed liabilities, which consists of $0.3 million of acquired deferred revenue and $0.1 million of accounts payable. Of the total estimated purchase price, $2.1 million was allocated to intangible assets, which consist of the value assigned to acquired technology related intangibles of $1.7 million and customer relationship related intangibles of $0.4 million. The acquired intangible assets have estimated lives ranging from three years to eight years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 4.0 years. Approximately $8.9 million was allocated to goodwill, which represents synergistic benefits expected to be generated from scaling MRS’s offerings across the Company’s large membership base. Goodwill is not deductible for tax purposes.

The financial results of MRS 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.

360Fresh, Inc.

On November 15, 2012, the Company acquired for cash all of the issued and outstanding capital stock of 360Fresh, Inc. (“360Fresh”), a provider of clinical data analytics. The transaction enhances the Company’s existing suite of physician performance management solutions through the addition of unique technology that transforms the data from medical records into actionable insights to improve patient quality, reduce costs, and enhance productivity for health systems. The total purchase price, net of cash acquired, of $19.5 million consisted of an initial payment of $13.6 million of cash, the fair value of estimated additional contingent cash payments of $2.5 million, and an additional $3.4 million placed into escrow, which will be released by May 15, 2014 if specified indemnity conditions are satisfied. This indemnity escrow is not carried on the accompanying consolidated balance sheets. The contingent cash payments, which will not exceed $8.0 million and have no guaranteed minimum, will become due and payable to the former stockholders of 360Fresh if certain revenue targets are achieved over evaluation periods beginning at the acquisition date and extending through August 15, 2014. Upward adjustments of $0.1 million and $0.4 million were made to the fair value of the liabilities for such contingent cash payments during the three and six months ended September 30, 2013, respectively. The adjustments were recorded in cost of services on the accompanying consolidated statements of income and increased the liability to $2.9 million as of September 30, 2013. See Note 4, “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 November 15, 2012. 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, $0.3 million was allocated to acquired accounts receivable and $4.1 million was allocated to assumed liabilities, which consist of $4.0 million of deferred tax liabilities and $0.1 million of acquired deferred revenue. Of the total estimated purchase price, $9.9 million was allocated to intangible assets, which consist of the value assigned to acquired technology related intangibles of $9.8 million and employee related intangibles of $0.1 million. The acquired technology and employee related intangibles have estimated lives ranging from four years to seven years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 7.0 years. Approximately $13.4 million was allocated to goodwill, which represents synergistic benefits expected to be generated from incorporating 360Fresh’s technology capabilities into the Company’s software programs and scaling their existing products across the Company’s large membership base. Goodwill is not deductible for tax purposes.

The financial results of 360Fresh 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.

6

ActiveStrategy, Inc.

On October 1, 2012, the Company acquired for cash all of the issued and outstanding capital stock of ActiveStrategy, Inc. (“ActiveStrategy”), a Philadelphia-based performance improvement technology and consulting firm with innovative solutions for tracking and augmenting organizational effectiveness. This transaction enhances the Company’s existing performance improvement technology capabilities. The total purchase price, net of cash acquired, of $14.9 million consisted of an initial payment of $12.6 million of cash and an additional $2.3 million that has been placed into escrow and will be released by March 12, 2014 if specified indemnity conditions are satisfied. This indemnity escrow is not carried on the accompanying consolidated balance sheets.

The total purchase price was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values as of October 1, 2012. 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, $1.5 million was allocated to net acquired tangible assets, which consist of accounts receivable of $1.3 million, deferred tax assets, net of $0.9 million, and other current assets of $0.3 million, netted by $1.0 million of acquired deferred revenue. Of the total estimated purchase price, $5.5 million was allocated to intangible assets, which consist of the value assigned to acquired technology related intangibles of $3.0 million, customer relationship and employee related intangibles of $1.0 million, and trademarks of $1.5 million. The acquired intangible assets have estimated lives ranging from four years to eleven years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 7.2 years. Approximately $7.9 million was allocated to goodwill, which represents synergistic benefits expected to be generated from scaling ActiveStrategy’s offerings across the Company’s large membership base. Goodwill is not deductible for tax purposes.

The financial results of ActiveStrategy 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 4. 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 10, “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 the 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 privately held 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 3, “Acquisitions,” for additional information.

7

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, 2013 or 2012.

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, 2013 using fair value hierarchy
	2013		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	73,383	$	73,383	$	—	$	—
Available-for-sale marketable securities (2)		126,810		126,810		—		—
Common stock warrants (3)		550		—		—		550
Financial liabilities
Contingent earn-out liabilities (4)		13,200		—		—		13,200
	Fair value as of March 31,		Fair value measurement as of March 31, 2013 using fair value hierarchy
	2013		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	57,829	$	57,829	$	—	$	—
Available-for-sale marketable securities (2)		156,839		156,839		—		—
Common stock warrants (3)		550		—		—		550
Financial liabilities
Contingent earn-out liabilities (4)		15,200		—		—		15,200

(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 5, “Marketable securities.”

(3) The fair value of the common stock warrants as of September 30, 2013 and March 31, 2013 was calculated to be $0.39 per share using a Black-Scholes-Merton model. The significant assumptions as of September 30, 2013 were as follows: risk-free interest rate of 1.7%; expected term of 5.72 years; expected volatility of 38.93%; dividend yield of 0.0%; weighted average share price of $1.00 per share; and expected warrants to become exercisable of approximately 1,400,000 shares. The significant assumptions as of March 31, 2013 were as follows: risk-free interest rate of 1.0%; expected term of 6.22 years; expected volatility of 39.38%; dividend yield of 0.0%; weighted average share price of $1.00 per share; and expected warrants to become exercisable of approximately 1,400,000 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 macroeconomic environment and industry trends.

8

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 attributable primarily to 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, 2013 and 2012 (in thousands):

	Three Months Ended September 30,					Six Months Ended September 30,
	2013		2012			2013		2012
Beginning balance	$	550	$	450		$	550	$	450
Fair value change in common stock warrants (1)		—		(110	)		—		(110	)
Ending balance	$	550	$	340		$	550	$	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 maximum, become due and payable to the former owners 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 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% as of September 30, 2013. The Company’s fair value estimate of the Southwind earn-out liability was $5.6 million as of the date of acquisition. 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 contingent obligation payable in the Company’s common stock, which reduced the related earn-out liability by $5.4 million. As of September 30, 2013, $14.3 million had been earned and paid in cash and shares to the former owners of the Southwind business. As of September 30, 2013, based on current facts and circumstances, the estimated aggregate fair value of the remaining contingent obligation was $10.2 million, which will be paid at various intervals, if earned, over evaluation periods which extend through December 31, 2014.

The Company entered into an earn-out agreement in connection with its acquisition of PivotHealth, LLC (“PivotHealth”) on August 1, 2011. The additional 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 evaluation periods beginning at the acquisition date and extending through December 31, 2014. 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, 2013 was $0. The fair value of the PivotHealth earn-out liability is impacted by changes in estimates regarding expected operating results as of September 30, 2013.

The Company’s fair value estimate of the 360Fresh earn-out liability, which is payable in cash, was $2.5 million as of the date of acquisition. The estimated aggregate fair value of the contingent obligation for 360Fresh as of September 30, 2013 was $2.9 million. The fair value of the 360Fresh earn-out liability is impacted by changes in estimates regarding expected operating results and a discount rate, which was 20.0% as of September 30, 2013. See Note 3, “Acquisitions,” for additional information regarding the 360Fresh 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, 2013 and 2012 (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2013			2012			2013			2012
Beginning balance	$	14,500		$	22,900		$	15,200		$	20,200
Fair value change in Southwind contingent earn-out liability (1)		—			(100	)		400			3,700
Fair value change in Cielo MedSolutions, LLC contingent earn-out liability (1)		—			—			—			100
Fair value change in PivotHealth contingent earn-out liability (1)		(1,000	)		100			(1,000	)		(300	)
Fair value change in 360Fresh contingent earn-out liability (1)		100			—			400			—
Southwind earn-out payment		(400	)		(400	)		(1,800	)		(1,200	)
Ending balance	$	13,200		$	22,500		$	13,200		$	22,500

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

9

Non-recurring fair value measurements

During the three and six months ended September 30, 2013, the Company recognized a gain of $4.0 million on the conversion of the notes receivable from Evolent into Series B convertible preferred stock of Evolent LLC. See Note 8, “Investments in and advances to unconsolidated entities,” for additional information. The amount of the gain was based on the excess of the fair value of the Series B convertible preferred stock received over the carrying value the notes receivable exchanged. The fair value of the Series B convertible preferred stock used to calculate the gain was determined by reference to the per share price of issuances of the Series B convertible preferred stock by Evolent LLC to a third party at the same time the Company exchanged its note receivable. This transaction was not made in an active market; as such this measure is considered a Level 2 fair value measurement.

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, so that 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, 2013 and 2012, no fair value adjustments or material fair value measurements were required for non-financial assets or liabilities.

Note 5. 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, 2013
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	16,296	$	17,344	$	—	$	1,048
Tax exempt obligations of states		110,514		112,840		1,159		3,485
	$	126,810	$	130,184	$	1,159	$	4,533

	As of March 31, 2013
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	25,430	$	25,347	$	83	$	—
Tax exempt obligations of states		131,409		129,550		2,715		856
	$	156,839	$	154,897	$	2,798	$	856

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

	As of September 30, 2013
	Fair market value		Amortized cost
Matures in less than 1 year	$	4,501	$	4,500
Matures after 1 year through 5 years		33,017		32,328
Matures after 5 years through 10 years		59,947		61,967
Matures after 10 years through 20 years		29,345		31,389
	$	126,810	$	130,184

The following table shows the gross unrealized losses and fair value of the Company’s investments as of September 30, 2013 with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	Less than 12 months				12 months or more				Total
	Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
U.S. government-sponsored enterprises	$	16,296	$	1,048	$	—	$	—	$	16,296	$	1,048
Tax exempt obligations of states		50,008		2,240		21,573		1,245		71,581		3,485
	$	66,304	$	3,288	$	21,573	$	1,245	$	87,877	$	4,533

There were $0.3 million in gross realized gains on sales of available-for-sale investments and $0.3 million in gross realized losses on sales of available-for-sale investments during both the three and six months ended September 30, 2013. There were no gross realized gains or losses on sales of available-for-sale investments during the three or six months ended September 30, 2012. The weighted average maturity on all marketable securities held by the Company as of September 30, 2013 was approximately 7.4 years. Pre-tax net unrealized losses on the Company’s investments of $3.4 million as indicated above were caused by the increase in market interest rates compared to the average interest rate of the Company’s marketable securities portfolio. Of this amount, a gain of $0.1 million is related to investments that mature before September 30, 2014. 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. There are eighteen tax exempt obligations of states and seven tax exempt obligations of U.S. government-sponsored enterprises with unrealized losses that have existed for less than one year. The Company does not consider these investments to be other-than-temporarily impaired as of September 30, 2013. 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 6. 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 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 six years based on the cash flow estimate used to determine the value of the asset. The amount of acquired developed software amortization included in depreciation and amortization for the three and six months ended September 30, 2013 was approximately $0.4 million and $0.6 million, respectively. The amount of acquired developed software amortization included in depreciation and amortization for the three and six months ended September 30, 2012 was approximately $0.2 million and $0.5 million, respectively.

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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, 2013 was $2.7 million and $5.1 million, respectively. The amount of depreciation expense recognized on plant, property and equipment during the three and six months ended September 30, 2012 was $3.2 million and $6.1 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, 2013 and March 31, 2013, the carrying value of internally developed capitalized software was $36.0 million and $28.3 million, respectively. Amortization expense for internally developed capitalized software for the three and six months ended September 30, 2013, recorded in depreciation and amortization on the accompanying consolidated statements of income, was approximately $2.0 million and $3.8 million, respectively. Amortization expense for internally developed capitalized software for the three and six months ended September 30, 2012, recorded in depreciation and amortization on the accompanying consolidated statements of income, was approximately $1.0 million and $1.9 million, respectively. Property and equipment consists of the following (in thousands):

	As of
	September 30, 2013			March 31, 2013
Leasehold improvements	$	35,614		$	29,953
Furniture, fixtures, and equipment		40,278			36,502
Software		78,438			62,589
Property and equipment, gross		154,330			129,044
Accumulated depreciation and amortization		(67,402	)		(57,870	)
Property and equipment, net	$	86,928		$	71,174

The Company evaluates its long-lived assets for impairment when changes in circumstances exist that suggests 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, 2013 or 2012.

Note 7. 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, 2013 or 2012. There was no impairment of goodwill recorded in the six months ended September 30, 2013 or 2012.

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, 2013, the weighted average remaining useful life of acquired intangibles was approximately 5.0 years. As of September 30, 2013, 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, 2013							As of March 31, 2013
	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	$	8,745	$	(1,481	)	$	7,264	$	6,438	$	(1,018	)	$	5,420
Acquired intangibles:
Developed software		5.9		19,250		(6,269	)		12,981		19,250		(4,659	)		14,591
Customer relationships		7.3		13,110		(5,702	)		7,408		12,700		(4,735	)		7,965
Trademarks		6.3		4,200		(2,398	)		1,802		4,200		(2,118	)		2,082
Non-compete agreements		4.3		1,400		(767	)		633		1,400		(633	)		767
Customer contracts		4.9		5,199		(3,896	)		1,303		5,199		(3,643	)		1,556
Total other intangibles			$	51,904	$	(20,513	)	$	31,391	$	49,187	$	(16,806	)	$	32,381

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Amortization expense for intangible assets for the three and six months ended September 30, 2013, recorded in depreciation and amortization on the accompanying consolidated statements of income, was approximately $1.9 million and $3.7 million, respectively. 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. The following approximates the 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, 2014 and for each of the following five fiscal years ending March 31, 2015 through 2018: $3.8 million, $7.4 million, $4.6 million, $4.1 million, and $3.6 million, respectively, and $4.9 million thereafter.

Note 8. Investments in and advances to unconsolidated entities

In August 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% in Series A convertible preferred stock of Evolent and the right to appoint one person to Evolent’s board of directors. The Company exercises significant influence over Evolent, but does not control Evolent and is not the primary beneficiary of Evolent’s activities. At the time of formation, the Series A convertible preferred shares of Evolent were deemed to be in-substance common stock. As a result, the Company’s investment in Evolent was 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 addition, a member of the Company’s Board of Directors serves as the chief executive officer of Evolent.

During the three and six months ended September 30, 2012, the Company’s proportionate share of the losses of Evolent was $1.7 million and $3.8 million, respectively. During the three and six months ended September 30, 2013, the Company’s proportionate share of the losses of Evolent that was applied to the carrying value of its investment in Evolent was $0 million and $1.9 million, respectively. The losses not applied to the carrying value of the investment were applied to reduce the carrying value of notes receivable from Evolent. Equity in gain (loss) of unconsolidated entities on the accompanying consolidated statements of income for the three and six months ended September 30, 2012 includes a dilution gain of $1.1 million which the Company recognized in connection with Evolent’s July 2012 financing round. Evolent LLC is in the early stages of its business plan and, as a result, the Company expects both Holdings and Evolent LLC to continue to incur losses and require additional funding in the future.

During the period from January 2013 through July 2013, the Company provided interim funding to Evolent in the form of a convertible term note bearing interest at a rate of 8% per year, with such interest accruing on a daily basis and compounded annually. The carrying balance of the note receivable was $4.4 million as of March 31, 2013. The Company provided additional funding of $5.6 million during the period from April 2013 to July 2013. The Company’s proportionate share of the losses recognized by Evolent during the six month period from April 1, 2013 through September 22, 2013 exceeded the Company’s investment balance. As a result, the Company’s proportionate share of the excess losses were applied to the Company’s note receivable from Evolent at a rate consistent with the Company’s interest in Evolent’s outstanding debt, which was 44%. The carrying balance of the notes receivable was decreased by $2.7 million and $4.0 million during the three and six months ended September 30, 2013, respectively, to reflect the Company’s portion of Evolent’s losses after the Company’s equity investment balance was reduced to zero.

In September 2013, Evolent completed a reorganization in connection with a new round of equity financing (the “Series B Issuance”). Evolent’s reorganization included the creation of Evolent Health Holdings, Inc. (“Holdings”) and the conversion of Evolent into Evolent Health LLC (“Evolent LLC”), a limited liability company that is treated as a partnership for tax purposes. As a result of the reorganization, Holdings owns 57% of the equity interests in Evolent LLC. Holdings has no other operations other than its investment in Evolent LLC. The Company, together with certain other investors, also holds direct equity interests in Evolent LLC, which will continue as the operating company that will conduct the Evolent business. The Company participated in the Series B Issuance by providing $9.6 million in cash and converting $10.1 million in principal and accrued interest of the convertible term note described above in exchange for 1,302,172 Series B convertible preferred shares in Evolent LLC and the right to appoint an additional person to the boards of directors of both Evolent LLC and Holdings. The conversion of all outstanding principal and accrued interest under the note into equity securities generated a $4.0 million gain. The gain is included in equity in gain (loss) on unconsolidated entities on the accompanying consolidated statements of income for the three and six months ended September 30, 2013. Immediately following the Series B Issuance and reorganization, the Company owned 23.6% of Holdings through its Series A convertible preferred investment and 11.5% of Evolent LLC through its Series B convertible preferred investment.

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On the date of the Series B Issuance, the Company re-evaluated the accounting for its investment in Holdings’ Series A convertible preferred stock. The Company determined that its Series A convertible preferred investment in Holdings should be accounted for under the cost method instead of the equity method since the investment no longer qualified as in-substance common stock. Evolent LLC maintains separate capital accounts for each of its shareholders; therefore, the Company accounts for its Series B convertible preferred investment in Evolent LLC under the equity method. The carrying balance of the Company’s Series A convertible preferred investment in Holdings was $0 as of September 30, 2013. Following the gain recognized on the exchange of the converted notes for the Series B convertible preferred shares of Evolent LLC, the carrying balance of the Company’s investment in Series B convertible preferred shares of Evolent LLC was $20.0 million as of September 30, 2013.

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

	As of
	September 22, 2013			March 31, 2013
Assets:
Current assets	$	15,552		$	9,842
Non-current assets		23,496			10,571
Total assets	$	39,048		$	20,413
Liabilities and Members’ Equity:
Current liabilities	$	29,418		$	11,716
Non-current liabilities		26,638			10,116
Total liabilities	$	56,056		$	21,832
Members’ equity		(17,008	)		(1,419	)
Total liabilities and members’ equity	$	39,048		$	20,413

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

	Three Months Ended						Six Months Ended
	September 22, 2013			September 30, 2012			September 22, 2013			September 30, 2012
Revenue	$	12,688		$	2,193		$	20,214		$	2,262
Operating expenses		(18,001	)		(7,440	)		(34,030	)		(12,655	)
Depreciation and amortization		(456	)		(178	)		(852	)		(482	)
Interest, net		(401	)		3			(660	)		7
Taxes		(6	)		—			(6	)		—
Net loss	$	(6,176	)	$	(5,422	)	$	(15,334	)	$	(10,868	)

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

	As of September 30, 2013
Assets:
Current assets	$	88,927
Non-current assets		19,686
Total assets	$	108,613
Liabilities and Members’ Equity:
Current liabilities	$	25,721
Non-current liabilities		3,638
Total liabilities	$	29,359
Redeemable shares		43,738
Members’ equity		35,506
Total liabilities and members’ equity	$	108,613

14

The operating results of Evolent LLC for the period from September 23, 2013 through September 30, 2013 were not material.

Note 9. 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. The warrants are recorded at their fair value, which was $550,000 as of September 30, 2013 and March 31, 2013, 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 4, “Fair value measurements.” The convertible preferred stock investment is recorded at cost, and the carrying amount of this investment of $5.0 million as of September 30, 2013 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, 2013, 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, 2013 or 2012.

Note 10. Noncontrolling interest

In July 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 that 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, 2013, 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 specified 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 in the period when it is determined that exercise of the Put Option is probable.

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. The noncontrolling interest represents the entity’s owners’ claims on consolidated investments where the Company owns less than a 100% interest. As of September 30, 2013, 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 11. Revolving credit facility

In July 2012, the Company entered into a $150.0 million five-year senior secured revolving credit facility under a credit agreement with a syndicate of lenders. Under the revolving 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 specified 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 revolving credit facility at the end of a period may not be reflective of the total amounts outstanding during such period.

Amounts borrowed under the revolving 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.

15

As of September 30, 2013, there were no amounts outstanding under the revolving credit facility and $150.0 million was available for borrowing.

The Company is required under the revolving credit facility to satisfy three financial ratios on a quarterly basis. The Company was in compliance with these financial covenants as of September 30, 2013.

Note 12. Stockholders’ equity

On May 8, 2013, the Company’s Board of Directors authorized the Company to repurchase an additional $100 million of the Company’s common stock under its share repurchase program, bringing the total authorized repurchase amount under the program to $450 million since its inception. The Company repurchased 87,041 shares and 205,921 shares of its common stock at a total cost of approximately $5.0 million and $11.2 million in the three and six months ended September 30, 2013, respectively, pursuant to its share repurchase program. The Company repurchased 114,390 shares and 177,227 shares of its common stock at a total cost of approximately $5.0 million and $8.0 million in the three and six months ended September 30, 2012, respectively, pursuant to its share repurchase program. The total amount of common stock purchased from inception under the program as of September 30, 2013 was 15,856,015 shares at a total cost of $352.1 million. All repurchases to date have been made in the open market and all repurchased shares have been retired as of September 30, 2013. 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, 2013, the remaining authorized repurchase amount was $97.9 million.

During the six months ended September 30, 2013, the Company retired 205,921 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 $2,000, treasury stock of $11.2 million, and retained earnings of $11.1 million. A total of 15,856,015 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.

Note 13. Stock-based compensation

On September 5, 2013, the Company’s stockholders approved an amendment to the Company’s 2009 Stock Incentive Plan (the “2009 Plan”) that increased the number of shares of common stock authorized for issuance under the plan by 2,125,000 shares. The aggregate number of shares of the Company’s common stock available for issuance under the 2009 Plan, as amended, may not exceed 6,735,000, plus the shares that remained available for issuance under the Company’s 2006 Stock Incentive Plan (the “2006 Plan”) as of June 26, 2009 and shares subject to outstanding awards under the 2006 Plan that, on or after such date, cease for any reason to be subject to such awards (other than reason of exercise or settlement of the awards to the extent they are exercised for or settled in vested and non-forfeitable shares). On September 5, 2013, the Company’s stockholders also approved an amendment to the 2009 Plan that increased the maximum term for stock option and freestanding stock appreciation rights awards granted under the plan from five years to seven years. Stock-based awards granted under the 2006 Plan have a five year maximum contractual term and stock-based awards granted under the 2009 Plan have a seven year maximum contractual term. The aggregate number of shares of the Company’s common stock available for issuance under the Company’s 2005 Stock Incentive Plan (the “2005 Plan”) may not exceed 3,200,000, plus the shares that remained available for issuance under the Company’s 2001 Stock Incentive Plan (the “2001 Plan”) as of November 15, 2005 and shares subject to outstanding awards under the 2001 Plan that, on or after such date, cease for any reason to be subject to such awards (other than reason of exercise or settlement of the awards to the extent they are exercised for or settled in vested and non-forfeitable shares). Stock-based awards granted under the 2005 Plan have a seven year maximum contractual term. As of September 30, 2013, there were 2,745,448 shares available for issuance under the 2009 Plan and 716,625 shares available for issuance under the 2005 Plan.

The following table summarizes the changes in common stock options granted under the Company’s stock incentive plans during the six months ended September 30, 2013 and 2012:

	Six Months Ended September 30,
	2013					2012
	Number of options			Weighted average exercise price		Number of options			Weighted average exercise price
Outstanding, beginning of period		2,692,353		$	21.06		3,812,228		$	17.04
Granted		429,693			48.13		347,760			43.83
Exercised		(830,633	)		16.26		(1,036,456	)		15.64
Forfeited		(41,802	)		27.36		(4,500	)		9.26
Cancellations		—			—		—			—
Outstanding, end of period		2,249,611		$	27.89		3,119,032		$	20.51
Exercisable, end of period		1,159,182		$	18.36

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The weighted average fair value of the options granted during the six months ended September 30, 2013 is estimated at $13.13 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 0.6%, an expected life of approximately four years, volatility of 33.24%, and dividend yield of 0.0% 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, 2013 and 2012:

	Six Months Ended September 30,
	2013					2012
	Number of RSUs			Weighted average grant date fair value		Number of RSUs			Weighted average grant date fair value
Non-vested, beginning of period		943,206		$	29.50		896,640		$	20.77
Granted		394,328			48.76		308,152			43.96
Forfeited		(22,316	)		36.08		(2,904	)		22.75
Vested		(339,710	)		26.50		(273,444	)		19.78
Non-vested, end of period		975,508		$	38.18		928,444		$	28.75

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, 2013 and 2012 (in thousands, except per share amounts):

	Three Months Ended September 30,						Six Months Ended September 30,
	2013			2012			2013			2012
Stock-based compensation expense included in:
Costs and expenses:
Cost of services	$	1,284		$	989		$	2,689		$	1,993
Member relations and marketing		925			658			1,901			1,336
General and administrative		2,198			1,758			4,476			3,582
Depreciation and amortization		—			—			—			—
Total costs and expenses		4,407			3,405			9,066			6,911
Income from operations		(4,407	)		(3,405	)		(9,066	)		(6,911	)
Net income	$	(2,710	)	$	(2,101	)	$	(5,576	)	$	(4,264	)
Impact on diluted earnings per share	$	0.08		$	0.06		$	0.15		$	0.12

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

As of September 30, 2013, $40.8 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 2.8 years.

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Note 14. 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, 2013 or 2012. 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 15. 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 includes contingently issuable shares related to the component of the Southwind earn-out settled in stock. For additional information regarding these shares, see Note 4, “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,
	2013		2012		2013		2012
Basic weighted average common shares outstanding		35,883		34,660		35,686		34,421
Effect of dilutive outstanding stock-based awards		1,014		1,481		1,072		1,621
Dilutive impact of earn-out liability		—		112		—		112
Diluted weighted average common shares outstanding		36,897		36,253		36,758		36,154

In the three months ended September 30, 2013 and 2012, 1.0 million and 0.4 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, 2013 and 2012, 1.1 million and 0.4 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 16. Subsequent events

On October 8, 2013, the Company completed the acquisition for cash of Care Team Connect, Inc., a leading provider of comprehensive care management workflow solutions and analytics. The acquisition enhances the Company’s existing suite of population health technologies and service offerings and affirms the Company’s position as a leader in the care management market. The total purchase price consists of $35.3 million, a portion of which is reserved in escrow to secure indemnification and other obligations. The Company is in the process of finalizing the purchase price allocation and valuation of certain intangible assets.

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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 2014 is our fiscal year ending on March 31, 2014.

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, 2013, or the “2013 Form 10-K,” filed with the Securities and Exchange Commission, or “SEC.” 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 through discrete programs to approximately 4,100 organizations, including hospitals, health systems, pharmaceutical and biotech companies, health care insurers, medical device companies, colleges, universities, and other health care focused and educational institutions. Members of each program typically are charged a fixed annual 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 four key areas of focus for fiscal 2014 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 and education market conditions, through developing and launching new programs and acquiring products, services, and technologies that improve performance for our members; to further align our internal sales and account management functions to allow us to serve members more effectively and to develop deeper and more powerful commercial relationships across our portfolio; and to attract, cultivate, 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 a heavy focus on setting each team up 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 17.1% in the six months ended September 30, 2013 over the prior year period. Our contract value increased 12.9% to $491.3 million as of September 30, 2013 from $435.1 million as of September 30, 2012. 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 software tools and web-based content. 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; legal; management information systems; facilities management; new program development; corporate 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 that we have completed since April 1, 2012 affect the comparability of our results of operations for the three and six months ended September 30, 2013 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 2013 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 fiscal year ended March 31, 2013.

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,
	2013			2012			2013			2012
Revenue		100.0	%		100.0	%		100.0	%		100.0	%
Costs and expenses:
Cost of services, excluding depreciation and amortization		54.4	%		51.5	%		54.0	%		53.7	%
Member relations and marketing		17.3	%		19.4	%		17.6	%		18.9	%
General and administrative		14.0	%		14.1	%		14.3	%		13.5	%
Depreciation and amortization		5.4	%		4.0	%		5.3	%		4.0	%
Total costs and expenses		91.1	%		89.0	%		91.2	%		90.1	%
Operating income		8.9	%		11.0	%		8.8	%		9.9	%
Other income, net		0.8	%		0.6	%		0.6	%		0.6	%
Income before provision for income taxes and equity in gain (loss) of unconsolidated entities		9.7	%		11.6	%		9.4	%		10.5	%
Provision for income taxes		(3.7	%)		(4.4	%)		(3.6	%)		(4.0	%)
Equity in gain (loss) of unconsolidated entities		1.0	%		(0.5	%)		(0.7	%)		(1.3	%)
Net income before allocation to noncontrolling interest		7.0	%		6.7	%		5.1	%		5.2	%
Net loss attributable to noncontrolling interest		—			0.1	%		—			0.1	%
Net income attributable to common stockholders		7.0	%		6.8	%		5.1	%		5.3	%

Three and six months ended September 30, 2013 compared to the three and six months ended September 30, 2012

Net income attributable to common stockholders. Net income attributable to common stockholders was $9.0 million in the three months ended September 30, 2013 compared to $7.5 million in the three months ended September 30, 2012. The increase in net income was primarily attributable to a $1.9 million increase in our proportionate share of the net gain/(loss) of Evolent, a 15.9% increase in revenue, and a $1.0 million increase in fair value gains related to acquisition-related earn-out liabilities as compared to the prior year period. The effect of these factors was partially offset by an increase in cost of services of $12.9 million incurred for new and growing programs, increases of $2.4 million in general and administrative expense related to increased investment in our legal and corporate development groups, increases of $0.7 million in marketing and member relations costs attributable to the addition of new sales teams, and an increase of $2.5 million in depreciation and amortization. Net income attributable to common stockholders was $12.7 million in the six months ended September 30, 2013 compared to $11.3 million in the six months ended September 30, 2012. The increase in net income was primarily attributable to a 17.1% increase in revenue and a $3.7 million decrease in fair value charges related to acquisition-related earn-out liabilities as compared to the prior year period. The effect of these factors was partially offset by

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an increase in cost of services of $20.5 million incurred for new and growing programs, increases of $6.9 million in general and administrative expense related to increased investment in our legal and corporate development groups, increases of $3.8 million in marketing and member relations costs attributable to the addition of new sales teams, and an increase of $4.7 million in depreciation and amortization.

Adjusted net income, non-GAAP earnings per diluted share, and adjusted EBITDA. Adjusted net income was $11.4 million for the three months ended September 30, 2013 and 2012, while adjusted EBITDA increased 7.4% to $22.3 million in the three months ended September 30, 2013 from $20.8 million in the three months ended September 30, 2012. Adjusted net income increased to $22.7 million in the six months ended September 30, 2013 from $22.5 million in the six months ended September 30, 2012, while adjusted EBITDA increased 9.3% to $44.8 million in the six months ended September 30, 2013 from $40.9 million in the six months ended September 30, 2012. 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 15.9% to $128.3 million in the three months ended September 30, 2013 from $110.8 million in the three months ended September 30, 2012. Total revenue increased 17.1% to $251.6 million in the six months ended September 30, 2013 from $214.9 million in the six months ended September 30, 2012, while contract value increased 12.9% to $491.3 million as of September 30, 2013 from $435.1 million as of September 30, 2012. The increases in revenue and contract value were primarily attributable to the introduction and expansion of new programs, including our fiscal 2013 acquisitions of ActiveStrategy, Inc. (“ActiveStrategy”) and 360Fresh, Inc. (“360Fresh”), our cross-selling of existing programs to existing members, and, to a lesser degree, price increases. We offered 59 membership programs as of September 30, 2013 compared to 54 membership programs as of September 30, 2012.

Cost of services. Cost of services increased to $69.9 million in the three months ended September 30, 2013 from $57.0 million in the three months ended September 30, 2012. Cost of services increased to $135.8 million in the six months ended September 30, 2013 from $115.4 million in the six months ended September 30, 2012. The increase of $12.9 million in cost of services for the three months ended September 30, 2013 was primarily due to growth and expansion of our Crimson programs, as well as our recent acquisitions of ActiveStrategy, 360Fresh, and Medical Referral Source, Inc. (“MRS”). Cost of services in the current periods also reflected increased 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 54.4% and 51.5% for the three months ended September 30, 2013 and 2012, respectively, and 54.0% and 53.7% for the six months ended September 30, 2013 and 2012, respectively. Cost of services includes fair value adjustments to our acquisition-related earn-out liabilities of a $1.0 million decrease in the three months ended September 30, 2013, and a $0.3 million decrease and $3.5 million increase in the six months ended September 30, 2013 and 2012, respectively.

Member relations and marketing. Member relations and marketing expense increased to $22.2 million in the three months ended September 30, 2013 from $21.5 million in the three months ended September 30, 2012. As a percentage of revenue, member relations and marketing expense in the three months ended September 30, 2013 and 2012 was 17.3% and 19.4%, respectively. Member relations and marketing expense increased to $44.4 million in the six months ended September 30, 2013 from $40.6 million in the six months ended September 30, 2012. As a percentage of revenue, member relations and marketing expense in the six months ended September 30, 2013 and 2012 was 17.6% and 18.9%, respectively. The increase in member relations and marketing expense was 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, 2013 and 2012, we had an average of 185 and 167 new business development teams, respectively.

General and administrative. General and administrative expense increased to $18.0 million in the three months ended September 30, 2013 from $15.6 million in the three months ended September 30, 2012. As a percentage of revenue, general and administrative expense was 14.0% in the three months ended September 30, 2013 compared to 14.1% in the three months ended September 30, 2012. General and administrative expense increased to $36.0 million in the six months ended September 30, 2013 from $29.1 million in the six months ended September 30, 2012. As a percentage of revenue, general and administrative expense increased to 14.3% in the six months ended September 30, 2013 from 13.5% in the six months ended September 30, 2012. The increases in general and administrative expense for the three and six months ended September 30, 2013 was primarily attributable to increased information technology and infrastructure costs to support our growing employee base and number of office locations, and increased investments in our legal and corporate development groups.

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Depreciation and amortization. Depreciation expense increased to $6.9 million, or 5.4% of revenue, in the three months ended September 30, 2013, from $4.4 million, or 4.0% of revenue, in the three months ended September 30, 2012. Depreciation expense increased to $13.2 million, or 5.3% of revenue, in the six months ended September 30, 2013, from $8.5 million, or 4.0% of revenue, in the six months ended September 30, 2012. The increase in depreciation and amortization was primarily due to increased amortization expense from developed capitalized internal-use software tools, the ActiveStrategy, 360Fresh, and MRS acquisitions, and depreciation on our newly renovated Austin, San Francisco, and Nashville offices and on an expansion floor of our Washington, D.C. headquarters.

Other income, net. Other income, net was $1.1 million in the three months ended September 30, 2013, compared to $0.7 million in the three months ended September 30, 2012. Higher average cash and investment balances and interest earned on our loan to Evolent contributed to an increase in interest income to $1.1 million in the three months ended September 30, 2013 from $0.9 million in the three months ended September 30, 2012. We recognized foreign exchange gains of $0.1 million and foreign exchange losses of $32,000 during the three months ended September 30, 2013 and 2012, 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. During the three months ended September 30, 2013 and 2012, we recognized $0.2 million and $0.1 million, respectively, in fees under our revolving credit facility. Other income, net increased to $1.6 million in the six months ended September 30, 2013 from $1.3 million in the six months ended September 30, 2012. Higher average cash and investment balances and interest earned on our loan to Evolent contributed to an increase in interest income to $2.0 million in the six months ended September 30, 2013 from $1.7 million in the six months ended September 30, 2012. We recognized foreign exchange losses of $0.1 million and $0.2 million during the six months ended September 30, 2013 and 2012, 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. During the six months ended September 30, 2013 and 2012, we recognized $0.3 million and $0.1 million, respectively, in fees under our revolving credit facility.

Provision for income taxes. Our provision for income taxes was $4.8 million and $4.9 million in the three months ended September 30, 2013 and 2012, respectively, and $9.1 million and $8.6 million in the six months ended September 30, 2013 and 2012, respectively. Our effective tax rate in the three and six months ended September 30, 2013 was 38.5% compared to 38.3% in the three and six months ended September 30, 2012.

Equity in gain (loss) of unconsolidated entities. Our proportionate share of the losses of Evolent during the three and six months ended September 30, 2013 was $2.7 million and $5.9 million, respectively, partially offset by a gain of $4.0 recognized on the conversion into equity securities of all outstanding principal and accrued interest under our note receivable from Evolent. Our proportionate share of the losses of Evolent during the three and six months ended September 30, 2012 was $1.7 million and $3.8 million, respectively, 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. Evolent was established in August 2011 and continues to operate as an early-stage business. As a result, we expect Evolent to incur losses and require additional funding in the future.

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 issued under our stock incentive plans for the three and six months ended September 30, 2013 and 2012 (in thousands, except per share amounts):

	Three Months Ended September 30,						Six Months Ended September 30,
	2013			2012			2013			2012
Stock-based compensation expense included in:
Costs and expenses:
Cost of services	$	1,284		$	989		$	2,689		$	1,993
Member relations and marketing		925			658			1,901			1,336
General and administrative		2,198			1,758			4,476			3,582
Depreciation and amortization		—			—			—			—
Total costs and expenses		4,407			3,405			9,066			6,911
Operating Income		(4,407	)		(3,405	)		(9,066	)		(6,911	)
Net income attributable to common stockholders	$	(2,710	)	$	(2,101	)	$	(5,576	)	$	(4,264	)
Impact on diluted earnings per share	$	0.08		$	0.06		$	0.15		$	0.12

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

As of September 30, 2013, $40.8 million of total unrecognized compensation cost related to stock-based compensation was expected to be recognized over a weighted average period of 2.8 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” for the three and six months ended September 30, 2013 and 2012 as net income attributable to common stockholders before adjustment for the items set forth in the first table below. We define “adjusted net income” for the three and six months ended September 30, 2013 and 2012 as net income attributable to common stockholders excluding the net of tax effect of the items set forth in the second table below. We define “non-GAAP earnings per diluted share” for the three and six months ended September 30, 2013 and 2012 as earnings per diluted share excluding the net of tax effect of the items set forth in the third table below. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Presentation” in our 2013 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,
	2013			2012			2013			2012
Net income attributable to common stockholders	$	9,002		$	7,481		$	12,695		$	11,322
Equity in (gain) loss of unconsolidated entities		(1,326	)		592			1,907			2,716
Provision for income taxes		4,805			4,944			9,140			8,646
Other income, net		(1,091	)		(688	)		(1,614	)		(1,264	)
Depreciation and amortization		6,886			4,430			13,240			8,516
Acquisition and similar transaction charges		573			599			573			599
Fair value adjustments to acquisition-related earn-out liabilities		(950	)		—			(250	)		3,500
Share-based compensation expense		4,407			3,405			9,066			6,911
Adjusted EBITDA	$	22,306		$	20,763		$	44,757		$	40,946

	Three Months Ended September 30,					Six Months Ended September 30,
	2013			2012		2013			2012
Net income attributable to common stockholders	$	9,002		$	7,481	$	12,695		$	11,322
Equity in (gain) loss of unconsolidated entities		(1,326	)		592		1,907			2,716
Amortization of acquisition-related intangibles, net of tax		1,231			790		2,367			1,581
Acquisition and similar transaction charges, net of tax		352			370		352			370
Fair value adjustments to acquisition-related earn-out liabilities, net of tax		(584	)		—		(154	)		2,160
Loss on investment in common stock warrants, net of tax		—			68		—			68
Share-based compensation, net of tax		2,710			2,101		5,576			4,264
Adjusted net income	$	11,385		$	11,402	$	22,743		$	22,481

23

	Three Months Ended September 30,					Six Months Ended September 30,
	2013			2012		2013		2012
GAAP earnings per diluted share	$	0.24		$	0.21	$	0.35	$	0.31
Equity in (gain) loss of unconsolidated entities		(0.03	)		0.01		0.05		0.08
Amortization of acquisition-related intangibles, net of tax		0.03			0.02		0.06		0.04
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		(0.02	)		—		—		0.06
Share-based compensation, net of tax		0.08			0.06		0.15		0.12
Non-GAAP earnings per diluted share	$	0.31		$	0.31	$	0.62	$	0.62

Liquidity and Capital Resources

Cash flows generated from operating activities represent our primary source of liquidity. We believe that existing cash, cash equivalents, marketable securities balances, and operating cash flows will be sufficient to support our expected operating and capital expenditures, as well as share repurchases, for at least the next 12 months. We had cash, cash equivalents, and marketable securities balances of $200.2 million as of September 30, 2013 and $214.7 million as of March 31, 2013. We expended $11.2 million and $8.0 million in cash to purchase shares of our common stock through our share repurchase program during the six months ended September 30, 2013 and 2012, respectively. In addition, we invested $11.5 million in our acquisition of MRS, $9.6 million in Series B convertible preferred stock of Evolent LLC, and $6.0 million in loans extended to Evolent during the six months ended September 30, 2013. We had no long-term indebtedness as of September 30, 2013 or March 31, 2013.

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. Net cash flows provided by operating activities were $35.6 million in the six months ended September 30, 2013, compared to $40.9 million in the six months ended September 30, 2012. The decrease in net cash flows provided by operating activities during the current period was primarily due to the timing of large payments from members at the end of the three months ended September 30, 2012.

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 $29.7 million and $36.0 million in the six months ended September 30, 2013 and 2012, respectively. Investing activities during the six months ended September 30, 2013 consisted of capital expenditures of $25.9 million, $11.5 million used in our acquisition of MRS, net redemptions of marketable securities of $23.4 million, and the purchase of $15.6 million in notes receivable and Series B convertible preferred stock from Evolent Health LLC. Investing activities during the six months ended September 30, 2012 consisted of the net purchases of marketable securities of $19.7 million and capital expenditures of $16.3 million.

Cash flows from financing activities. We had net cash flows provided by financing activities of $9.6 million and $14.3 million in the six months ended September 30, 2013 and 2012, respectively. Cash flows from financing activities during the six months ended September 30, 2013 primarily consisted of $13.5 million of proceeds from the issuance of common stock upon the exercise of stock options and $12.8 million in additional tax benefits related to share-based compensation arrangements, offset in part by the repurchase of $11.2 million of shares under our repurchase program and $5.8 million in shares withheld to satisfy the minimum employee tax withholding for certain vested restricted stock units. Financing activities during the six months ended September 30, 2012 primarily consisted of $16.2 million of proceeds 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 $8.0 million in shares under our repurchase program and $3.8 million in shares withheld to satisfy the minimum employee tax withholding for certain vested restricted stock units. We repurchased 205,921 shares at a total cost of approximately $11.2 million and 177,227 shares at a total cost of approximately $8.0 million in the six months ended September 30, 2013 and 2012, respectively, pursuant to our share repurchase program.

Revolving credit facility. In July 2012, we obtained a $150.0 million five-year senior secured revolving credit facility under a credit agreement with a syndicate of lenders that can be used to finance working capital needs and for general corporate purposes, including permitted acquisitions. The credit facility may be increased at our request by up to an additional $50.0 million in minimum increments of $10.0 million upon the satisfaction of specified conditions. The credit agreement contains a sublimit for up to

24

$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. As of September 30, 2013, there were no amounts outstanding under the credit facility and $150.0 million was available for borrowing thereunder.

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. Borrowings on the credit facility, if any, will bear interest at an amount based on 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. The facility contains customary affirmative and negative covenants. We are also required to maintain a maximum total leverage ratio of less than 3.5 to 1, a maximum senior secured leverage ratio of less than 2.5 to 1, and a minimum interest coverage ratio of greater than 3 to 1 for each of our fiscal quarters for the period of four consecutive fiscal quarters ending with the end of each such fiscal quarter. We were in compliance with each of these financial covenants as of September 30, 2013.

Contractual Obligations

Our 2013 Form 10-K discloses certain commitments and contractual obligations that existed as of March 31, 2013. 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, 2013, based on current facts and circumstances, the estimated aggregate fair value of the remaining contingent obligation was $10.2 million, which will be paid at various intervals, if earned, over evaluation periods which extend through December 31, 2014. As of September 30, 2013, $14.3 million has been earned and paid to the former owners.

Our August 2011 acquisition of PivotHealth, LLC (“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, 2013, the estimated aggregate fair value of the contingent obligation for PivotHealth was $0.

Our November 2012 acquisition of 360Fresh included a contingent obligation to make additional cash payments if certain revenue targets are achieved over evaluation periods beginning at the acquisition date and extending through August 15, 2014. As of September 30, 2013, the estimated aggregate fair value of the contingent obligation for 360Fresh was $2.9 million.

Off-Balance Sheet Arrangements

As of September 30, 2013, 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, 2013, our marketable securities consisted of $110.5 million in tax-exempt notes and bonds issued by various states and $16.3 million in U.S. government-sponsored enterprise securities. The weighted average maturity on all our marketable securities as of September 30, 2013 was approximately 7.4 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 4% 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 transaction loss recognized by us. We recorded foreign currency exchange gains of $0.1 million during the three months ended September 30, 2013 and losses of $0.1 million during the six months ended September 30, 2013, which are included in other income, net in our consolidated statements of income. In the three and six months ended September 30, 2012, we recorded foreign currency exchange gains of $32,000 and losses 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, 2013.

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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.

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, 2013. The risks described in our 2013 Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results.

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, to $350 million in April 2008, and to $450 million in May 2013. 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 2014 is as 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, 2013		—	$	—		—	$	102,933,721
August 1 to August 31, 2013		54,700	$	57.62		54,700	$	99,781,642
September 1 to September 30, 2013		32,341	$	57.14		32,341	$	97,933,751
Total		87,041	$	57.44		87,041

As of September 30, 2013, we had repurchased a total of 15,856,015 shares under our repurchase program since the program’s inception.

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Item 6. Exhibits.

(a) Exhibits:

10.1	The Advisory Board Company Amended and Restated 2009 Stock Incentive Plan. Incorporated by reference to Appendix A to the Definitive Proxy Statement of the Advisory Board Company filed on Schedule 14A with the Securities and Exchange Commission on July 26, 2013.
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, 2013, formatted in XBRL: (i) Consolidated Balance Sheets as of September 30, 2013 (unaudited) and March 31, 2013, (ii) Unaudited Consolidated Statements of Income for the Three and Six Months Ended September 30, 2013 and 2012, (iii) Unaudited Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2013 and 2012, (iv) Unaudited Consolidated Statements of Cash Flows for the Six months Ended September 30, 2013 and 2012, and (v) Notes to Unaudited Consolidated Financial Statements.

27

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 12, 2013	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
10.1	The Advisory Board Company Amended and Restated 2009 Stock Incentive Plan. Incorporated by reference to Appendix A to the Definitive Proxy Statement of the Advisory Board Company filed on Schedule 14A with the Securities and Exchange Commission on July 26, 2013.
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, 2013, formatted in XBRL: (i) Consolidated Balance Sheets as of September 30, 2013 (unaudited) and March 31, 2013, (ii) Unaudited Consolidated Statements of Income for the Three and Six Months Ended September 30, 2013 and 2012, (iii) Unaudited Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2013 and 2012, (iv) Unaudited Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2013 and 2012, and (v) Notes to Unaudited Consolidated Financial Statements.

29

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 first 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 12, 2013	/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 first 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 12, 2013	/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, 2013 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 12, 2013

/s/ Michael T. Kirshbaum

Michael T. Kirshbaum

Chief Financial Officer and Treasurer

November 12, 2013

XML

Noncontrolling Interest

6 Months Ended

Sep. 30, 2013

Noncontrolling Interest [Abstract]

Noncontrolling Interest

Note 10. Noncontrolling interest

In July 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 that 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, 2013, 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 specified 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 in the period when it is determined that exercise of the Put Option is probable.

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. The noncontrolling interest represents the entity’s owners’ claims on consolidated investments where the Company owns less than a 100% interest. As of September 30, 2013, 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.

XML

Stockholders' Equity - Additional Information (Detail) (USD $)	0 Months Ended	3 Months Ended		6 Months Ended		117 Months Ended
	May 08, 2013	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Equity [Abstract]
Increased share repurchase program	$ 100,000,000
Total amount authorized under repurchase program	450,000,000
Number of shares repurchased under stock repurchase program		87,041	114,390	205,921	177,227	15,856,015
Purchases of treasury stock		5,000,000	5,000,000	11,200,000	8,000,000	352,100,000
Remaining authorized repurchase amount				97,900,000
Number of shares retired by the Company				205,921		15,856,015
Treasury stock retirement reductions in common stock, par value				2,000
Treasury stock retirement resulted in reductions to treasury stock				11,200,000
Treasury stock retirement resulted in reductions to retained earnings				$ 11,100,000

XML

Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Statement [Abstract]
Revenue	$ 128,341	$ 110,758	$ 251,557	$ 214,900
Costs and expenses:
Cost of services, excluding depreciation and amortization	69,857	56,989	135,807	115,355
Member relations and marketing	22,198	21,486	44,386	40,606
General and administrative	18,010	15,632	35,996	29,111
Depreciation and amortization	6,886	4,430	13,240	8,516
Operating income	11,390	12,221	22,128	21,312
Other income, net	1,091	688	1,614	1,264
Income before provision for income taxes and equity in gain (loss) of unconsolidated entities	12,481	12,909	23,742	22,576
Provision for income taxes	(4,805)	(4,944)	(9,140)	(8,646)
Equity in gain (loss) of unconsolidated entities	1,326	(592)	(1,907)	(2,716)
Net income before allocation to noncontrolling interest	9,002	7,373	12,695	11,214
Net loss attributable to noncontrolling interest		108		108
Net income attributable to common stockholders	$ 9,002	$ 7,481	$ 12,695	$ 11,322
Earnings per share
Net income attributable to common stockholders per share-basic	$ 0.25	$ 0.22	$ 0.36	$ 0.33
Net income attributable to common stockholders per share-diluted	$ 0.24	$ 0.21	$ 0.35	$ 0.31
Weighted average number of shares outstanding:
Basic	35,883	34,660	35,686	34,421
Diluted	36,897	36,253	36,758	36,154

XML

Acquisitions

6 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

Acquisitions

Note 3. Acquisitions

Medical Referral Source, Inc.

On July 8, 2013, the Company completed the acquisition for cash of all of the issued and outstanding capital stock of Medical Referral Source, Inc. (“MRS”) to supplement its existing physician referral programs and to provide new growth opportunities. The total purchase price, net of cash acquired, was $11.5 million, of which $2.3 million is reserved in escrow to secure indemnification and other obligations and will be released in total by July 28, 2015 if specified indemnity conditions are satisfied. This indemnity escrow is not carried on the accompanying consolidated balance sheets.

The total purchase price was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values as of July 8, 2013. 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, $0.7 million was allocated to accounts receivable, $0.2 million to deferred tax assets, and $0.4 million to assumed liabilities, which consists of $0.3 million of acquired deferred revenue and $0.1 million of accounts payable. Of the total estimated purchase price, $2.1 million was allocated to intangible assets, which consist of the value assigned to acquired technology related intangibles of $1.7 million and customer relationship related intangibles of $0.4 million. The acquired intangible assets have estimated lives ranging from three years to eight years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 4.0 years. Approximately $8.9 million was allocated to goodwill, which represents synergistic benefits expected to be generated from scaling MRS’s offerings across the Company’s large membership base. Goodwill is not deductible for tax purposes.

The financial results of MRS 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.

360Fresh, Inc.

On November 15, 2012, the Company acquired for cash all of the issued and outstanding capital stock of 360Fresh, Inc. (“360Fresh”), a provider of clinical data analytics. The transaction enhances the Company’s existing suite of physician performance management solutions through the addition of unique technology that transforms the data from medical records into actionable insights to improve patient quality, reduce costs, and enhance productivity for health systems. The total purchase price, net of cash acquired, of $19.5 million consisted of an initial payment of $13.6 million of cash, the fair value of estimated additional contingent cash payments of $2.5 million, and an additional $3.4 million placed into escrow, which will be released by May 15, 2014 if specified indemnity conditions are satisfied. This indemnity escrow is not carried on the accompanying consolidated balance sheets. The contingent cash payments, which will not exceed $8.0 million and have no guaranteed minimum, will become due and payable to the former stockholders of 360Fresh if certain revenue targets are achieved over evaluation periods beginning at the acquisition date and extending through August 15, 2014. Upward adjustments of $0.1 million and $0.4 million were made to the fair value of the liabilities for such contingent cash payments during the three and six months ended September 30, 2013, respectively. The adjustments were recorded in cost of services on the accompanying consolidated statements of income and increased the liability to $2.9 million as of September 30, 2013. See Note 4, “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 November 15, 2012. 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, $0.3 million was allocated to acquired accounts receivable and $4.1 million was allocated to assumed liabilities, which consist of $4.0 million of deferred tax liabilities and $0.1 million of acquired deferred revenue. Of the total estimated purchase price, $9.9 million was allocated to intangible assets, which consist of the value assigned to acquired technology related intangibles of $9.8 million and employee related intangibles of $0.1 million. The acquired technology and employee related intangibles have estimated lives ranging from four years to seven years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 7.0 years. Approximately $13.4 million was allocated to goodwill, which represents synergistic benefits expected to be generated from incorporating 360Fresh’s technology capabilities into the Company’s software programs and scaling their existing products across the Company’s large membership base. Goodwill is not deductible for tax purposes.

The financial results of 360Fresh 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.

ActiveStrategy, Inc.

On October 1, 2012, the Company acquired for cash all of the issued and outstanding capital stock of ActiveStrategy, Inc. (“ActiveStrategy”), a Philadelphia-based performance improvement technology and consulting firm with innovative solutions for tracking and augmenting organizational effectiveness. This transaction enhances the Company’s existing performance improvement technology capabilities. The total purchase price, net of cash acquired, of $14.9 million consisted of an initial payment of $12.6 million of cash and an additional $2.3 million that has been placed into escrow and will be released by March 12, 2014 if specified indemnity conditions are satisfied. This indemnity escrow is not carried on the accompanying consolidated balance sheets.

The total purchase price was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values as of October 1, 2012. 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, $1.5 million was allocated to net acquired tangible assets, which consist of accounts receivable of $1.3 million, deferred tax assets, net of $0.9 million, and other current assets of $0.3 million, netted by $1.0 million of acquired deferred revenue. Of the total estimated purchase price, $5.5 million was allocated to intangible assets, which consist of the value assigned to acquired technology related intangibles of $3.0 million, customer relationship and employee related intangibles of $1.0 million, and trademarks of $1.5 million. The acquired intangible assets have estimated lives ranging from four years to eleven years based on the cash flow estimates used to create the valuation models of each identifiable asset with a weighted average amortization period of 7.2 years. Approximately $7.9 million was allocated to goodwill, which represents synergistic benefits expected to be generated from scaling ActiveStrategy’s offerings across the Company’s large membership base. Goodwill is not deductible for tax purposes.

The financial results of ActiveStrategy 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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Recent Accounting Pronouncements (Policies)

6 Months Ended

Sep. 30, 2013

Accounting Changes And Error Corrections [Abstract]

Income Taxes

In July 2013, the Financial Accounting Standards Board issued accounting guidance related to income taxes, which requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward when settlement in this manner is available under the tax law. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The Company will adopt this guidance for its fiscal year beginning April 1, 2014. The Company does not expect the adoption of this guidance to have a material effect on its financial position or results of operations.

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Stock-based Compensation - Summary of Changes in RSUs (Detail) (USD $)	6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of RSUs, Non-vested, beginning of period	943,206	896,640
Number of RSUs, Granted	394,328	308,152
Number of RSUs, Forfeited	(22,316)	(2,904)
Number of RSUs, Vested	(339,710)	(273,444)
Number of RSUs, Non-vested, end of period	975,508	928,444
Weighted Average Grant Date Fair Value Non-vested, beginning of Period	$ 29.50	$ 20.77
Weighted Average Grant Date Fair Value, Granted	$ 48.76	$ 43.96
Weighted Average Grant Date Fair Value, Forfeited	$ 36.08	$ 22.75
Weighted Average Grant Date Fair Value, Vested	$ 26.50	$ 19.78
Weighted Average Grant Date Fair Value Non-vested, end of Period	$ 38.18	$ 28.75

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Revolving Credit Facility

6 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Revolving Credit Facility

Note 11. Revolving credit facility

In July 2012, the Company entered into a $150.0 million five-year senior secured revolving credit facility under a credit agreement with a syndicate of lenders. Under the revolving 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 specified 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 revolving credit facility at the end of a period may not be reflective of the total amounts outstanding during such period.

Amounts borrowed under the revolving 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, 2013, there were no amounts outstanding under the revolving credit facility and $150.0 million was available for borrowing.

The Company is required under the revolving credit facility to satisfy three financial ratios on a quarterly basis. The Company was in compliance with these financial covenants as of September 30, 2013.

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Investments in and Advances to Unconsolidated Entities - Summary of Financial Position of Evolent (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013 Evolent LLC [Member]	Sep. 22, 2013 Evolent [Member]	Mar. 31, 2013 Evolent [Member]
Assets:
Current assets	$ 88,927	$ 15,552	$ 9,842
Non-current assets	19,686	23,496	10,571
Total assets	108,613	39,048	20,413
Liabilities and Members' Equity:
Current liabilities	25,721	29,418	11,716
Non-current liabilities	3,638	26,638	10,116
Total liabilities	29,359	56,056	21,832
Redeemable shares	43,738
Members' equity	35,506	(17,008)	(1,419)
Total liabilities and members' equity	$ 108,613	$ 39,048	$ 20,413

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Stock-based Compensation - 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, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Stock-based compensation expense included in Costs and expenses
Income from operations	$ (11,390)	$ (12,221)	$ (22,128)	$ (21,312)
Net income	(9,002)	(7,373)	(12,695)	(11,214)
Stock Option and RSUs [Member]
Stock-based compensation expense included in Costs and expenses
Total costs and expenses	4,407	3,405	9,066	6,911
Income from operations	(4,407)	(3,405)	(9,066)	(6,911)
Net income	(2,710)	(2,101)	(5,576)	(4,264)
Impact on diluted earnings per share	$ 0.08	$ 0.06	$ 0.15	$ 0.12
Cost of Services [Member]
Stock-based compensation expense included in Costs and expenses
Total costs and expenses	1,284	989	2,689	1,993
Member Relations and Marketing [Member]
Stock-based compensation expense included in Costs and expenses
Total costs and expenses	925	658	1,901	1,336
General and Administrative [Member]
Stock-based compensation expense included in Costs and expenses
Total costs and expenses	2,198	1,758	4,476	3,582
Depreciation and Amortization [Member]
Stock-based compensation expense included in Costs and expenses
Total costs and expenses

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Fair Value Measurements - Reconciliation of Change in Contingent Earn-out Liabilities (Detail) (Contingent Earn-Out Liabilities [Member], USD $) In Thousands, unless otherwise specified							3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2013 Southwind [Member]	Sep. 30, 2012 Southwind [Member]	Sep. 30, 2013 Southwind [Member]	Sep. 30, 2012 Southwind [Member]	Sep. 30, 2012 Cielo MedSolutions, LLC [Member]	Sep. 30, 2013 PivotHealth [Member]	Sep. 30, 2012 PivotHealth [Member]	Sep. 30, 2013 PivotHealth [Member]	Sep. 30, 2012 PivotHealth [Member]	Sep. 30, 2013 360 Fresh [Member]	Sep. 30, 2013 360 Fresh [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance	$ 13,200	$ 14,500	$ 15,200	$ 22,500	$ 22,900	$ 20,200
Adjustment made to the fair value of contingent liability								(100)	400	3,700	100	(1,000)	100	(1,000)	(300)	100	400
Earn-out payment							(400)	(400)	(1,800)	(1,200)
Balance	$ 13,200	$ 14,500	$ 15,200	$ 22,500	$ 22,900	$ 20,200

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Property and Equipment (Tables)

6 Months Ended

Sep. 30, 2013

Property Plant And Equipment [Abstract]

Schedule of Property and Equipment

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

	As of
	September 30, 2013			March 31, 2013
Leasehold improvements	$	35,614		$	29,953
Furniture, fixtures, and equipment		40,278			36,502
Software		78,438			62,589
Property and equipment, gross		154,330			129,044
Accumulated depreciation and amortization		(67,402	)		(57,870	)
Property and equipment, net	$	86,928		$	71,174

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Marketable Securities (Tables)

6 Months Ended

Sep. 30, 2013

Investments Debt And Equity Securities [Abstract]

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, 2013
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	16,296	$	17,344	$	—	$	1,048
Tax exempt obligations of states		110,514		112,840		1,159		3,485
	$	126,810	$	130,184	$	1,159	$	4,533

	As of March 31, 2013
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	25,430	$	25,347	$	83	$	—
Tax exempt obligations of states		131,409		129,550		2,715		856
	$	156,839	$	154,897	$	2,798	$	856

Marketable Securities Maturities

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

	As of September 30, 2013
	Fair market value		Amortized cost
Matures in less than 1 year	$	4,501	$	4,500
Matures after 1 year through 5 years		33,017		32,328
Matures after 5 years through 10 years		59,947		61,967
Matures after 10 years through 20 years		29,345		31,389
	$	126,810	$	130,184

Gross Unrealized Losses and Fair Value of Company's Investments

The following table shows the gross unrealized losses and fair value of the Company’s investments as of September 30, 2013 with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	Less than 12 months				12 months or more				Total
	Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
U.S. government-sponsored enterprises	$	16,296	$	1,048	$	—	$	—	$	16,296	$	1,048
Tax exempt obligations of states		50,008		2,240		21,573		1,245		71,581		3,485
	$	66,304	$	3,288	$	21,573	$	1,245	$	87,877	$	4,533

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Goodwill and Intangibles - Gross and Net Carrying Balances and Accumulated Amortization of Intangibles (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2013	Mar. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (years)	4 years 1 month 6 days
Gross carrying amount	$ 51,904	$ 49,187
Accumulated amortization	(20,513)	(16,806)
Net carrying amount	31,391	32,381
Capitalized Software [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (years)	5 years
Gross carrying amount	8,745	6,438
Accumulated amortization	(1,481)	(1,018)
Net carrying amount	7,264	5,420
Developed Software [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (years)	5 years 10 months 24 days
Gross carrying amount	19,250	19,250
Accumulated amortization	(6,269)	(4,659)
Net carrying amount	12,981	14,591
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (years)	7 years 3 months 18 days
Gross carrying amount	13,110	12,700
Accumulated amortization	(5,702)	(4,735)
Net carrying amount	7,408	7,965
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (years)	6 years 3 months 18 days
Gross carrying amount	4,200	4,200
Accumulated amortization	(2,398)	(2,118)
Net carrying amount	1,802	2,082
Non-compete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (years)	4 years 3 months 18 days
Gross carrying amount	1,400	1,400
Accumulated amortization	(767)	(633)
Net carrying amount	633	767
Customer Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average useful life (years)	4 years 10 months 24 days
Gross carrying amount	5,199	5,199
Accumulated amortization	(3,896)	(3,643)
Net carrying amount	$ 1,303	$ 1,556

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Fair Value Measurements - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended	6 Months Ended						1 Months Ended	6 Months Ended	45 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2012	Mar. 31, 2013	Jun. 30, 2009	Sep. 30, 2013 PivotHealth [Member]	Aug. 01, 2011 PivotHealth [Member]	Oct. 31, 2012 Southwind [Member]	Sep. 30, 2013 Southwind [Member]	Sep. 30, 2013 Southwind [Member]	Dec. 31, 2009 Southwind [Member]	Sep. 30, 2013 360 Fresh [Member]	Nov. 15, 2012 360 Fresh [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	$ 0.39	$ 0.39	$ 0.39		$ 0.39	$ 0.00
Fair value of estimated additional contingent payments							0	2,900,000		10,200,000	10,200,000	5,600,000	2,900,000	2,500,000
Fair value estimate discount rate										15.00%			20.00%
Earn-out liability									5,400,000		14,300,000
Shares transferred to satisfy earn-out liability									112,408
Gain on conversion of note receivable to preferred stock	4,000,000	4,000,000	4,000,000
Fair value adjustments			$ 0	$ 0

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Marketable Securities - Marketable Securities Maturities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Mar. 31, 2013
Available For Sale Securities [Abstract]
Matures in less than 1 year, Fair market value	$ 4,501
Matures after 1 year through 5 years, Fair market value	33,017
Matures after 5 years through 10 years, Fair market value	59,947
Matures after 10 years through 20 years, Fair market value	29,345
Fair market value	126,810	156,839
Matures in less than 1 year, Amortized cost	4,500
Matures after 1 year through 5 years, Amortized cost	32,328
Matures after 5 years through 10 years, Amortized cost	61,967
Matures after 10 years through 20 years, Amortized cost	31,389
Amortized cost	$ 130,184	$ 154,897

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Investments in and Advances to Unconsolidated Entities - Summary of Operating Results of Evolent (Detail) (Evolent [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 22, 2013	Sep. 30, 2012	Sep. 22, 2013	Sep. 30, 2012
Evolent [Member]
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
Revenue	$ 12,688	$ 2,193	$ 20,214	$ 2,262
Operating expenses	(18,001)	(7,440)	(34,030)	(12,655)
Depreciation and amortization	(456)	(178)	(852)	(482)
Interest, net	(401)	3	(660)	7
Taxes	(6)		(6)
Net loss	$ (6,176)	$ (5,422)	$ (15,334)	$ (10,868)

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Earnings Per Share (Tables)

6 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

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,
	2013		2012		2013		2012
Basic weighted average common shares outstanding		35,883		34,660		35,686		34,421
Effect of dilutive outstanding stock-based awards		1,014		1,481		1,072		1,621
Dilutive impact of earn-out liability		—		112		—		112
Diluted weighted average common shares outstanding		36,897		36,253		36,758		36,154

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Property and Equipment - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Mar. 31, 2013
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 6,886,000	$ 4,430,000	$ 13,240,000	$ 8,516,000
Capitalized leases included in property and equipment	0		0
Property and equipment, net	86,928,000		86,928,000		71,174,000
Developed Software [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of Property and equipment			5 years
Depreciation and amortization	2,000,000	1,000,000	3,800,000	1,900,000
Property and equipment, net	36,000,000		36,000,000		28,300,000
Capitalized Software [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of Property and equipment			6 years
Depreciation and amortization	400,000	200,000	600,000	500,000
Furniture, Fixtures and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of Property and equipment			3 years
Furniture, Fixtures and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of Property and equipment			7 years
Plant, Property and Equipment [Member]
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 2,700,000	$ 3,200,000	$ 5,100,000	$ 6,100,000

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Fair Value Measurements (Tables)

6 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

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, 2013 using fair value hierarchy
	2013		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	73,383	$	73,383	$	—	$	—
Available-for-sale marketable securities (2)		126,810		126,810		—		—
Common stock warrants (3)		550		—		—		550
Financial liabilities
Contingent earn-out liabilities (4)		13,200		—		—		13,200
	Fair value as of March 31,		Fair value measurement as of March 31, 2013 using fair value hierarchy
	2013		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	57,829	$	57,829	$	—	$	—
Available-for-sale marketable securities (2)		156,839		156,839		—		—
Common stock warrants (3)		550		—		—		550
Financial liabilities
Contingent earn-out liabilities (4)		15,200		—		—		15,200

(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 5, “Marketable securities.”

(3) The fair value of the common stock warrants as of September 30, 2013 and March 31, 2013 was calculated to be $0.39 per share using a Black-Scholes-Merton model. The significant assumptions as of September 30, 2013 were as follows: risk-free interest rate of 1.7%; expected term of 5.72 years; expected volatility of 38.93%; dividend yield of 0.0%; weighted average share price of $1.00 per share; and expected warrants to become exercisable of approximately 1,400,000 shares. The significant assumptions as of March 31, 2013 were as follows: risk-free interest rate of 1.0%; expected term of 6.22 years; expected volatility of 39.38%; dividend yield of 0.0%; weighted average share price of $1.00 per share; and expected warrants to become exercisable of approximately 1,400,000 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 macroeconomic 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, 2013 and 2012 (in thousands):

	Three Months Ended September 30,					Six Months Ended September 30,
	2013		2012			2013		2012
Beginning balance	$	550	$	450		$	550	$	450
Fair value change in common stock warrants (1)		—		(110	)		—		(110	)
Ending balance	$	550	$	340		$	550	$	340

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

Reconciliation of Change 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, 2013 and 2012 (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2013			2012			2013			2012
Beginning balance	$	14,500		$	22,900		$	15,200		$	20,200
Fair value change in Southwind contingent earn-out liability (1)		—			(100	)		400			3,700
Fair value change in Cielo MedSolutions, LLC contingent earn-out liability (1)		—			—			—			100
Fair value change in PivotHealth contingent earn-out liability (1)		(1,000	)		100			(1,000	)		(300	)
Fair value change in 360Fresh contingent earn-out liability (1)		100			—			400			—
Southwind earn-out payment		(400	)		(400	)		(1,800	)		(1,200	)
Ending balance	$	13,200		$	22,500		$	13,200		$	22,500

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

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Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Statement Of Income And Comprehensive Income [Abstract]
Net unrealized (losses) gains on marketable securities, tax	$ (71)	$ 471	$ (2,115)	$ 678

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Business Description and Basis of Presentation

6 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

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 through discrete programs to hospitals, health systems, pharmaceutical and biotech companies, health care insurers, medical device companies, and colleges, universities, and other health care focused and educational institutions. Members of each renewable membership 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, 2013 and the Company’s quarterly report on Form 10-Q for the quarterly period ended June 30, 2013. The unaudited consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and a consolidated variable interest entity. The Company uses the equity method to account for equity investments in instances in which it owns common stock or securities deemed to be in-substance common stock and has the ability to exercise significant influence, but not control, over the investee and for all investments in partnerships or limited liability corporations where the investee maintains separate capital accounts for each investor. Investments in which the Company holds securities that are not in-substance common stock, or holds common stock or in-substance common stock, but has little or no influence are accounted for using the cost method. All significant intercompany transactions and balances have been eliminated. 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, 2013 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, 2013 may not be indicative of the results that may be expected for the Company’s fiscal year ending March 31, 2014, or any other period.

Revision to balance sheet and statement of cash flows

The accompanying March 31, 2013 consolidated balance sheet has been adjusted to correct immaterial errors in the previously reported amounts of membership fees receivable and deferred revenue. This correction resulted in an increase in membership fees receivable of $18.7 million, an increase in current deferred revenue of $11.8 million, and an increase in deferred revenue, net of current of $6.9 million.

Similar errors affecting membership fees receivable and deferred revenue were identified and corrected in the accompanying consolidated statement of cash flows for the six months ended September 30, 2012. Specifically, membership fees receivable was decreased by $1.0 million and deferred revenue was decreased by the same amount.

These corrections have no effect on the previously reported consolidated statements of income or stockholders’ equity for any period. The errors affected only balances within changes in working capital reported in cash flows from operating activities. Total cash flows from operating activities was unaffected by the corrections.

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Fair Value Measurements

6 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 4. 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 10, “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 the 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 privately held 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 3, “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, 2013 or 2012.

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, 2013 using fair value hierarchy
	2013		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	73,383	$	73,383	$	—	$	—
Available-for-sale marketable securities (2)		126,810		126,810		—		—
Common stock warrants (3)		550		—		—		550
Financial liabilities
Contingent earn-out liabilities (4)		13,200		—		—		13,200
	Fair value as of March 31,		Fair value measurement as of March 31, 2013 using fair value hierarchy
	2013		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents (1)	$	57,829	$	57,829	$	—	$	—
Available-for-sale marketable securities (2)		156,839		156,839		—		—
Common stock warrants (3)		550		—		—		550
Financial liabilities
Contingent earn-out liabilities (4)		15,200		—		—		15,200

(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 5, “Marketable securities.”

(3) The fair value of the common stock warrants as of September 30, 2013 and March 31, 2013 was calculated to be $0.39 per share using a Black-Scholes-Merton model. The significant assumptions as of September 30, 2013 were as follows: risk-free interest rate of 1.7%; expected term of 5.72 years; expected volatility of 38.93%; dividend yield of 0.0%; weighted average share price of $1.00 per share; and expected warrants to become exercisable of approximately 1,400,000 shares. The significant assumptions as of March 31, 2013 were as follows: risk-free interest rate of 1.0%; expected term of 6.22 years; expected volatility of 39.38%; dividend yield of 0.0%; weighted average share price of $1.00 per share; and expected warrants to become exercisable of approximately 1,400,000 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 macroeconomic 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 attributable primarily to 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, 2013 and 2012 (in thousands):

	Three Months Ended September 30,					Six Months Ended September 30,
	2013		2012			2013		2012
Beginning balance	$	550	$	450		$	550	$	450
Fair value change in common stock warrants (1)		—		(110	)		—		(110	)
Ending balance	$	550	$	340		$	550	$	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 maximum, become due and payable to the former owners 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 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% as of September 30, 2013. The Company’s fair value estimate of the Southwind earn-out liability was $5.6 million as of the date of acquisition. 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 contingent obligation payable in the Company’s common stock, which reduced the related earn-out liability by $5.4 million. As of September 30, 2013, $14.3 million had been earned and paid in cash and shares to the former owners of the Southwind business. As of September 30, 2013, based on current facts and circumstances, the estimated aggregate fair value of the remaining contingent obligation was $10.2 million, which will be paid at various intervals, if earned, over evaluation periods which extend through December 31, 2014.

The Company entered into an earn-out agreement in connection with its acquisition of PivotHealth, LLC (“PivotHealth”) on August 1, 2011. The additional 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 evaluation periods beginning at the acquisition date and extending through December 31, 2014. 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, 2013 was $0. The fair value of the PivotHealth earn-out liability is impacted by changes in estimates regarding expected operating results as of September 30, 2013.

The Company’s fair value estimate of the 360Fresh earn-out liability, which is payable in cash, was $2.5 million as of the date of acquisition. The estimated aggregate fair value of the contingent obligation for 360Fresh as of September 30, 2013 was $2.9 million. The fair value of the 360Fresh earn-out liability is impacted by changes in estimates regarding expected operating results and a discount rate, which was 20.0% as of September 30, 2013. See Note 3, “Acquisitions,” for additional information regarding the 360Fresh 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, 2013 and 2012 (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
	2013			2012			2013			2012
Beginning balance	$	14,500		$	22,900		$	15,200		$	20,200
Fair value change in Southwind contingent earn-out liability (1)		—			(100	)		400			3,700
Fair value change in Cielo MedSolutions, LLC contingent earn-out liability (1)		—			—			—			100
Fair value change in PivotHealth contingent earn-out liability (1)		(1,000	)		100			(1,000	)		(300	)
Fair value change in 360Fresh contingent earn-out liability (1)		100			—			400			—
Southwind earn-out payment		(400	)		(400	)		(1,800	)		(1,200	)
Ending balance	$	13,200		$	22,500		$	13,200		$	22,500

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

Non-recurring fair value measurements

During the three and six months ended September 30, 2013, the Company recognized a gain of $4.0 million on the conversion of the notes receivable from Evolent into Series B convertible preferred stock of Evolent LLC. See Note 8, “Investments in and advances to unconsolidated entities,” for additional information. The amount of the gain was based on the excess of the fair value of the Series B convertible preferred stock received over the carrying value the notes receivable exchanged. The fair value of the Series B convertible preferred stock used to calculate the gain was determined by reference to the per share price of issuances of the Series B convertible preferred stock by Evolent LLC to a third party at the same time the Company exchanged its note receivable. This transaction was not made in an active market; as such this measure is considered a Level 2 fair value measurement.

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, so that 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, 2013 and 2012, no fair value adjustments or material fair value measurements were required for non-financial assets or liabilities.

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Recent Accounting Pronouncements

6 Months Ended

Sep. 30, 2013

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 2. Recent accounting pronouncements

In July 2013, the Financial Accounting Standards Board issued accounting guidance related to income taxes, which requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward when settlement in this manner is available under the tax law. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The Company will adopt this guidance for its fiscal year beginning April 1, 2014. The Company does not expect the adoption of this guidance to have a material effect on its financial position or results of operations.

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Marketable Securities - Gross Unrealized Losses and Fair Value of Company's Investments (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	$ 66,304
Less than 12 months, Gross unrealized losses	3,288
12 months or more, Fair value	21,573
12 months or more, Gross unrealized losses	1,245
Total, Fair value	87,877
Total, Gross unrealized losses	4,533
U.S. Government-Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	16,296
Less than 12 months, Gross unrealized losses	1,048
Total, Fair value	16,296
Total, Gross unrealized losses	1,048
Tax Exempt Obligations of States [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	50,008
Less than 12 months, Gross unrealized losses	2,240
12 months or more, Fair value	21,573
12 months or more, Gross unrealized losses	1,245
Total, Fair value	71,581
Total, Gross unrealized losses	$ 3,485

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Goodwill and Intangibles (Tables)

6 Months Ended

Sep. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Gross and Net Carrying Balances and Accumulated Amortization of Intangibles

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

			As of September 30, 2013							As of March 31, 2013
	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	$	8,745	$	(1,481	)	$	7,264	$	6,438	$	(1,018	)	$	5,420
Acquired intangibles:
Developed software		5.9		19,250		(6,269	)		12,981		19,250		(4,659	)		14,591
Customer relationships		7.3		13,110		(5,702	)		7,408		12,700		(4,735	)		7,965
Trademarks		6.3		4,200		(2,398	)		1,802		4,200		(2,118	)		2,082
Non-compete agreements		4.3		1,400		(767	)		633		1,400		(633	)		767
Customer contracts		4.9		5,199		(3,896	)		1,303		5,199		(3,643	)		1,556
Total other intangibles			$	51,904	$	(20,513	)	$	31,391	$	49,187	$	(16,806	)	$	32,381

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Business Description and Basis of Presentation - Additional Information (Detail) (Immaterial Error [Member], USD $) In Millions, unless otherwise specified	6 Months Ended
	Sep. 30, 2012	Mar. 31, 2013
Immaterial Error [Member]
Quantifying Misstatement in Current Year Financial Statements [Line Items]
Increase in membership fees receivable		$ 18.7
Increase in current deferred revenue		11.8
Increase in deferred revenue, net of current		6.9
Decrease in membership fees receivable	1.0
Decrease in deferred revenue	$ 1.0

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Fair Value Measurements - Reconciliation of Change in Fair Value of Common Stock Warrants (Detail) (Common Stock Warrants [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Common Stock Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning balance	$ 550	$ 450	$ 550	$ 450
Fair value change in common stock warrants		(110)		(110)
Ending balance	$ 550	$ 340	$ 550	$ 340

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Stock-based Compensation - Summary of Changes in Common Stock Options (Detail) (USD $)	6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Options, Outstanding, beginning of period	2,692,353	3,812,228
Number of Options, Granted	429,693	347,760
Number of Options, Exercised	(830,633)	(1,036,456)
Number of Options, Forfeited	(41,802)	(4,500)
Number of Options, Cancellations
Number of Options, Outstanding, end of period	2,249,611	3,119,032
Number of Options, Exercisable, end of period	1,159,182
Weighted Average Exercise Price, Outstanding, beginning of period	$ 21.06	$ 17.04
Weighted Average Exercise Price, Granted	$ 48.13	$ 43.83
Weighted Average Exercise Price, Exercised	$ 16.26	$ 15.64
Weighted Average Exercise Price, Forfeited	$ 27.36	$ 9.26
Weighted Average Exercise Price, Cancellations
Weighted Average Exercise Price, Outstanding, end of period	$ 27.89	$ 20.51
Weighted Average Exercise Price, Exercisable, end of period	$ 18.36

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Other Non-Current Assets - Additional Information (Detail) (USD $)	6 Months Ended
	Sep. 30, 2013	Mar. 31, 2013
Property, Plant and Equipment [Line Items]
Warrants to purchase shares of company's common stock	6,015,000
Exercise price	$ 1.00
Warrants recorded at their fair value	$ 550,000	$ 550,000
Convertible preferred stock carries a dividend rate	8.00%
Dividends declared	$ 0
Convertible Preferred Stock of Private Company [Member]
Property, Plant and Equipment [Line Items]
Convertible preferred stock investment is recorded at cost	$ 5,000,000

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Goodwill and Intangibles - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Goodwill And Intangible Assets [Line Items]
Impairment of goodwill	$ 0	$ 0	$ 0	$ 0
Weighted average remaining useful life of acquired intangibles, years			5 years
Estimated useful lives of intangible assets			4 years 1 month 6 days
Amortization expense for intangible assets	6,886,000	4,430,000	13,240,000	8,516,000
Future amortization expense remainder of fiscal year ending 2014	3,800,000		3,800,000
Future amortization expense to be recorded in 2015	7,400,000		7,400,000
Future amortization expense to be recorded in 2016	4,600,000		4,600,000
Future amortization expense to be recorded in 2017	4,100,000		4,100,000
Future amortization expense to be recorded in 2018	3,600,000		3,600,000
Future amortization expense to be recorded thereafter	4,900,000		4,900,000
Intangible Assets [Member]
Goodwill And Intangible Assets [Line Items]
Amortization expense for intangible assets	$ 1,900,000	$ 1,200,000	$ 3,700,000	$ 2,400,000
Minimum [Member]
Goodwill And Intangible Assets [Line Items]
Estimated useful lives of intangible assets			6 months
Maximum [Member]
Goodwill And Intangible Assets [Line Items]
Estimated useful lives of intangible assets			10 years

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Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2013	Mar. 31, 2013
Statement Of Financial Position [Abstract]
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	35,986,832	35,138,465
Common stock, shares outstanding	35,986,832	35,138,465

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Goodwill and Intangibles

6 Months Ended

Sep. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangibles

Note 7. 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, 2013 or 2012. There was no impairment of goodwill recorded in the six months ended September 30, 2013 or 2012.

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, 2013, the weighted average remaining useful life of acquired intangibles was approximately 5.0 years. As of September 30, 2013, 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, 2013							As of March 31, 2013
	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	$	8,745	$	(1,481	)	$	7,264	$	6,438	$	(1,018	)	$	5,420
Acquired intangibles:
Developed software		5.9		19,250		(6,269	)		12,981		19,250		(4,659	)		14,591
Customer relationships		7.3		13,110		(5,702	)		7,408		12,700		(4,735	)		7,965
Trademarks		6.3		4,200		(2,398	)		1,802		4,200		(2,118	)		2,082
Non-compete agreements		4.3		1,400		(767	)		633		1,400		(633	)		767
Customer contracts		4.9		5,199		(3,896	)		1,303		5,199		(3,643	)		1,556
Total other intangibles			$	51,904	$	(20,513	)	$	31,391	$	49,187	$	(16,806	)	$	32,381

Amortization expense for intangible assets for the three and six months ended September 30, 2013, recorded in depreciation and amortization on the accompanying consolidated statements of income, was approximately $1.9 million and $3.7 million, respectively. 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. The following approximates the 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, 2014 and for each of the following five fiscal years ending March 31, 2015 through 2018: $3.8 million, $7.4 million, $4.6 million, $4.1 million, and $3.6 million, respectively, and $4.9 million thereafter.

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Statement Of Income And Comprehensive Income [Abstract]
Net income attributable to common stockholders	$ 9,002	$ 7,481	$ 12,695	$ 11,322
Other comprehensive income:
Net unrealized (losses) gains on available-for-sale securities, net of income taxes of ($71) and $471 for the three months ended September 30, 2013 and 2012, respectively, and ($2,115) and $678 for the six months ended September 30, 2013 and 2012, respectively	(117)	769	(3,451)	1,107
Comprehensive income	$ 8,885	$ 8,250	$ 9,244	$ 12,429

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Tax Disclosure [Abstract]
Unrecognized tax benefits	$ 0		$ 0
Interest or penalties on unrecognized tax benefits	$ 0	$ 0	$ 0	$ 0

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Mar. 31, 2013
Current assets:
Cash and cash equivalents	$ 73,383	$ 57,829
Marketable securities, current	4,501	16,611
Membership fees receivable, net	387,805	370,321
Prepaid expenses and other current assets	19,976	15,477
Deferred income taxes, current	9,928	7,664
Total current assets	495,593	467,902
Property and equipment, net	86,928	71,174
Intangible assets, net	31,391	32,381
Deferred incentive compensation and other charges	79,460	73,502
Deferred income taxes, net of current portion	4,427	3,888
Marketable securities, net of current portion	122,309	140,228
Goodwill	104,478	95,540
Investments in and advances to unconsolidated entities	20,000	6,265
Other non-current assets	5,550	5,550
Total assets	950,136	896,430
Current liabilities:
Deferred revenue, current	414,441	398,541
Accounts payable and accrued liabilities	79,692	75,089
Accrued incentive compensation	16,111	21,033
Total current liabilities	510,244	494,663
Deferred revenue, net of current portion	114,337	104,484
Other long-term liabilities	16,182	15,866
Total liabilities	640,763	615,013
Redeemable noncontrolling interest	100	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, 35,986,832 and 35,138,465 shares issued and outstanding as of September 30, 2013 and March 31, 2013, respectively	360	351
Additional paid-in capital	405,483	375,622
Accumulated deficit	(94,272)	(95,809)
Accumulated other comprehensive (loss) income	(2,190)	1,261
Total stockholders' equity controlling interest	309,381	281,425
Equity attributable to noncontrolling interest	(108)	(108)
Total stockholders' equity	309,273	281,317
Total liabilities and stockholders' equity	$ 950,136	$ 896,430

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Noncontrolling Interest - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013
Noncontrolling Interest [Abstract]
Redeemable noncontrolling interest	$ 0.1
Estimated maximum total redemption amount	$ 7.5
Noncontrolling interest ownership percentage	100.00%
Ownership interest	0.00%

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Investment in and Advances to Unconsolidated Entities (Tables)

6 Months Ended

Sep. 30, 2013

Summary of Financial Position of Evolent

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

	As of
	September 22, 2013			March 31, 2013
Assets:
Current assets	$	15,552		$	9,842
Non-current assets		23,496			10,571
Total assets	$	39,048		$	20,413
Liabilities and Members’ Equity:
Current liabilities	$	29,418		$	11,716
Non-current liabilities		26,638			10,116
Total liabilities	$	56,056		$	21,832
Members’ equity		(17,008	)		(1,419	)
Total liabilities and members’ equity	$	39,048		$	20,413

Summary of Operating Results of Evolent

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

	Three Months Ended						Six Months Ended
	September 22, 2013			September 30, 2012			September 22, 2013			September 30, 2012
Revenue	$	12,688		$	2,193		$	20,214		$	2,262
Operating expenses		(18,001	)		(7,440	)		(34,030	)		(12,655	)
Depreciation and amortization		(456	)		(178	)		(852	)		(482	)
Interest, net		(401	)		3			(660	)		7
Taxes		(6	)		—			(6	)		—
Net loss	$	(6,176	)	$	(5,422	)	$	(15,334	)	$	(10,868	)

Evolent LLC [Member]

Summary of Financial Position of Evolent

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

	As of September 30, 2013
Assets:
Current assets	$	88,927
Non-current assets		19,686
Total assets	$	108,613
Liabilities and Members’ Equity:
Current liabilities	$	25,721
Non-current liabilities		3,638
Total liabilities	$	29,359
Redeemable shares		43,738
Members’ equity		35,506
Total liabilities and members’ equity	$	108,613

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Subsequent Events

6 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

Note 16. Subsequent events

On October 8, 2013, the Company completed the acquisition for cash of Care Team Connect, Inc., a leading provider of comprehensive care management workflow solutions and analytics. The acquisition enhances the Company’s existing suite of population health technologies and service offerings and affirms the Company’s position as a leader in the care management market. The total purchase price consists of $35.3 million, a portion of which is reserved in escrow to secure indemnification and other obligations. The Company is in the process of finalizing the purchase price allocation and valuation of certain intangible assets.

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Property and Equipment - Schedule of Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Mar. 31, 2013
Property Plant And Equipment Net [Abstract]
Leasehold improvements	$ 35,614	$ 29,953
Furniture, fixtures, and equipment	40,278	36,502
Software	78,438	62,589
Property and equipment, gross	154,330	129,044
Accumulated depreciation and amortization	(67,402)	(57,870)
Property and equipment, net	$ 86,928	$ 71,174

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Stock-based Compensation - Additional Information (Detail) (USD $)	6 Months Ended		0 Months Ended		9 Months Ended	6 Months Ended
	Sep. 30, 2013	Sep. 30, 2013 Stock Options [Member]	Sep. 05, 2013 2009 Plan [Member]	Sep. 30, 2013 2009 Plan [Member]	Sep. 30, 2013 2006 Plan [Member]	Sep. 30, 2013 2005 Plan [Member]	Nov. 15, 2005 2005 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares increases for issuance			2,125,000
Common stock available for issuance			6,735,000	2,745,448		716,625	3,200,000
Maximum term for stock option			5 years
Maximum contractual term			7 years		5 years	7 years
Stock option awards, valued on the date of grant		$ 13.13
Stock option awards, risk-free interest rate		0.60%
Stock option awards, expected term		4 years
Stock option awards, expected volatility		33.24%
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	$ 40,800,000
Weighted average period of stock-based compensation	2 years 9 months 18 days

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Marketable Securities - 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, 2013	Mar. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Fair value	$ 126,810	$ 156,839
Amortized cost	130,184	154,897
Gross unrealized gains	1,159	2,798
Gross unrealized losses	4,533	856
U.S. Government-Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	16,296	25,430
Amortized cost	17,344	25,347
Gross unrealized gains		83
Gross unrealized losses	1,048
Tax Exempt Obligations of States [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	110,514	131,409
Amortized cost	112,840	129,550
Gross unrealized gains	1,159	2,715
Gross unrealized losses	$ 3,485	$ 856

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Fair Value Measurements - Fair Value Measurements of Financial Assets and Liabilities on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Mar. 31, 2013
Financial assets
Available-for-sale marketable securities	$ 126,810	$ 156,839
Recurring [Member]
Financial assets
Cash and cash equivalents	73,383	57,829
Available-for-sale marketable securities	126,810	156,839
Common stock warrants	550	550
Financial liabilities
Contingent earn-out liabilities	13,200	15,200
Recurring [Member] | Level 1 [Member]
Financial assets
Cash and cash equivalents	73,383	57,829
Available-for-sale marketable securities	126,810	156,839
Recurring [Member] | Level 2 [Member]
Financial assets
Cash and cash equivalents
Available-for-sale marketable securities
Common stock warrants
Financial liabilities
Contingent earn-out liabilities
Recurring [Member] | Level 3 [Member]
Financial assets
Common stock warrants	550	550
Financial liabilities
Contingent earn-out liabilities	$ 13,200	$ 15,200

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Fair Value Measurements - Fair Value Measurements of Financial Assets and Liabilities on Recurring Basis (Parenthetical) (Detail) (USD $)	6 Months Ended	12 Months Ended
	Sep. 30, 2013	Mar. 31, 2013	Jun. 30, 2009
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of the common stock warrants	$ 0.39	$ 0.39	$ 0.00
Warrants exercisable	1,400,000	1,400,000
Common Stock Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Risk-free interest rate	1.70%	1.00%
Expected term	5 years 8 months 19 days	6 years 2 months 19 days
Expected volatility	38.93%	39.38%
Dividend yield	0.00%	0.00%
Weighted average exercise price	$ 1.00	$ 1.00

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Property and Equipment

6 Months Ended

Sep. 30, 2013

Property Plant And Equipment [Abstract]

Property and Equipment

Note 6. 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 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 six years based on the cash flow estimate used to determine the value of the asset. The amount of acquired developed software amortization included in depreciation and amortization for the three and six months ended September 30, 2013 was approximately $0.4 million and $0.6 million, respectively. The amount of acquired developed software amortization included in depreciation and amortization for the three and six months ended September 30, 2012 was approximately $0.2 million and $0.5 million, respectively.

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, 2013 was $2.7 million and $5.1 million, respectively. The amount of depreciation expense recognized on plant, property and equipment during the three and six months ended September 30, 2012 was $3.2 million and $6.1 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, 2013 and March 31, 2013, the carrying value of internally developed capitalized software was $36.0 million and $28.3 million, respectively. Amortization expense for internally developed capitalized software for the three and six months ended September 30, 2013, recorded in depreciation and amortization on the accompanying consolidated statements of income, was approximately $2.0 million and $3.8 million, respectively. Amortization expense for internally developed capitalized software for the three and six months ended September 30, 2012, recorded in depreciation and amortization on the accompanying consolidated statements of income, was approximately $1.0 million and $1.9 million, respectively. Property and equipment consists of the following (in thousands):

	As of
	September 30, 2013			March 31, 2013
Leasehold improvements	$	35,614		$	29,953
Furniture, fixtures, and equipment		40,278			36,502
Software		78,438			62,589
Property and equipment, gross		154,330			129,044
Accumulated depreciation and amortization		(67,402	)		(57,870	)
Property and equipment, net	$	86,928		$	71,174

The Company evaluates its long-lived assets for impairment when changes in circumstances exist that suggests 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, 2013 or 2012.

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Stock-based Compensation (Tables)

6 Months Ended

Sep. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Changes in Common Stock Options

The following table summarizes the changes in common stock options granted under the Company’s stock incentive plans during the six months ended September 30, 2013 and 2012:

	Six Months Ended September 30,
	2013					2012
	Number of options			Weighted average exercise price		Number of options			Weighted average exercise price
Outstanding, beginning of period		2,692,353		$	21.06		3,812,228		$	17.04
Granted		429,693			48.13		347,760			43.83
Exercised		(830,633	)		16.26		(1,036,456	)		15.64
Forfeited		(41,802	)		27.36		(4,500	)		9.26
Cancellations		—			—		—			—
Outstanding, end of period		2,249,611		$	27.89		3,119,032		$	20.51
Exercisable, end of period		1,159,182		$	18.36

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, 2013 and 2012:

	Six Months Ended September 30,
	2013					2012
	Number of RSUs			Weighted average grant date fair value		Number of RSUs			Weighted average grant date fair value
Non-vested, beginning of period		943,206		$	29.50		896,640		$	20.77
Granted		394,328			48.76		308,152			43.96
Forfeited		(22,316	)		36.08		(2,904	)		22.75
Vested		(339,710	)		26.50		(273,444	)		19.78
Non-vested, end of period		975,508		$	38.18		928,444		$	28.75

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, 2013 and 2012 (in thousands, except per share amounts):

	Three Months Ended September 30,						Six Months Ended September 30,
	2013			2012			2013			2012
Stock-based compensation expense included in:
Costs and expenses:
Cost of services	$	1,284		$	989		$	2,689		$	1,993
Member relations and marketing		925			658			1,901			1,336
General and administrative		2,198			1,758			4,476			3,582
Depreciation and amortization		—			—			—			—
Total costs and expenses		4,407			3,405			9,066			6,911
Income from operations		(4,407	)		(3,405	)		(9,066	)		(6,911	)
Net income	$	(2,710	)	$	(2,101	)	$	(5,576	)	$	(4,264	)
Impact on diluted earnings per share	$	0.08		$	0.06		$	0.15		$	0.12

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Marketable Securities - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Mar. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Gross realized gains on sales of available-for-sale investments	$ 300,000	$ 0	$ 300,000	$ 0
Gross realized losses on sales of available-for-sale investments	300,000	0	300,000	0
Weighted average maturity of marketable securities			7 years 4 months 24 days
Pre-tax net unrealized losses on investments	3,400,000		3,400,000
Investments that will mature in one year	1,159,000		1,159,000		2,798,000
Within One Year [Member]
Schedule of Available-for-sale Securities [Line Items]
Investments that will mature in one year	100,000		100,000
Tax Exempt Obligations of States [Member]
Schedule of Available-for-sale Securities [Line Items]
Investments that will mature in one year	1,159,000		1,159,000		2,715,000
Unrealized losses existed for less than one year	18		18
U.S. Government-Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Investments that will mature in one year					$ 83,000
Unrealized losses existed for less than one year	7		7

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Other Non-Current Assets

6 Months Ended

Sep. 30, 2013

Investments All Other Investments [Abstract]

Other Non-Current Assets

Note 9. 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. The warrants are recorded at their fair value, which was $550,000 as of September 30, 2013 and March 31, 2013, 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 4, “Fair value measurements.” The convertible preferred stock investment is recorded at cost, and the carrying amount of this investment of $5.0 million as of September 30, 2013 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, 2013, 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, 2013 or 2012.

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Marketable Securities

6 Months Ended

Sep. 30, 2013

Investments Debt And Equity Securities [Abstract]

Marketable Securities

Note 5. 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, 2013
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	16,296	$	17,344	$	—	$	1,048
Tax exempt obligations of states		110,514		112,840		1,159		3,485
	$	126,810	$	130,184	$	1,159	$	4,533

	As of March 31, 2013
	Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses
U.S. government-sponsored enterprises	$	25,430	$	25,347	$	83	$	—
Tax exempt obligations of states		131,409		129,550		2,715		856
	$	156,839	$	154,897	$	2,798	$	856

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

	As of September 30, 2013
	Fair market value		Amortized cost
Matures in less than 1 year	$	4,501	$	4,500
Matures after 1 year through 5 years		33,017		32,328
Matures after 5 years through 10 years		59,947		61,967
Matures after 10 years through 20 years		29,345		31,389
	$	126,810	$	130,184

The following table shows the gross unrealized losses and fair value of the Company’s investments as of September 30, 2013 with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	Less than 12 months				12 months or more				Total
	Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses
U.S. government-sponsored enterprises	$	16,296	$	1,048	$	—	$	—	$	16,296	$	1,048
Tax exempt obligations of states		50,008		2,240		21,573		1,245		71,581		3,485
	$	66,304	$	3,288	$	21,573	$	1,245	$	87,877	$	4,533

There were $0.3 million in gross realized gains on sales of available-for-sale investments and $0.3 million in gross realized losses on sales of available-for-sale investments during both the three and six months ended September 30, 2013. There were no gross realized gains or losses on sales of available-for-sale investments during the three or six months ended September 30, 2012. The weighted average maturity on all marketable securities held by the Company as of September 30, 2013 was approximately 7.4 years. Pre-tax net unrealized losses on the Company’s investments of $3.4 million as indicated above were caused by the increase in market interest rates compared to the average interest rate of the Company’s marketable securities portfolio. Of this amount, a gain of $0.1 million is related to investments that mature before September 30, 2014. 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. There are eighteen tax exempt obligations of states and seven tax exempt obligations of U.S. government-sponsored enterprises with unrealized losses that have existed for less than one year. The Company does not consider these investments to be other-than-temporarily impaired as of September 30, 2013. 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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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net income before allocation to noncontrolling interest	$ 12,695	$ 11,214
Adjustments to reconcile net income before allocation to noncontrolling interest to net cash provided by operating activities:
Depreciation and amortization	13,240	8,516
Deferred income taxes	(737)	(408)
Excess tax benefits from stock-based awards	(12,839)	(9,721)
Stock-based compensation expense	9,066	6,911
Amortization of marketable securities premiums	1,358	958
Loss on investment in common stock warrants		110
Equity in loss of unconsolidated entities	1,907	2,716
Changes in operating assets and liabilities:
Membership fees receivable	(16,825)	(36,654)
Prepaid expenses and other current assets	8,340	(6,252)
Deferred incentive compensation and other charges	(5,958)	(3,958)
Deferred revenue	25,459	56,685
Accounts payable and accrued liabilities	6,281	22,456
Acquisition-related earn-out payments	(1,812)	(1,182)
Accrued incentive compensation	(4,922)	(6,524)
Other long-term liabilities	316	(3,976)
Net cash provided by operating activities	35,569	40,891
Cash flows from investing activities:
Purchases of property and equipment	(23,585)	(14,562)
Capitalized external use software development costs	(2,309)	(1,723)
Investment in and loans to unconsolidated entities	(15,641)
Cash paid for acquisition, net cash acquired	(11,482)
Redemptions of marketable securities	43,189	23,220
Purchases of marketable securities	(19,824)	(42,889)
Net cash used in investing activities	(29,652)	(35,954)
Cash flows from financing activities:
Proceeds from issuance of common stock from exercise of stock options	13,497	16,205
Withholding of shares to satisfy minimum employee tax withholding for vested restricted stock units	(5,796)	(3,844)
Proceeds from issuance of common stock under employee stock purchase plan	256	165
Excess tax benefits from stock-based awards	12,839	9,721
Contributions from noncontrolling interest		100
Purchases of treasury stock	(11,159)	(7,999)
Net cash provided by financing activities	9,637	14,348
Net increase in cash and cash equivalents	15,554	19,285
Cash and cash equivalents, beginning of period	57,829	60,642
Cash and cash equivalents, end of period	$ 73,383	$ 79,927

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Revolving Credit Facility - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Sep. 30, 2013	Jul. 30, 2012
Line of Credit Facility [Line Items]
Duration of senior secured revolving credit facility		5 years
Amount of revolving credit facility		$ 150.0
Additional borrowings under the revolving credit facility	50.0
Minimum increments under the credit agreement	10.0
Maximum principal amount of swing line loans	5.0
Issuance of letters of credit under sublimit	10.0
Revolving 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 revolving credit facility	0
Amounts available for borrowing	150.0
Secured Debt [Member]
Line of Credit Facility [Line Items]
Amount of revolving credit facility	$ 150.0
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%

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Investments in and Advances to Unconsolidated Entities - Additional Information (Detail) (USD $)	1 Months Ended		3 Months Ended	6 Months Ended				3 Months Ended		4 Months Ended	6 Months Ended			1 Months Ended		1 Months Ended
	Sep. 30, 2013	Aug. 31, 2011	Sep. 30, 2013	Sep. 30, 2013	Mar. 31, 2013	Aug. 31, 2011 Series B Preferred Stock [Member]	Sep. 30, 2013 Series A Preferred Stock [Member] Evolent Health Holdings Inc [Member]	Sep. 30, 2013 Evolent [Member]	Sep. 30, 2012 Evolent [Member]	Jul. 31, 2013 Evolent [Member]	Sep. 30, 2013 Evolent [Member]	Sep. 30, 2012 Evolent [Member]	Mar. 31, 2013 Evolent [Member]	Sep. 30, 2013 Evolent LLC [Member]	Sep. 30, 2013 Evolent LLC [Member] Evolent Health Holdings Inc [Member]	Sep. 30, 2013 Evolent LLC [Member] Series B Preferred Stock [Member]
Schedule of Equity Method Investments [Line Items]
Initial contribution		$ 10,000,000
Equity interest						44.00%	23.60%	44.00%			44.00%				57.00%	11.50%
Proportionate share of the losses								0	1,700,000		1,900,000	3,800,000
Recognized gain on investment included in equity in loss									1,100,000			1,100,000
Interest rate on convertible note										8.00%			8.00%
Carrying balance of note receivable													4,400,000
Additional funding provided										5,600,000
Decrease in carrying balance of notes receivable								2,700,000			4,000,000
Carrying balance of the company's investment in Series B convertible preferred shares	20,000,000		20,000,000	20,000,000	6,265,000			0			0					20,000,000
Payment to acquire series B preferred shares														9,600,000
Principal and accrued interest of the convertible term note														10,100,000
Series B convertible preferred shares																1,302,172
Gain generated by conversion outstanding principal and accrued interest	4,000,000		4,000,000	4,000,000
Carrying balance of the company's Series A convertible preferred investment							$ 0

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Acquisitions - Additional Information (Detail) (USD $)	6 Months Ended			1 Months Ended		1 Months Ended					0 Months Ended	3 Months Ended	6 Months Ended	0 Months Ended				0 Months Ended
	Sep. 30, 2013	Sep. 30, 2013 Minimum [Member]	Sep. 30, 2013 Maximum [Member]	Oct. 31, 2012 Active Strategy [Member]	Sep. 30, 2012 Active Strategy [Member]	Oct. 31, 2012 Active Strategy [Member] Minimum [Member]	Oct. 31, 2012 Active Strategy [Member] Maximum [Member]	Sep. 30, 2012 Active Strategy [Member] Acquired Technology Related Intangibles [Member]	Sep. 30, 2012 Active Strategy [Member] Customer Relationship and Employee Related Intangibles [Member]	Sep. 30, 2012 Active Strategy [Member] Trademarks [Member]	Nov. 15, 2012 360 Fresh [Member]	Sep. 30, 2013 360 Fresh [Member]	Sep. 30, 2013 360 Fresh [Member]	Nov. 15, 2012 360 Fresh [Member] Minimum [Member]	Nov. 15, 2012 360 Fresh [Member] Maximum [Member]	Nov. 15, 2012 360 Fresh [Member] Acquired Technology Related Intangibles [Member]	Nov. 15, 2012 360 Fresh [Member] Employee Related Intangibles [Member]	Jul. 08, 2013 Medical Referral Source Inc [Member]	Jul. 08, 2013 Medical Referral Source Inc [Member] Minimum [Member]	Jul. 08, 2013 Medical Referral Source Inc [Member] Maximum [Member]	Jul. 08, 2013 Medical Referral Source Inc [Member] Acquired Technology Related Intangibles [Member]	Jul. 08, 2013 Medical Referral Source Inc [Member] Customer Relationship and Employee Related Intangibles [Member]
Business Acquisition [Line Items]
Total purchase price					$ 14,900,000						$ 19,500,000							$ 11,500,000
Additional payments by escrow					2,300,000						3,400,000							2,300,000
Accounts receivable					1,300,000						300,000							700,000
Deferred tax assets					900,000													200,000
Liabilities assumed											4,100,000							400,000
Acquired deferred revenue					1,000,000						100,000							300,000
Accounts payable																		100,000
Intangible assets					5,500,000			3,000,000	1,000,000	1,500,000	9,900,000					9,800,000	100,000	2,100,000			1,700,000	400,000
Estimated useful lives of intangible assets	4 years 1 month 6 days	6 months	10 years			4 years	11 years							4 years	7 years				3 years	8 years
Weighted average useful life	5 years			7 years 2 months 12 days							7 years							4 years
Allocated goodwill					7,900,000						13,400,000							8,900,000
Initial payment in cash					12,600,000						13,600,000
Fair value of estimated additional contingent payments											2,500,000	2,900,000	2,900,000	0	8,000,000
Adjustment made to the fair value of contingent liability												100,000	400,000
Deferred tax liabilities											4,000,000
Tangible assets, net					1,500,000
Other current assets					$ 300,000

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Earnings Per Share - Reconciliation of Basic to Diluted Weighted Average Common Shares Outstanding (Detail) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Basic weighted average common shares outstanding	35,883	34,660	35,686	34,421
Effect of dilutive outstanding stock-based awards	1,014	1,481	1,072	1,621
Dilutive impact of earn-out liability		112		112
Diluted weighted average common shares outstanding	36,897	36,253	36,758	36,154

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Stockholders' Equity

6 Months Ended

Sep. 30, 2013

Equity [Abstract]

Stockholders' Equity

Note 12. Stockholders’ equity

On May 8, 2013, the Company’s Board of Directors authorized the Company to repurchase an additional $100 million of the Company’s common stock under its share repurchase program, bringing the total authorized repurchase amount under the program to $450 million since its inception. The Company repurchased 87,041 shares and 205,921 shares of its common stock at a total cost of approximately $5.0 million and $11.2 million in the three and six months ended September 30, 2013, respectively, pursuant to its share repurchase program. The Company repurchased 114,390 shares and 177,227 shares of its common stock at a total cost of approximately $5.0 million and $8.0 million in the three and six months ended September 30, 2012, respectively, pursuant to its share repurchase program. The total amount of common stock purchased from inception under the program as of September 30, 2013 was 15,856,015 shares at a total cost of $352.1 million. All repurchases to date have been made in the open market and all repurchased shares have been retired as of September 30, 2013. 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, 2013, the remaining authorized repurchase amount was $97.9 million.

During the six months ended September 30, 2013, the Company retired 205,921 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 $2,000, treasury stock of $11.2 million, and retained earnings of $11.1 million. A total of 15,856,015 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.

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Investment in and Advances to Unconsolidated Entities

6 Months Ended

Sep. 30, 2013

Equity Method Investments And Joint Ventures [Abstract]

Investment in and Advances to Unconsolidated Entities

Note 8. Investments in and advances to unconsolidated entities

In August 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% in Series A convertible preferred stock of Evolent and the right to appoint one person to Evolent’s board of directors. The Company exercises significant influence over Evolent, but does not control Evolent and is not the primary beneficiary of Evolent’s activities. At the time of formation, the Series A convertible preferred shares of Evolent were deemed to be in-substance common stock. As a result, the Company’s investment in Evolent was 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 addition, a member of the Company’s Board of Directors serves as the chief executive officer of Evolent.

During the three and six months ended September 30, 2012, the Company’s proportionate share of the losses of Evolent was $1.7 million and $3.8 million, respectively. During the three and six months ended September 30, 2013, the Company’s proportionate share of the losses of Evolent that was applied to the carrying value of its investment in Evolent was $0 million and $1.9 million, respectively. The losses not applied to the carrying value of the investment were applied to reduce the carrying value of notes receivable from Evolent. Equity in gain (loss) of unconsolidated entities on the accompanying consolidated statements of income for the three and six months ended September 30, 2012 includes a dilution gain of $1.1 million which the Company recognized in connection with Evolent’s July 2012 financing round. Evolent LLC is in the early stages of its business plan and, as a result, the Company expects both Holdings and Evolent LLC to continue to incur losses and require additional funding in the future.

During the period from January 2013 through July 2013, the Company provided interim funding to Evolent in the form of a convertible term note bearing interest at a rate of 8% per year, with such interest accruing on a daily basis and compounded annually. The carrying balance of the note receivable was $4.4 million as of March 31, 2013. The Company provided additional funding of $5.6 million during the period from April 2013 to July 2013. The Company’s proportionate share of the losses recognized by Evolent during the six month period from April 1, 2013 through September 22, 2013 exceeded the Company’s investment balance. As a result, the Company’s proportionate share of the excess losses were applied to the Company’s note receivable from Evolent at a rate consistent with the Company’s interest in Evolent’s outstanding debt, which was 44%. The carrying balance of the notes receivable was decreased by $2.7 million and $4.0 million during the three and six months ended September 30, 2013, respectively, to reflect the Company’s portion of Evolent’s losses after the Company’s equity investment balance was reduced to zero.

In September 2013, Evolent completed a reorganization in connection with a new round of equity financing (the “Series B Issuance”). Evolent’s reorganization included the creation of Evolent Health Holdings, Inc. (“Holdings”) and the conversion of Evolent into Evolent Health LLC (“Evolent LLC”), a limited liability company that is treated as a partnership for tax purposes. As a result of the reorganization, Holdings owns 57% of the equity interests in Evolent LLC. Holdings has no other operations other than its investment in Evolent LLC. The Company, together with certain other investors, also holds direct equity interests in Evolent LLC, which will continue as the operating company that will conduct the Evolent business. The Company participated in the Series B Issuance by providing $9.6 million in cash and converting $10.1 million in principal and accrued interest of the convertible term note described above in exchange for 1,302,172 Series B convertible preferred shares in Evolent LLC and the right to appoint an additional person to the boards of directors of both Evolent LLC and Holdings. The conversion of all outstanding principal and accrued interest under the note into equity securities generated a $4.0 million gain. The gain is included in equity in gain (loss) on unconsolidated entities on the accompanying consolidated statements of income for the three and six months ended September 30, 2013. Immediately following the Series B Issuance and reorganization, the Company owned 23.6% of Holdings through its Series A convertible preferred investment and 11.5% of Evolent LLC through its Series B convertible preferred investment.

On the date of the Series B Issuance, the Company re-evaluated the accounting for its investment in Holdings’ Series A convertible preferred stock. The Company determined that its Series A convertible preferred investment in Holdings should be accounted for under the cost method instead of the equity method since the investment no longer qualified as in-substance common stock. Evolent LLC maintains separate capital accounts for each of its shareholders; therefore, the Company accounts for its Series B convertible preferred investment in Evolent LLC under the equity method. The carrying balance of the Company’s Series A convertible preferred investment in Holdings was $0 as of September 30, 2013. Following the gain recognized on the exchange of the converted notes for the Series B convertible preferred shares of Evolent LLC, the carrying balance of the Company’s investment in Series B convertible preferred shares of Evolent LLC was $20.0 million as of September 30, 2013.

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

	As of
	September 22, 2013			March 31, 2013
Assets:
Current assets	$	15,552		$	9,842
Non-current assets		23,496			10,571
Total assets	$	39,048		$	20,413
Liabilities and Members’ Equity:
Current liabilities	$	29,418		$	11,716
Non-current liabilities		26,638			10,116
Total liabilities	$	56,056		$	21,832
Members’ equity		(17,008	)		(1,419	)
Total liabilities and members’ equity	$	39,048		$	20,413

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

	Three Months Ended						Six Months Ended
	September 22, 2013			September 30, 2012			September 22, 2013			September 30, 2012
Revenue	$	12,688		$	2,193		$	20,214		$	2,262
Operating expenses		(18,001	)		(7,440	)		(34,030	)		(12,655	)
Depreciation and amortization		(456	)		(178	)		(852	)		(482	)
Interest, net		(401	)		3			(660	)		7
Taxes		(6	)		—			(6	)		—
Net loss	$	(6,176	)	$	(5,422	)	$	(15,334	)	$	(10,868	)

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

	As of September 30, 2013
Assets:
Current assets	$	88,927
Non-current assets		19,686
Total assets	$	108,613
Liabilities and Members’ Equity:
Current liabilities	$	25,721
Non-current liabilities		3,638
Total liabilities	$	29,359
Redeemable shares		43,738
Members’ equity		35,506
Total liabilities and members’ equity	$	108,613

The operating results of Evolent LLC for the period from September 23, 2013 through September 30, 2013 were not material.

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Earnings Per Share

6 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Note 15. 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 includes contingently issuable shares related to the component of the Southwind earn-out settled in stock. For additional information regarding these shares, see Note 4, “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,
	2013		2012		2013		2012
Basic weighted average common shares outstanding		35,883		34,660		35,686		34,421
Effect of dilutive outstanding stock-based awards		1,014		1,481		1,072		1,621
Dilutive impact of earn-out liability		—		112		—		112
Diluted weighted average common shares outstanding		36,897		36,253		36,758		36,154

In the three months ended September 30, 2013 and 2012, 1.0 million and 0.4 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, 2013 and 2012, 1.1 million and 0.4 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.

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Stock-based Compensation

6 Months Ended

Sep. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-based Compensation

Note 13. Stock-based compensation

On September 5, 2013, the Company’s stockholders approved an amendment to the Company’s 2009 Stock Incentive Plan (the “2009 Plan”) that increased the number of shares of common stock authorized for issuance under the plan by 2,125,000 shares. The aggregate number of shares of the Company’s common stock available for issuance under the 2009 Plan, as amended, may not exceed 6,735,000, plus the shares that remained available for issuance under the Company’s 2006 Stock Incentive Plan (the “2006 Plan”) as of June 26, 2009 and shares subject to outstanding awards under the 2006 Plan that, on or after such date, cease for any reason to be subject to such awards (other than reason of exercise or settlement of the awards to the extent they are exercised for or settled in vested and non-forfeitable shares). On September 5, 2013, the Company’s stockholders also approved an amendment to the 2009 Plan that increased the maximum term for stock option and freestanding stock appreciation rights awards granted under the plan from five years to seven years. Stock-based awards granted under the 2006 Plan have a five year maximum contractual term and stock-based awards granted under the 2009 Plan have a seven year maximum contractual term. The aggregate number of shares of the Company’s common stock available for issuance under the Company’s 2005 Stock Incentive Plan (the “2005 Plan”) may not exceed 3,200,000, plus the shares that remained available for issuance under the Company’s 2001 Stock Incentive Plan (the “2001 Plan”) as of November 15, 2005 and shares subject to outstanding awards under the 2001 Plan that, on or after such date, cease for any reason to be subject to such awards (other than reason of exercise or settlement of the awards to the extent they are exercised for or settled in vested and non-forfeitable shares). Stock-based awards granted under the 2005 Plan have a seven year maximum contractual term. As of September 30, 2013, there were 2,745,448 shares available for issuance under the 2009 Plan and 716,625 shares available for issuance under the 2005 Plan.

The following table summarizes the changes in common stock options granted under the Company’s stock incentive plans during the six months ended September 30, 2013 and 2012:

	Six Months Ended September 30,
	2013					2012
	Number of options			Weighted average exercise price		Number of options			Weighted average exercise price
Outstanding, beginning of period		2,692,353		$	21.06		3,812,228		$	17.04
Granted		429,693			48.13		347,760			43.83
Exercised		(830,633	)		16.26		(1,036,456	)		15.64
Forfeited		(41,802	)		27.36		(4,500	)		9.26
Cancellations		—			—		—			—
Outstanding, end of period		2,249,611		$	27.89		3,119,032		$	20.51
Exercisable, end of period		1,159,182		$	18.36

The weighted average fair value of the options granted during the six months ended September 30, 2013 is estimated at $13.13 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 0.6%, an expected life of approximately four years, volatility of 33.24%, and dividend yield of 0.0% 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, 2013 and 2012:

	Six Months Ended September 30,
	2013					2012
	Number of RSUs			Weighted average grant date fair value		Number of RSUs			Weighted average grant date fair value
Non-vested, beginning of period		943,206		$	29.50		896,640		$	20.77
Granted		394,328			48.76		308,152			43.96
Forfeited		(22,316	)		36.08		(2,904	)		22.75
Vested		(339,710	)		26.50		(273,444	)		19.78
Non-vested, end of period		975,508		$	38.18		928,444		$	28.75

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, 2013 and 2012 (in thousands, except per share amounts):

	Three Months Ended September 30,						Six Months Ended September 30,
	2013			2012			2013			2012
Stock-based compensation expense included in:
Costs and expenses:
Cost of services	$	1,284		$	989		$	2,689		$	1,993
Member relations and marketing		925			658			1,901			1,336
General and administrative		2,198			1,758			4,476			3,582
Depreciation and amortization		—			—			—			—
Total costs and expenses		4,407			3,405			9,066			6,911
Income from operations		(4,407	)		(3,405	)		(9,066	)		(6,911	)
Net income	$	(2,710	)	$	(2,101	)	$	(5,576	)	$	(4,264	)
Impact on diluted earnings per share	$	0.08		$	0.06		$	0.15		$	0.12

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

As of September 30, 2013, $40.8 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 2.8 years.

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Document and Entity Information	6 Months Ended
	Sep. 30, 2013	Nov. 01, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
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		36,043,486

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Income Taxes

6 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Note 14. 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, 2013 or 2012. 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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Subsequent Events - Additional Information (Detail) (Subsequent Events [Member], USD $) In Millions, unless otherwise specified	Oct. 08, 2013
Subsequent Events [Member]
Subsequent Event [Line Items]
Purchase price of portion of which is reserved in escrow to secure indemnification and other obligations	$ 35.3

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Earnings Per Share - Additional Information (Detail) (Stock Compensation Plan [Member]) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Stock Compensation Plan [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share-based compensation awards	1.0	0.4	1.1	0.4