THE ADVISORY BOARD COMPANY REPORTS
FISCAL YEAR 2007 THIRD QUARTER RESULTS

Company Reports Quarterly Revenues of $48.6 Million and 17% Contract Value Growth;
Issues Guidance for Calendar Year 2007 and Increases Share Repurchase Program;
Launches New Research Program

WASHINGTON, D.C. — (February 6, 2007) — The Advisory Board Company (NASDAQ: ABCO) today announced financial results for the third quarter of its fiscal year ending March 31, 2007. Revenues for the quarter increased 15.4% to $48.6 million, from $42.1 million in the third quarter of fiscal 2006. Contract value grew 17.2% to $194.1 million as of December 31, 2006, up from $165.6 million as of December 31, 2005. Net income for the third quarter increased to $6.5 million, or $0.34 per diluted share, from $3.3 million, or $0.17 per diluted share in the third quarter of fiscal 2006. Revenues for the nine months ended December 31, 2006 were $139.5 million, compared to $121.3 million for the nine months ended December 31, 2005. Net income for the nine months was $20.2 million, or $1.03 per diluted share, compared to $17.0 million, or $0.85 per diluted share in the same period a year ago.

In February 2006, the Company received notification that it had been certified as a Qualified High Technology Company (QHTC) for income tax purposes. Due to the Company’s QHTC status, the Company recorded a one-time noncash charge to the Company’s deferred tax asset during the three months ended December 31, 2005. In addition, effective April 2006, the Company adopted Statement of Financial Accounting Standards No. 123R (SFAS No. 123R), which provides the accounting rules for share-based compensation. To analyze results on a comparable basis to the prior year, the Company’s management uses and is providing adjusted financial results, including adjusted net income and earnings per diluted share that excludes share-based compensation expense and employer taxes paid in connection with exercises of employee stock options. The adjusted results for all periods presented also include effective income tax rates calculated assuming adoption of the provisions of SFAS No. 123R and the Company’s certification as a QHTC.

Including the adjustments discussed above, adjusted net income for the third quarter of fiscal year 2007 was $8.5 million, up from $8.1 million for the third quarter of fiscal year 2006. Adjusted earnings per diluted share for the third quarter of fiscal year 2007 was $0.44, up from $0.41 in the same quarter in the prior year. Adjusted net income for the nine months ended December 31, 2006 was $26.4 million, or $1.35 per diluted share compared to $23.0 million or $1.16 per diluted share in the same period a year ago. A reconciliation of the Company’s reported and adjusted results is set forth in the notes to the financial highlights table included below.

Frank Williams, Chairman and Chief Executive Officer of The Advisory Board Company, commented, “We are very pleased with our financial results for the quarter and for the calendar year, as we had strong revenue performance, 17% growth in contract value and earnings per share growth in excess of our stated targets. Across the quarter, we saw strong demand for our membership programs, particularly in the areas of cross-selling and new program introductions. Our performance was driven by cutting-edge research agendas, heavy member utilization of program services, and our continued ability to positively impact our members’ critical strategic and operational issues. Most importantly, we continue to see significant attachment in the market to our model of providing proven best practices to address the complexity inherent in today’s healthcare environment.”

He added, “I am also pleased to announce the launch of our newest membership program, the Nursing Operations Performance Program. Building upon our strong nursing franchise, this program assists Chief Nurse Executives in enhancing operational performance improvement across the hospital—a critical factor in both clinical quality and budget performance. Complementing our in-depth work on nursing productivity, the program offers best practice research, benchmarking data and a robust, web-based analytical tool to elevate nursing-driven outcomes throughout the enterprise, enhancing staff engagement, patient safety, clinical quality and service excellence. This program offering improves each member institution’s ability to surface problems and make faster, more strategic decisions at the front lines, which has a dramatic effect on overall hospital nursing operations. We have already established a strong charter membership for the program, including the Cleveland Clinic, H. Lee Moffitt Cancer Center, William Beaumont Hospital, Mountain States Health Alliance, Albert Einstein Medical Center and Inova Health System. The program is off to a great start and we are very excited about its potential.”

Outlook for Calendar Year 2007

Although the Company operates on a fiscal year ending March 31, 2007, the Company is providing guidance for the calendar year 2007. The following summarizes the Company’s guidance for the twelve months ending December 31, 2007. For calendar year 2007, the Company estimates revenue of approximately $210.8 million, adjusted income from operations of approximately $53.5 million, and adjusted earnings per diluted share of approximately $2.07. For the quarter ending March 31^st, 2007, the Company estimates revenue of approximately $49.8 million and adjusted earnings per diluted share of approximately $0.47. The Company expects an effective income tax rate of approximately 33.9% in the March quarter and 33.3% for the last three quarters of calendar year 2007. Consistent with the Company’s past presentations, adjusted results exclude equity-based compensation expenses. Adjusted results are estimated using effective tax rates and number of weighted average diluted shares calculated in accordance with accounting principles generally accepted in the United States (GAAP).

See “Reconciliation of Non-GAAP Financial Measures” for additional information on adjusted financial presentations and a reconciliation with results presented in accordance with GAAP.

Share Repurchase

During the three months ended December 31, 2006, the Company repurchased 215,447 shares of its common stock at a total cost of approximately $11.9 million. To date the Company has repurchased 2,945,928 shares of its common stock at a total cost of approximately $121.4 million.

The Company also announced that its Board of Directors authorized an increase in its share repurchase program of up to an additional $50 million of the Company’s common stock, bringing the total amount authorized to be spent under the program to $200 million. Repurchases will continue to be made from time to time in open market and privately negotiated transactions subject to market conditions. No minimum number of shares has been fixed. The Company will fund its share repurchases with cash on hand and cash generated from operations. At December 31, 2006, the Company had approximately $168.3 million in cash and marketable securities and no debt.

Organizational Update: Executive Promotions, Appointment of New Board Member

The Company announced today that David Felsenthal has been promoted to Chief Operating Officer and will assume additional responsibilities related to the strategic and operational management of the firm. Robert Musslewhite has also been promoted to Executive Vice President, taking on broad responsibility overseeing the firm’s performance management programs and analytics research. In addition, Scott Schirmeier, previously the Company’s General Manager of Sales and Marketing, was named Chief Marketing Officer in October 2006, reflecting his expanded role over marketing strategy and sales force management in a rapidly growing organization. Mr. Williams commented, “David, Robert and Scott have been an invaluable part of our management team for the past several years, and I am looking forward to an expansion of their leadership roles as we continue to build a world-class professional services organization prepared for scale and growth.”

Finally, the Company announced that Peter J. Grua has joined its Board of Directors. Currently a managing partner of HLM Venture Partners, Mr. Grua brings over 20 years of experience as a health care analyst and investor, with a particular focus on service and information technology businesses in the health care marketplace.

Collaboration Agreement

The Company also announced that it has entered into an agreement with the Corporate Executive Board Company to collaborate on several initiatives specific to each company’s traditional best demonstrated practice research memberships. In addition to structuring the terms for the companies to license certain research content from each other, the agreement also establishes a collaboration to enhance value to the firms’ existing and prospective members of such programs. The agreement also outlines several potential product development opportunities. The three-year collaboration includes renewal options for additional two-year terms. To facilitate the open sharing of information required for the collaboration, the agreement also includes a non-compete provision in the traditional best practice research memberships that extends one year beyond the collaboration. Mr. Williams commented, “We are very excited about this agreement with the Corporate Executive Board. We believe that this collaboration will result in an expanded research base, as well as product and service innovation for our respective members.”

The Company will hold an investor conference call to discuss its third quarter performance this evening, February 6, 2007, at 6:00 p.m. Eastern Standard Time. The conference call will be available via live web cast on the Company’s web site at www.advisoryboardcompany.com in the section entitled “Investor Information” found under the tab “About Us.” To participate by telephone, the dial-in number is 866.202.1971 and the access code is 51913916. Investors are advised to dial-in at least five minutes prior to the call to register. The web cast will be archived for seven days: from 8:00 p.m. Tuesday, February 6, until 8:00 p.m. Tuesday, February 13, 2007.

About The Advisory Board Company

The Advisory Board Company provides best practices research and analysis to the health care industry, focusing on business strategy, operations and general management issues. The Company provides best practices and research through discrete annual programs to a membership of more than 2,500 hospitals, health systems, pharmaceutical and biotech companies, health care insurers, and medical device companies in the United States. Each program typically charges a fixed annual fee and provides members with such services as best practice research reports, executive education, on-line analytical tools, and other supporting research services.

THE ADVISORY BOARD COMPANY
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
(Unaudited)

(1)

In order to allow investors to assess results on a basis consistent with those used by management, the following tables reconcile GAAP to adjusted amounts for the three and nine months ended December 31, 2006 and 2005, respectively. Adjusted results exclude equity-based compensation expenses (including the effects of SFAS No. 123R, restricted share unit compensation expense and employer taxes paid in connection with the exercise of employee stock options). In addition, for comparison purposes the Company’s effective tax rate and diluted share count for the three and nine months ended December 31, 2005 have been adjusted to reflect the Company’s certification as a QHTC and include the effects of SFAS No. 123R.

THE ADVISORY BOARD COMPANY
RECONCILIATION OF GAAP TO ADJUSTED RESULTS
(In thousands, except per share data)
(Unaudited)

Reconciliation of Non-GAAP Financial Measures

The Company believes its calculations of adjusted results to exclude noncash income tax charges and equity-based compensation charges provide additional information about the Company’s ongoing operating performance. The Company’s management uses the adjusted presentations to evaluate projected operating results on a basis that is comparable to that used for periods prior to implementation of SFAS No. 123R and provides such information publicly to assist in comparisons to prior periods. For historical results, a reconciliation between results as adjusted and in conformity with GAAP is shown in the attached schedule. The Company is not able to provide a quantitative reconciliation of its outlook for calendar year 2007 to GAAP as equity-based compensation and related expense are dependent upon a number of unknown factors, including the amount, type and timing of stock-based compensation grants, future stock prices, and the extent (if any) to which employee stock options are exercised. Because adjusted financial results are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, they may not be comparable as presented to other similarly titled measures of other companies.

Adjusted financial results are not measures of financial performance under GAAP and should not be viewed as a pro-forma presentation reflecting the elimination of the underlying share-based compensation programs, as those programs are an important element of the Company’s compensation structure and generally accepted accounting principles indicate that all forms of share-based payments should be valued and included as appropriate in results of operations. Management compensates for this aspect of the non-GAAP financial measures by separately evaluating its share-based compensation arrangements.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are hereby cautioned that these statements may be affected by certain factors, among others, set forth below and in the Company’s filings with the Securities and Exchange Commission, and consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. Factors that could cause actual results to differ materially from those indicated by forward-looking statements include, among others, the dependence on renewal of membership-based services, dependence on key personnel, the need to attract and retain qualified personnel, management of growth, new product development, competition, risks associated with anticipating market trends, industry consolidation, variability of quarterly operating results, possible volatility in the Company’s stock price, impact on our financials associated with some of our newer programs that are more dependent upon technology, the effects of adoption of SFAS No. 123R including the effect of the amount, type and timing of future stock-based compensation grants, and various factors related to income and other taxes, including whether the District of Columbia withdraws the Company’s status as a Qualified High-Tech Company. These factors are discussed more fully in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

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