Grand Canyon Education, Inc.

Grand Canyon Education, Inc. provides technology, marketing, enrollment, counseling, financial-aid processing and other services to university partners. It serves 20 universities and trades on Nasdaq under LOPE, with a December 31 year-end. Grand Canyon University, its largest partner, accounted for 89.1% of service revenue in the first nine months of 2026.

Quarterly earnings beneath the headline growth

The prior-year quarter included a $35 million litigation settlement and $2.4 million of lease termination and impairment costs. Adjusted net income removes these and specified amortization, nonrecurring, severance and asset-disposal items, net of tax. It retains share-based compensation and ordinary legal and regulatory costs. Adjusted EBITDA makes additional adjustments, including those costs, and is a separate measure.

Total partner enrollment rose to 145,270, up 5.2%. GCU online enrollment increased 7.1%, while traditional ground enrollment declined 4.1%. Off-campus nursing and laboratory sites continued expanding, with 48 locations at September 30.

Management forecasts against actual results

Third-quarter revenue of $267.346 million was below the original July range of $268.5 million to $270.5 million. Adjusted EPS of $1.77 was within the earlier $1.74 to $1.78 range. Reported EPS of $1.67 was below the earlier $1.68 to $1.72 range.

The new fourth-quarter outlook is $320.5 million to $321.5 million of revenue and adjusted EPS of $3.63 to $3.67, compared with July's $324 million to $329 million and $3.75 to $3.85. Six fewer traditional campus revenue days moved $7.5 million from the third quarter into the fourth. Marketing and employee costs remain important to margins.

Cash resources and share repurchases

First-nine-month operating cash flow improved to $171.6 million from $143 million. Cash capital spending was $29.6 million. Program repurchases used about $270.8 million and employee share-withholding taxes another $7.5 million, bringing the combined cash payments to $278.3 million.

Cash and investments fell to $162.1 million from $300.1 million at December 31. The September balance comprised $58.8 million of cash and equivalents and $103.4 million of investments.

The September 28 secured revolving facility provides $100 million of commitments and matures in September 2031. It was undrawn at September 30 and is intended primarily for buybacks and general corporate purposes. Borrowings carry one-month Term SOFR plus a margin of 1.50% to 2.00%. A further $100 million requires additional lender commitments and satisfaction of conditions.

Operating lease liabilities totaled $114.0 million, with another $24.4 million of lease commitments for sites not yet opened. The board's October 28 authorization increase added $355 million; $394.5 million remained available on November 2, through the program's March 2028 expiration.

Contract and management developments

The amended GCU services agreement was signed July 29 and took effect July 1. It retains a 60% share of tuition and academic-related fees, removes ancillary revenue from the fee base and ends certain academic-cost reimbursements. Its initial term runs through June 2041 and it eliminates GCU's ability to terminate for convenience.

Lori Browning became interim chief financial officer in August after Daniel E. Bachus was placed on paid leave. The company said the leave concerned a government investigation into a nonemployee third party's stock trades, that the company was not its focus, and that the leave was unrelated to accounting issues.

The latest report describes ongoing disputes over marketing of GCU graduate programs. The company contests the claims and had recorded no liability for those actions because it could not estimate a loss range. The next operating tests are delivery against the revised fourth-quarter outlook, enrollment mix and the balance between buybacks, cash resources and borrowing.