Exhibit

“During the second quarter, we further executed on our strategy to establish Zovio as a leading education technology services company. Importantly, in July, we received approval for Ashford University to return to an independent, non-profit institution, which represented an inflection point in the separation and transformation of Ashford and Zovio. In addition, we saw the expansion of key partnerships with recently acquired Fullstack and TutorMe, as well as the benefit of our investments, both of which are laying the foundation for Zovio’s education technology ecosystem. At the same time, we continue to focus on establishing a strong foundation for Ashford as an independent, self-sustaining nonprofit delivering strong academic outcomes,” commented Andrew Clark, Founder, President and CEO of Zovio. “We believe through the execution of our strategic priorities we will create long-term growth and meaningful value for all our stakeholders.”

Non-GAAP operating loss for the three months ended June 30, 2019 was $4.8 million, compared with non-GAAP operating income of $13.3 million for the three months ended June 30, 2018. Non-GAAP operating loss for the three months ended June 30, 2019 excludes restructuring and impairment charges of $5.4 million, separation transaction costs of $1.8 million and acquisition costs of $8.3 million. Non-GAAP operating income for the three months ended June 30, 2018 excludes restructuring and impairment expense of $2.7 million, separation transaction costs of $1.1 million and a legal settlement charge of $0.1 million.

Non-GAAP net loss for the three months ended June 30, 2019 was $4.6 million, compared with non-GAAP net income of $13.3 million for the three months ended June 30, 2018. Non-GAAP net loss for the three months ended June 30, 2019 excludes restructuring and impairment charges of $5.4 million, separation transaction costs of $1.8 million, acquisition costs of $8.3 million and an income tax benefit of approximately $2.5 million. The income tax benefit is primarily associated with the acquisitions in the second quarter of 2019. Non-GAAP net income for the three months ended June 30, 2018 excludes restructuring and impairment expense of $2.7 million, separation

Non-GAAP operating loss for the six months ended June 30, 2019 was $8.6 million, compared with non-GAAP operating income of $13.7 million for the six months ended June 30, 2018. Non-GAAP operating loss for the six months ended June 30, 2019 excludes restructuring and impairment charges of $5.4 million, separation transaction costs of $4.0 million, acquisition costs of $9.2 million, and other non-GAAP costs of $0.2 million. Non-GAAP operating loss for the six months ended June 30, 2018 excludes restructuring and impairment charges of $2.6 million, separation transaction costs of $2.3 million and a legal settlement charge of $0.1 million.

Non-GAAP net loss for the six months ended June 30, 2019 was $7.9 million, compared with non-GAAP net income of $13.8 million for the six months ended June 30, 2018. Non-GAAP net loss for the six months ended June 30, 2019 excludes restructuring and impairment charges of $5.4 million, separation transaction costs of $4.0 million, acquisition costs of $9.2 million, other non-GAAP costs of $0.2 million and an income tax benefit of $2.5 million. The income tax benefit is primarily associated with the acquisitions in the second quarter of 2019. Non-GAAP net income for the six months ended June 30, 2018 excludes restructuring and impairment charges of $2.6 million, separation transaction costs of $2.3 million, a legal settlement charge of $0.1 million, as well as the related income tax benefit of $7.5 million.

This press release contains non-GAAP financial measures for non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP diluted income (loss) per share, EBITDA and Adjusted EBITDA. These non-GAAP measures exclude legal settlement expense, restructuring and impairment charges, separation transaction costs, acquisition costs, other non-GAAP costs, as well as certain income tax adjustments, as applicable. These non-

GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and are not based on a comprehensive set of accounting rules. Management believes non-GAAP financial measures are useful in providing investors with an understanding of how specific line items in the consolidated statements of income are affected by items that may not be indicative of the operating results of the Company’s core business. To the extent that other companies use similar methods in calculating and reporting non-GAAP operating results, the Company believes provision of supplemental non-GAAP financial information allows for a meaningful comparison of the Company’s performance against the performance of other companies. The Company further believes that these non-GAAP financial measures provide useful information regarding its ongoing operating activities and business trends related to its results of operations, as well as a meaningful comparison with historical financial results. The Company’s management and board of directors utilize these non-GAAP financial measures, together with the Company’s financial statements prepared in accordance with GAAP, in developing operating budgets and evaluating the Company’s performance. These non-GAAP financial measures are intended to supplement GAAP financial information, and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. Refer to the accompanying tables for a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Zovio Inc will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) today to discuss its latest financial results and recent highlights. The dial-in number for callers in the United States is (877) 395-6119, and the dial-in number for other callers is (647) 689-5537. The access code for all callers is 3457926. A live broadcast of the call will also be available on the Company’s website at http://ir.zovio.com.

Zovio Inc (NASDAQ: ZVO) is an education technology services company that partners with higher education institutions and employers to deliver innovative, personalized solutions to help learners and leaders achieve their aspirations. Zovio leverages its core strengths and applies its technology and capabilities to priority market needs. Using advanced data and analytics, Zovio identifies the most meaningful ways to enhance the learner experience and deliver strong outcomes for higher education institutions, employers, and learners. Zovio’s purpose is to help everyone be in a class of their own. For more information, visit www.zovio.com.

This news release may contain forward-looking statements which are not statements of historical fact and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding management’s intentions, hopes, beliefs or expectations, and statements regarding the Company’s outlook for the remainder of 2019 and beyond. These forward-looking statements are based on current information and expectations and are subject to various risks and uncertainties. The Company’s actual performance or results may differ materially from those expressed in or suggested by such statements due to various factors, including without limitation: our ability to successfully transition to being an education technology services company, and the success of our strategies with respect to student initiatives.

Additional information on factors that could cause actual plans implemented and actual results achieved to differ materially from those set forth in the forward-looking statements is included from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”), including, but not limited to, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on March 12, 2019, the Company’s quarterly reports on Form 10-Q and the Company’s current reports on Form 8-K which are available at www.zovio.com. You should not place undue reliance on any forward-looking statements. Forward-looking statements are made on the basis of management’s good faith beliefs, expectations and assumptions regarding future events based on information available at the time such statements are made. Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update or revise any forward-looking statements to reflect actual results or any changes in assumptions, expectations or other factors affecting such forward-looking statements, except to the extent required by applicable securities laws.



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018

Revenue	$	107,495		$	119,037		$	217,259		$	235,814
Costs and expenses:
Instructional costs and services	55,088			54,397			107,026			111,011
Admissions advisory and marketing	44,810			39,875			93,882			88,069
General and administrative	22,532			12,549			38,452			25,297
Legal settlement expense	—			141			—			141
Restructuring and impairment expense	5,394			2,729			5,423			2,570
Total costs and expenses	127,824			109,691			244,783			227,088
Operating income (loss)	(20,329		)	9,346			(27,524		)	8,726
Other income, net	297			282			896			532
Income (loss) before income taxes	(20,032		)	9,628			(26,628		)	9,258
Income tax benefit	(2,435		)	(5,452		)	(2,389		)	(7,132		)
Net income (loss)	$	(17,597	)	$	15,080		$	(24,239	)	$	16,390

Income (loss) per share:
Basic	$	(0.58	)	$	0.56		$	(0.84	)	$	0.60
Diluted	$	(0.58	)	$	0.55		$	(0.84	)	$	0.60
Weighted average number of common shares outstanding used in computing income (loss) per share:
Basic	30,215			27,170			28,706			27,167
Diluted	30,215			27,348			28,706			27,491



	June 30, 2019		December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	104,617	$	166,307
Restricted cash	20,049		18,619
Investments	2,344		2,068
Accounts receivable, net	33,720		27,015
Prepaid expenses and other current assets	25,754		18,255
Total current assets	186,484		232,264
Property and equipment, net	28,496		16,860
Operating lease assets	26,261		—
Goodwill and intangibles, net	47,199		12,441
Other long-term assets	8,704		7,927
Total assets	$	297,144	$	269,492

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	83,886	$	62,792
Deferred revenue and student deposits	59,384		63,834
Total current liabilities	143,270		126,626
Rent liability	24,928		3,183
Lease financing obligation	—		8,634
Other long-term liabilities	6,556		3,435
Total liabilities	174,754		141,878
Total stockholders’ equity	122,390		127,614
Total liabilities and stockholders’ equity	$	297,144	$	269,492



	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net income (loss)	$	(24,239	)	$	16,390
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Provision for bad debts	7,525			11,872
Depreciation and amortization	4,198			3,533
Deferred income taxes	75			8
Stock-based compensation	5,302			2,325
Noncash lease expense	9,345			—
Net gain on marketable securities	(203		)	(24		)
Reassessment of lease charges	558			1,227
Loss on disposal or impairment of fixed assets	—			334
Changes in operating assets and liabilities:
Accounts receivable	(8,579		)	(19,900		)
Prepaid expenses and other current assets	(1,355		)	1,828
Other long-term assets	(684		)	737
Accounts payable and accrued liabilities	7,086			(10,588		)
Deferred revenue and student deposits	(7,000		)	(8,335		)
Operating lease liabilities	(11,517		)	—
Other liabilities	(2,630		)	(8,624		)
Net cash used in operating activities	(22,118		)	(9,217		)
Cash flows from investing activities:
Capital expenditures	(17,767		)	(1,291		)
Purchases of investments	(74		)	(1,033		)
Capitalized costs for intangible assets	(293		)	(470		)
Cash paid in acquisition, net of cash acquired	(19,286		)	—
Sale of investments	—			975
Net cash used in investing activities	(37,420		)	(1,819		)
Cash flows from financing activities:
Proceeds from exercise of stock options	60			—
Proceeds from the issuance of stock under employee stock purchase plan	96			98
Tax withholdings on issuance of stock awards	(806		)	(753		)
Repurchase of common stock	—			(2,424		)
Net cash used in financing activities	(650		)	(3,079		)
Net decrease in cash, cash equivalents and restricted cash	(60,188		)	(14,115		)
Cash, cash equivalents and restricted cash at beginning of period	190,584			205,526
Cash, cash equivalents and restricted cash at end of period	$	130,396		$	191,411



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Operating Income (Loss) Reconciliation:
GAAP operating income (loss)	$	(20,329	)	$	9,346		$	(27,524	)	$	8,726
Legal settlement expense	—			141			—			141
Restructuring and impairment expense	5,394			2,729			5,423			2,570
Separation transaction costs	1,814			1,103			4,008			2,256
Acquisition costs	8,303			—			9,223			—
Other non-GAAP costs	—			—			238			—
Non-GAAP operating income (loss)	$	(4,818	)	$	13,319		$	(8,632	)	$	13,693

Net Income (Loss) Reconciliation:
GAAP net income (loss)	$	(17,597	)	$	15,080		$	(24,239	)	$	16,390
Legal settlement expense	—			141			—			141
Restructuring and impairment expense	5,394			2,729			5,423			2,570
Separation transaction costs	1,814			1,103			4,008			2,256
Acquisition costs	8,303			—			9,223			—
Other non-GAAP costs	—			—			238			—
Income tax impact, non-GAAP	(2,494		)	(5,780		)	(2,508		)	(7,546		)
Non-GAAP net income (loss)	$	(4,580	)	$	13,273		$	(7,855	)	$	13,811

Diluted Income (Loss) Per Share Reconciliation:
GAAP diluted income (loss) per share	$	(0.58	)	$	0.55		$	(0.84	)	$	0.60
Legal settlement expense	—			0.01			—			0.01
Restructuring and impairment expense	0.18			0.10			0.19			0.09
Separation transaction costs	0.06			0.04			0.14			0.08
Acquisition costs	0.27			—			0.32			—
Other non-GAAP costs	—			—			0.01			—
Income tax impact, non-GAAP	(0.08		)	(0.21		)	(0.09		)	(0.28		)
Non-GAAP diluted income (loss) per share	$	(0.15	)	$	0.49		$	(0.27	)	$	0.50

(In thousands)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
EBITDA and Adjusted EBITDA Reconciliation:
GAAP net income (loss)	$	(17,597	)	$	15,080		$	(24,239	)	$	16,390
Interest income (expense), net	(240		)	(272		)	(693		)	(507		)
Income tax benefit	(2,435		)	(5,452		)	(2,389		)	(7,132		)
Depreciation and amortization	2,699			1,775			4,198			3,533
EBITDA	(17,573		)	11,131			(23,123		)	12,284
Legal settlement expense	—			141			—			141
Restructuring and impairment charges	5,394			2,729			5,423			2,570
Separation transaction costs	1,814			1,103			4,008			2,256
Acquisition costs	7,471			—			8,391			—
Other non-GAAP costs	—			—			238			—
Income tax impact, non-GAAP	(2,494		)	(5,780		)	(2,508		)	(7,546		)
Adjusted EBITDA	$	(5,388	)	$	9,324		$	(7,571	)	$	9,705