Grand Canyon Education, Inc. Reports First Quarter 2026 Results
For the three months ended March 31, 2026:
Service revenue for the three months ended March 31, 2026 was $308.8 million, an increase of $19.5 million, or 6.7%, as compared to service revenue of $289.3 million for the three months ended March 31, 2025. The increase year over year in service revenue was primarily due to an increase in university partner enrollments of 7.1% to 136,884 at March 31, 2026 as compared to 127,779 at March 31, 2025. Revenue per student decreased slightly between years primarily due to contract modifications with some of our university partners in which our revenue share percentage was reduced in exchange for us no longer reimbursing these partners for certain faculty costs which had the effect of reducing revenue per student and a slight decline year over year in revenue per student for online students due to the continued mix shift to students that have a slightly lower net tuition rate and a slight decline year over year in ground students which generate a higher revenue per student than online students. These decreases were partially offset by an additional day of revenue for the ground campus due to the start date shifting one day of revenue from the second quarter to the first quarter in 2026 which had a $1.0 million impact and the service revenue per student for accelerated Bachelor of Science in Nursing ("ABSN") students at off-campus classroom and laboratory sites generating a significantly higher revenue per student than we earn under our agreement with GCU, as these agreements generally provide us with a higher revenue share percentage, the partners have higher tuition rates than GCU and the majority of our partners' students take more credits on average per semester.
GCU enrollments increased to 132,354 at March 31, 2026, an increase of 6.9% over enrollments at March 31, 2025. University partner enrollments at our off-campus classroom and laboratory sites were 5,961, an increase of 18.6% over enrollments at March 31, 2025, which includes 1,431 and 1,021 GCU students at March 31, 2026 and 2025, respectively. Excluding sites that have been closed or are in teach out, total enrollments at our off-campus classroom and laboratory sites increased 20.3% between years. We opened five new sites in the year ended December 31, 2025 closed two sites in which we stopped recruiting new students in 2024 and merged two sites that were located in the same market bringing the total number of these sites to 47 at December 31, 2025, which has also positively impacted the enrollment growth. We plan to open one to two additional sites in the second half of 2026 while mutually agreeing with one partner to stop the recruiting of new students and begin teach outs at its three sites during the first quarter of 2026. Enrollments for GCU ground students were 21,948 at March 31, 2026, down slightly from 22,330 at March 31, 2025. The number of ground students has historically declined between the Fall and Spring semesters due to graduations significantly exceeding Spring new enrollments. GCU online enrollments were 110,406 at March 31, 2026, up from 101,443 at March 31, 2025, an increase of 8.8% between years.
Operating income for the three months ended March 31, 2026 was $95.5 million, an increase of $7.5 million, or 8.5%, as compared to $88.0 million for the same period in 2025. The operating margin for the three months ended March 31, 2026 and 2025 was 30.9% and 30.4%, respectively.
Income tax expense for the three months ended March 31, 2026 was $23.1 million, an increase of $3.3 million, or 16.9%, as compared to income tax expense of $19.8 million for the three months ended March 31, 2025. Our effective tax rate was 23.5% during the three months ended March 31, 2026 compared to 21.6% during the three months ended March 31, 2025. The effective tax rate increased year over year due to higher state income taxes and a decrease in excess tax benefits to $1.4 million as compared to $2.7 million in the three months ended March 31, 2026 and 2025, respectively. The inclusion of excess tax benefits and deficiencies as a component of our income tax expense increases the volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from share-based compensation awards are dependent on our stock price at the date the restricted stock awards vest. Our restricted stock awards vest in March each year so any benefit or expense will primarily impact the first quarter each year.
Net income for the three months ended March 31, 2026 was $75.3 million, an increase of $3.7 million, or 5.2% as compared to $71.6 million for the same period in 2025. As adjusted net income was $77.0 million and $73.3 million for the first quarters of 2026 and 2025, respectively.
Diluted net income per share was $2.80 and $2.52 for the first quarters of 2026 and 2025, respectively. As adjusted diluted net income per share was $2.86 and $2.57 for the first quarters of 2026 and 2025, respectively.
Adjusted EBITDA increased 8.5% to $110.7 million for the first quarter of 2026, compared to $102.0 million for the same period in 2025.
Liquidity and Capital Resources
Our liquidity position, as measured by cash and cash equivalents and investments decreased by $48.4 million between December 31, 2025 and March 31, 2026, which was largely attributable to cash expended for share repurchases and capital expenditures exceeding our cash provided by operations during the three months ended March 31, 2026. Our unrestricted cash and cash equivalents and investments were $251.7 million and $300.1 million at March 31, 2026 and December 31, 2025, respectively.
Grand Canyon Education, Inc. Reports First Quarter 2026 Results and Full Year Outlook 2026
2026 Outlook
Q2 2026:
Service revenue of between $260.0 million and $264.0 million;
Operating margin of between 20.1% and 21.3%;
Effective tax rate of 24.9%;
Diluted EPS of between $1.57 and $1.68; and
26.3 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of $1.6 million, which equates to a $0.06 impact on diluted EPS. Thus, as adjusted, non-GAAP diluted income per share of between $1.63 and $1.74.
Q3 2026:
Service revenue of between $271.5 million and $278.5 million;
Operating margin of between 21.0% and 23.0%;
Effective tax rate of 24.9%;
Diluted EPS of between $1.72 and $1.91; and
26.1 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of $1.6 million, which equates to a $0.06 impact on diluted EPS. Thus, as adjusted, non-GAAP diluted income per share of between $1.78 and $1.97.
Q4 2026:
Service revenue of between $329.0 million and $338.5 million;
Operating margin of between 36.4% and 38.2%;
Effective tax rate of 24.3%;
Diluted EPS of between $3.59 and $3.87; and
25.8 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of $1.6 million, which equates to a $0.06 impact on diluted EPS. Thus, as adjusted, non-GAAP diluted income per share of between $3.65 and $3.93.
Full Year 2026:
Service revenue of between $1,169.3 million and $1,189.8 million;
Operating margin of between 27.8% and 29.0%;
Effective tax rate of 24.3%;
Diluted EPS between $9.69 and $10.26; and
26.2 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of $6.4 million, which equates to a $0.24 impact on diluted EPS. Thus, as adjusted, non-GAAP diluted income per share of between $9.93 and $10.50.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of federal securities laws including information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation, and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new programs; whether regulatory, economic, or business developments or other matters may or may not have a material adverse effect on our financial position, results of operations, or liquidity; projections, predictions, expectations, estimates, and forecasts as to our business, financial and operating results, and future economic performance; and management's goals and objectives and other similar expressions concerning matters that are not historical facts. Words such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar expressions, the negative of these expressions, as well as statements in future tense, identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause our actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements include, but are not limited to: (i) legal and regulatory actions taken against us related to our services business, or against our university partners that impact their businesses and that directly or indirectly reduce the service revenue we can earn under our master services agreements; (ii) the occurrence of any event, change or other circumstance that could give rise to the termination of any of the key university partner agreements; (iii) our ability to properly manage risks and challenges associated with strategic initiatives, including potential acquisitions or divestitures of, or investments in, new businesses, acquisitions of new properties and new university partners, and expansion of services provided to our existing university partners; (iv) our ability to comply with the extensive regulatory framework applicable to us either directly as a third-party service provider or indirectly through our university partners; (v) our ability to manage risks associated with epidemics, pandemics, or public health crises; (vi) our ability to manage risks resulting from system disruptions, interruptions, or outages associated with our technology platforms or those of third-party service providers; (vii) the ability of our university partners' students to obtain federal Title IV funds, state financial aid, and private financing; (viii) potential damage to our reputation or other adverse effects as a result of negative publicity in the media, in the industry or in connection with governmental reports or investigations or otherwise; (ix) risks associated with changes in applicable federal and state laws and regulations and accrediting commission standards; (x) competition from other education service companies in our geographic region and market sector; (xi) our ability to hire and train new, and develop and train existing employees; (xii) the pace of growth of our university partners' enrollment and its effect on the pace of our own growth; (xiii) fluctuations in our revenues due to seasonality; (xiv) our ability to, on behalf of our university partners, convert prospective students to enrolled students and to retain active students to graduation; and (xv) other risks and uncertainties identified from time to time in documents filed with the Securities and Exchange Commission (the "SEC") by us, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on February 18, 2026.
Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. This press release should be read in conjunction with the information included in our other press releases, reports and other filings with the SEC. Understanding the information contained in these filings is important in order to fully understand GCE's reported financial results and our business outlook for future periods.
Grand Canyon Education, Inc. Reports First Quarter 2026 Results
Conference Call
Grand Canyon Education, Inc. will discuss its first quarter 2026 results and full year 2026 outlook during a conference call scheduled for today, April 30, 2026 at 4:30 p.m. Eastern time (ET).
Live Conference Dial-In:
Those interested in participating in the question-and-answer session should follow the conference dial-in instructions below. Participants may register for the call here to receive the dial-in numbers and unique PIN to access the call seamlessly. Please dial in at least ten minutes prior to the start of the call. Journalists are invited to listen only.
Webcast and Replay:
Investors, journalists and the general public may access a live webcast of this event at: Q1 2026 Grand Canyon Education Inc. Earnings Conference Call. A webcast replay will be available approximately two hours following the conclusion of the call at the same link.
About Grand Canyon Education, Inc.
Grand Canyon Education, Inc. ("GCE"), incorporated in 2008, is a publicly traded education services company that currently provides services to 20 university partners. GCE is uniquely positioned in the education services industry in that its leadership has over 30 years of proven expertise in providing a full array of support services in the post-secondary education sector and has developed significant technological solutions, infrastructure and operational processes to provide superior services in these areas on a large scale. GCE provides services that support students, faculty and staff of partner institutions such as marketing, strategic enrollment management, counseling services, financial services, technology, technical support, compliance, human resources, classroom operations, content development, faculty recruitment and training, among others. For more information about GCE visit the Company's website at www.gce.com.
Grand Canyon Education, Inc., 2600 W. Camelback Road, Phoenix, AZ 85017, www.gce.com.
Grand Canyon Education, Inc. Reports First Quarter 2026 Results
GRAND CANYON EDUCATION, INC.Consolidated Income Statements(Unaudited)
Three Months Ended
March 31,
2026
2025
(In thousands, except per share data)
Service revenue
$
308,760
$
289,310
Costs and expenses:
Technology and academic services
45,030
41,664
Counseling services and support
91,857
86,822
Marketing and communication
63,987
60,330
General and administrative
10,319
10,366
Amortization of intangible assets
2,105
2,105
Total costs and expenses
213,298
201,287
Operating income
95,462
88,023
Investment interest and other
