Grand Canyon Education, Inc 10-Q for FY2026 Q3
Grand Canyon Education, Inc. (LOPE)
About this 10-Q
Grand Canyon Education, Inc filed this 10-Q on November 4, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Grand Canyon Education, Inc. reported nine-month service revenue of $840.2 million, up 5.3%, as university partner enrollments rose 5.2% to 145,270; net income increased 26.9% to $164.2 million for nine months ended September 30, 2026. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $267.35M
- up 2.4% from $261.14M a year earlier
- Net income
- $43.01M
- up 164.3% from net income of $16.27M a year earlier
- Diluted EPS
- $1.67
- up 187.9% from $0.58 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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| For the quarterly period ended |
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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| For the transition period from to |
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of | | (I.R.S. Employer |
(Address, including zip code, of principal executive offices)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
| Accelerated Filer ☐ | |
Non-accelerated Filer ☐ | | Smaller Reporting Company |
| | Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The total number of shares of common stock outstanding as of November 2, 2026, was
GRAND CANYON EDUCATION, INC.
FORM 10-Q
INDEX
2
PART I – FINANCIAL INFORMATION
Item 1.Financial Statements
GRAND CANYON EDUCATION, INC.
Consolidated Income Statements
(Unaudited)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
(In thousands, except per share data) |
| 2026 | | 2025 | | 2026 | | 2025 | ||||
Service revenue | | $ | | | $ | | | $ | | | $ | |
Costs and expenses: | |
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Technology and academic services | |
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Counseling services and support | |
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Marketing and communication | |
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General and administrative | |
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Litigation settlement | | | — | | | | | | — | | | |
Lease termination, impairment and other | | | — | | | | | | — | | | |
Amortization of intangible assets | |
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Total costs and expenses | |
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Operating income | |
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Investment interest and other | |
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Income before income taxes | |
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Income tax expense | |
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Net income | | $ | | | $ | | | $ | | | $ | |
Earnings per share: | |
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Basic income per share | | $ | | | $ | | | $ | | | $ | |
Diluted income per share | | $ | | | $ | | | $ | | | $ | |
Basic weighted average shares outstanding | |
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Diluted weighted average shares outstanding | |
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The accompanying notes are an integral part of these consolidated financial statements.
3
GRAND CANYON EDUCATION, INC.
Consolidated Balance Sheets
| | September 30, | | December 31, | ||
(In thousands, except par value) |
| 2026 | | 2025 | ||
| | (Unaudited) | | | | |
ASSETS: | | | | | | |
Current assets | | | |
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Cash and cash equivalents | | $ | | | $ | |
Investments | |
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Accounts receivable, net | |
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Income tax receivable | |
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Other current assets | |
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Total current assets | |
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Property and equipment, net | |
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Right-of-use assets | | | | | | |
Amortizable intangible assets, net | | | | | | |
Goodwill | |
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Other assets | |
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Total assets | | $ | | | $ | |
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |
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Current liabilities | |
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Accounts payable | | $ | | | $ | |
Accrued compensation and benefits | |
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Accrued liabilities | |
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Income taxes payable | |
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Deferred revenue | |
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Current portion of lease liability | |
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Total current liabilities | |
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Deferred income taxes, noncurrent | |
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Other long-term liability | | | | | | |
Lease liability, less current portion | |
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Total liabilities | |
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Commitments and contingencies | |
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Stockholders’ equity | |
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Preferred stock, $ | |
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Common stock, $ | |
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Treasury stock, at cost, | |
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Additional paid-in capital | |
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Accumulated other comprehensive (loss) gain | |
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Retained earnings | |
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Total stockholders’ equity | |
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Total liabilities and stockholders’ equity | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
4
GRAND CANYON EDUCATION, INC.
Consolidated Statements of Comprehensive Income
(Unaudited)
| | Three Months Ended | | Nine Months Ended | ||||||||
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| September 30, | | September 30, | ||||||||
(In thousands) | | 2026 | | 2025 | | 2026 | | 2025 | ||||
Net income | | $ | | | $ | | | $ | | | $ | |
Other comprehensive income, net of tax: | |
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Unrealized gains (losses) on available-for-sale securities, net of taxes of $ | |
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Comprehensive income | | $ | | | $ | | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
5
GRAND CANYON EDUCATION, INC.
Consolidated Statement of Stockholders’ Equity
(In thousands)
(Unaudited)
| | Nine Months Ended September 30, 2026 | | | | | | | | | | |||||||||||
| | | | | | | | | | | | | | Accumulated | | | | | | | ||
| | | | | | | | | | | | Additional | | Other | | | | | | | ||
| | Common Stock | | Treasury Stock | | Paid-in | | Comprehensive | | Retained | | | | |||||||||
| | Shares | | Par Value | | Shares | | Cost | | Capital | | Loss | | Earnings | | Total | ||||||
Balance at December 31, 2025 | | | | $ | | | | | $ | ( | | $ | | | $ | | | $ | | | $ | |
Comprehensive income | | — | | | — | | — | | | — | | | — | | | ( | | | | | | |
Common stock purchased for treasury | | — | | | — | | | | | ( | | | — | | | — | | | — | | | ( |
Restricted shares forfeited | | — | | | — | | | | | — | | | — | | | — | | | — | | | — |
Share-based compensation | | | | | | | | | | ( | | | | | | — | | | — | | | ( |
Balance at March 31, 2026 | | | | $ | | | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | |
Comprehensive income | | — | | | — | | — | | | — | | | — | | | | | | | | | |
Common stock purchased for treasury | | — | | | — | | | | | ( | | | — | | | — | | | — | | | ( |
Restricted shares forfeited | | — | | | — | | | | | — | | | — | | | — | | | — | | | — |
Share-based compensation | | | | | — | | — | | | — | | | | | | — | | | — | | | |
Balance at June 30, 2026 | | | | $ | | | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | |
Comprehensive income | | — | | | — | | — | | | — | | | — | | | ( | | | | | | |
Common stock purchased for treasury | | — | | | — | | | | | ( | | | — | | | — | | | — | | | ( |
Restricted shares forfeited | | — | | | — | | | | | — | | | — | | | — | | | — | | | — |
Share-based compensation | | — | | | — | | — | | | — | | | | | | — | | | — | | | |
Balance at September 30, 2026 | | | | $ | |
| | | $ | ( | | $ | | | $ | ( | | $ | | | $ | |
6
GRAND CANYON EDUCATION, INC.
Consolidated Statement of Stockholders’ Equity
(In thousands)
(Unaudited)
| | Nine Months Ended September 30, 2025 | | | | | | | | | | |||||||||||
| | | | | | | | | | | | | | Accumulated | | | | | | | ||
| | | | | | | | | | | | Additional | | Other | | | | | | | ||
| | Common Stock | | Treasury Stock | | Paid-in | | Comprehensive | | Retained | | | | |||||||||
| | Shares | | Par Value | | Shares | | Cost | | Capital | | Loss | | Earnings | | Total | ||||||
Balance at December 31, 2024 | | | | $ | |
| | | $ | ( | | $ | | | $ | — | | $ | | | $ | |
Comprehensive income | | — | |
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Common stock purchased for treasury | | — | |
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Restricted shares forfeited | | — | |
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Share-based compensation | | | |
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Balance at March 31, 2025 | | | | $ | | | | | $ | ( | | $ | | | $ | ( | | $ | | | $ | |
Comprehensive income | | — | | | — | | — | | | — | | | — | | | | | | | | | |
Common stock purchased for treasury | | — | | | — | | | | | ( | | | — | | | — | | | — | | | ( |
Restricted shares forfeited | | — | | | — | | | | | — | | | — | | | — | | | — | | | — |
Share-based compensation | | | | | — | | — | | | — | | | | | | — | | | — | | | |
Balance at June 30, 2025 | | | | $ | | | | | $ | ( | | $ | | | $ | | | $ | | | $ | |
Comprehensive income | | — | | | — | | — | | | — | | | — | | | | | | | | | |
Common stock purchased for treasury | | — | | | — | | | | | ( | | | — | | | — | | | — | | | ( |
Restricted shares forfeited | | — | | | — | | | | | — | | | — | | | — | | | — | | | — |
Share-based compensation | | — | |
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Balance at September 30, 2025 | | | | $ | |
| | | $ | ( | | $ | | | $ | | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
7
GRAND CANYON EDUCATION, INC.
Consolidated Statements of Cash Flows
(Unaudited)
| | Nine Months Ended | ||||
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| September 30, | ||||
(In thousands) | | 2026 | | 2025 | ||
Cash flows provided by operating activities: | | | |
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Net income | | $ | | | $ | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
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Share-based compensation | |
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Depreciation and amortization | |
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Amortization of intangible assets | | | | | | |
Deferred income taxes | |
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Litigation settlement | | | — | | | |
Lease termination, impairment and other | | | — | | | |
Other, including fixed asset disposals | |
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Changes in assets and liabilities: | |
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Accounts receivable | |
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Other assets | |
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Right-of-use assets and lease liabilities | | | ( | | | |
Accounts payable | |
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Accrued liabilities | |
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Income taxes receivable/payable | |
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Deferred revenue | | | | | | |
Net cash provided by operating activities | |
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Cash flows provided by (used in) investing activities: | |
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Capital expenditures | |
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Additions of amortizable content | |
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Purchase of equity investment | | | — | | | ( |
Loss on equity investment | | | | | | |
Purchases of investments | |
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Proceeds from sale or maturity of investments | |
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Net cash provided by (used in) investing activities | |
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Cash flows used in financing activities: | |
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Repurchase of common shares and shares withheld in lieu of income taxes | | | ( | | | ( |
Revolving Credit Facility issuance costs | |
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Net cash used in financing activities | |
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Net decrease in cash and cash equivalents and restricted cash | |
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Cash and cash equivalents and restricted cash, beginning of period | |
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Cash and cash equivalents and restricted cash, end of period | | $ | | | $ | |
Supplemental disclosure of cash flow information | |
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Cash paid for interest | | $ | — | | $ | — |
Cash paid for income taxes | | $ | | | $ | |
Supplemental disclosure of non-cash investing and financing activities | |
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Purchases of property and equipment included in accounts payable | | $ | | | $ | |
ROU Asset and Liability recognition | | $ | | | $ | |
Excise tax on treasury stock repurchases | | $ | | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
8
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
1. Nature of Business
Grand Canyon Education, Inc. (together with its subsidiaries, the “Company” or “GCE”) is a publicly traded education services company dedicated to serving colleges and universities. GCE has developed significant technological solutions, infrastructure and operational processes to provide services to these institutions on a large scale. GCE’s most significant university partner is Grand Canyon University (“GCU”), an Arizona non-profit corporation, a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across
We also provide education services to numerous university partners across the United States. In the healthcare field, we work in partnership with a number of top universities and healthcare networks, offering healthcare-related academic programs at off-campus classroom and laboratory sites located near healthcare providers and developing high-quality, career-ready graduates who enter the workforce ready to meet the demands of the healthcare industry. In addition, we have provided certain services to a university partner to assist them in expanding their online graduate programs. As of September 30, 2026, GCE provides education services to
2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions have been eliminated in consolidation.
Unaudited Interim Financial Information
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and the instructions to Form 10-Q and Article 10, consistent in all material respects with those applied in its financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2025. They do not include all of the information and footnotes required by GAAP for complete financial statements. Such interim financial information is unaudited but reflects all adjustments that in the opinion of management are necessary for the fair presentation of the interim periods presented. Interim results are not necessarily indicative of results for a full year. These consolidated financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 from which the December 31, 2025 balance sheet information was derived.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company invests a portion of its cash in excess of current operating requirements in short term certificates of deposit and money market instruments. The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
Investments
As of September 30, 2026 and December 31, 2025, the Company considered its investments in corporate bonds, agency bonds, treasury bills and commercial paper as available-for-sale securities based on the Company’s intent for the respective securities. Available-for-sale securities are carried at fair value, determined using Level 1 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets. Unrealized investment gains and losses, net of tax, are reported as a separate component of other comprehensive income. Unrealized losses
9
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
considered to be other-than-temporary are recognized currently in earnings. Amortization of premiums, accretion of discounts, interest and dividend income and realized gains and losses are included in investment interest and other.
Property and Equipment
Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method. Normal repairs and maintenance are expensed as incurred. Expenditures that materially extend the useful life of an asset are capitalized. Construction in progress represents items not yet placed in service and are not depreciated. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Furniture and fixtures, computer equipment, and vehicles generally have estimated useful lives of , , and
Arrangements with GCU
On July 29, 2026, we entered into an Amended and Restated Master Services Agreement with GCU (the “Amended MSA”) in which amended and restated the Master Services Agreement with GCU, effective July 1, 2018 (the “Original MSA”). The Amended MSA is effective as of July 1, 2026, has an initial term of fifteen () years running through June 30, 2041, and, unless notice of non-renewal is given at least eighteen () months in advance of the end of the initial term or any renewal term, will automatically renew up to
Internally Developed Technology
The Company capitalizes certain costs related to internal-use software, primarily consisting of direct labor associated with creating the software. Software development projects generally include
Capitalized Content Development
The Company capitalizes certain costs to fulfill a contract related to the development and digital creation of content on a course-by-course basis for each university partner, many times in conjunction with faculty and subject matter experts. The Company is responsible for the conversion of instructional materials to an online format, including outlines, quizzes, lectures, and articles in accordance with the educational guidelines provided to us by our university partners, prior to the respective course commencing. We also capitalize the creation of learning objects which are digital assets such as online demonstrations, simulations, and case studies used to obtain learning objectives.
10
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
Costs that are capitalized include payroll and payroll-related costs for employees who are directly associated and spend time producing content and payments to faculty and subject matter experts involved in the process. The Company starts capitalizing content costs when it begins to develop or to convert a particular course, resources have been assigned and a timeline has been set. The content asset is placed in service when all work is complete, and the curriculum could be used for instruction. Capitalized content development assets are included in other assets in our consolidated balance sheets. The Company has concluded that the most appropriate method to amortize the deferred content assets is on a straight-line basis over the estimated life of the course, which is generally
Long-Lived Assets
The Company evaluates the recoverability of its long-lived assets for impairment, other than goodwill, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Leases
The Company determines if an arrangement is a lease at inception and evaluates the lease agreement to determine whether the lease is a finance or operating lease. Right-of-use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement to determine the present value of lease payments over the lease term. At lease inception, the Company determines the lease term by assuming no exercises of renewal options, due to the Company’s constantly changing geographical needs for its university partners. Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets and are recognized as lease expense on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, and the non-lease components are accounted for separately and not included in our ROU assets and lease liabilities. Leases primarily consist of off-campus classroom and laboratory site locations and office space.
Goodwill and Amortizable Intangible Assets
Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the tangible and intangible assets acquired and liabilities assumed. Goodwill is assessed at least annually for impairment during the fourth quarter, or more frequently if circumstances indicate potential impairment. Goodwill is allocated to our reporting unit at the education services segment, which is the same as the entity as a whole (entity level reporting unit). The Company has concluded there is
Finite-lived intangible assets that are acquired in a business combination are recorded at fair value on their acquisition dates and are amortized using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or on a straight-line basis over the estimated useful life of the intangible asset if the pattern of economic benefit cannot be reliably determined. Finite-lived intangible assets consist of university partner relationships and trade names. The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. There were no indicators that the carrying amount of the finite-lived intangible assets were impaired as of September 30, 2026. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets. If such intangible assets are not recoverable,
11
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
a potential impairment loss is recognized to the extent the carrying amounts of the assets exceed the fair value of the assets.
Share-Based Compensation
The Company measures and recognizes compensation expense for share-based payment awards made to employees and directors. The fair value of the Company’s restricted stock awards is based on the market price of its common stock on the date of grant. Stock-based compensation expense related to restricted stock grants is expensed over the vesting period using the straight-line method for Company employees and the Company’s board of directors (the “Board of Directors”). The Company recognizes forfeitures as they occur.
Fair Value of Financial Instruments
The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and benefits and accrued liabilities approximate their fair value based on the liquidity or the short-term maturities of these instruments.
The fair value of investments was determined using Level 1 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets. The unit of account used for valuation is the individual underlying security. The basis for fair value measurements for each level is described below, with Level 1 having the highest priority.
-Level 1 – inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
-Level 2 – inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in non-active markets; and model-derived valuations whose inputs are observable or whose significant valuation drivers are observable.
-Level 3 – unobservable inputs that are not corroborated by market data.
Investments are comprised of corporate bonds, agency bonds, treasury bills and commercial paper.
Commitments and Contingencies
The Company accrues for contingent obligations when it is probable that a liability has been incurred and the amount is reasonably estimable. When the Company becomes aware of a claim or potential claim, the likelihood of any loss exposure is assessed. If it is probable that a loss will result and the amount of the loss is estimable, the Company records a liability for the estimated loss. If the loss is not probable or the amount of the potential loss is not estimable, the Company will disclose the claim if the likelihood of a potential loss is reasonably possible and the amount of the potential loss could be material. Estimates that are particularly sensitive to future changes include tax, legal, and other regulatory matters, which are subject to change as events evolve, and as additional information becomes available during the administrative and litigation process. The Company expenses legal fees as incurred.
Revenue Recognition
The Company generates all of its revenue through services agreements with its university partners (“Services Agreements”), pursuant to which the Company provides integrated technology and academic services, marketing and communication services, and back-office services to its university partners in return for a percentage of tuition and fee revenue. Effective July 1, 2026, as a result of the Amended MSA with GCU, service revenue is now earned on only tuition and academic-related fees.
The Services Agreements have initial terms ranging from
12
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
satisfaction of the performance obligation and can be tied to the time elapsed which is consumed evenly over the service period and is a direct measurement of the value provided to our partners. The service fees received from our partners over the term of the agreement are variable in nature in that they are dependent upon the number of students attending the university partner’s program and revenues generated from those students during the service period. Due to the variable nature of the consideration over the life of the service arrangement, the Company considered forming an expectation of the variable consideration to be received over the service life of this one performance obligation. However, since the performance obligation represents a series of distinct services, the Company recognizes the variable consideration that becomes known and billable because these fees relate to the distinct service period in which the fees are earned. The Company meets the criteria in the standard and exercises the practical expedient to not disclose the aggregate amount of the transaction price allocated to the single performance obligation that is unsatisfied as of the end of the reporting period. The Company does not disclose the value of unsatisfied performance obligations because the directly allocable variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation. The service fees are calculated and settled per the terms of the Services Agreements and result in a settlement duration of less than one year for all partners. There are no refunds or return rights under the Services Agreements.
The Company’s receivables represent unconditional rights to consideration from our Services Agreements with our university partners. Accounts receivable, net is stated at net realizable value and contains billed and unbilled revenue. The Company utilizes the allowance method to provide for doubtful accounts based on its evaluation of the expected credit losses. There have been
For our partners with unbilled revenue, revenue recognition occurs in advance of billings. Billings for some university partners do not occur until after the service period has commenced and final enrollment information is available. Given that the Fall semester ends just prior to December 31 of each year, unbilled revenue is low at year end (whereas a semester is ongoing at the end of each other fiscal quarter, and unbilled revenue is thus higher at the end of our first three quarters). Our unbilled revenue of $
Allowance for Credit Losses
The Company records its accounts receivable at the net amount expected to be collected. Our accounts receivable are derived through education services provided to university partners. The Company maintains an allowance for credit losses resulting from our university partners not making payments. The Company determines the adequacy of the allowance by periodically evaluating each university partner’s balance, considering their financial condition and credit history, and considering current and forecasted economic conditions. Bad debt expense is recorded as a technology and academic services expense in the consolidated income statements. The Company monitors the impact of other factors on expected credit losses.
Technology and Academic Services
Technology and academic services consist primarily of costs related to ongoing maintenance of educational infrastructure, including online course delivery and management, student records, assessment, customer relations management and other internal administrative systems. This also includes costs to provide support for content development, faculty training, development and other faculty support, technology support, rent and occupancy costs for university partners’ off-campus classroom and laboratory sites, and assistance with state compliance. This expense category includes salaries, benefits and share-based compensation, information technology costs, amortization of content
13
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
development costs and other costs associated with these support services. This category also includes an allocation of depreciation, amortization, and occupancy costs attributable to the provision of certain services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations.
Counseling Services and Support
Counseling services and support consist primarily of costs including team-based counseling and other support to prospective and current students as well as financial aid processing. This expense category includes salaries, benefits and share-based compensation, and other costs such as dues, fees and subscriptions and travel costs. This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of certain services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations.
Marketing and Communication
Marketing and communication include lead acquisition, digital communication strategies, brand identity advertising, media planning and strategy, video, data science and analysis, marketing to potential students and other promotional and communication services. This expense category includes salaries, benefits and share-based compensation for marketing and communication personnel, brand advertising, marketing leads and other promotional and communication expenses. This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of certain services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations. Advertising costs are expensed as incurred.
General and Administrative
General and administrative expenses include salaries, benefits and share-based compensation of employees engaged in corporate management, finance, human resources, compliance, and other corporate functions. This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of these services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations.
Insurance/Self-Insurance
The Company uses a combination of insurance and self-insurance for a number of risks, including claims related to employee healthcare, workers’ compensation, general liability and business interruption. Liabilities associated with these risks are estimated based on, among other things, historical claims experience, severity factors and other actuarial assumptions. The Company’s loss exposure related to self-insurance is limited by stop loss coverage on a per occurrence and aggregate basis. The Company regularly analyzes its reserves for incurred but not reported claims, and for reported but not paid claims related to self-funded insurance programs. While the Company believes reserves are adequate, significant judgment is involved in assessing these reserves such as assessing historical paid claims, average lags between the claims’ incurred date, reported dates and paid dates, and the frequency and severity of claims. There may be differences between actual settlement amounts and recorded reserves and any resulting adjustments are included in expense once a probable amount is known.
Concentration of Credit Risk
The Company believes the credit risk related to cash equivalents and investments is limited due to its adherence to an investment policy that requires investments to have a minimum BBB rating, depending on the type of security, by at least
14
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
of the nine-month periods ended September 30, 2026 and 2025, subjects us to the risk that declines in our customer’s operations would result in a sustained reduction in service revenue for the Company.
Segment Information
The Company operates as a single education services company using a core infrastructure that serves the curriculum and educational delivery needs of its university partners. The Company’s Chief Executive Officer (the “Chief Operating Decision Maker” or “CODM”) manages the Company’s operations as a whole and no expense or operating income information is generated or evaluated on any component level other than consolidated net income.
The education services segment generates revenue through Service Agreements with its university partners, pursuant to which the Company provides integrated technology and academic services, marketing and communication services, and back-office services to its university partners in return for a percentage of tuition and fee revenue.
The accounting policies of the education services segment are the same as those described in the summary of significant accounting policies. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. The CODM uses consolidated net income to monitor budget versus actual results, which is used to evaluate headcount and compensation decisions.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. ASU No. 2024-03 does not change or remove existing expense disclosure requirements but requires disaggregated disclosures about certain expense categories and captions, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. ASU No. 2024-03 will become effective for us in fiscal 2027 and in the first quarter of fiscal 2028 for interim reporting. Retrospective application is permitted. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial condition, results of operations or statements of cash flows.
In September 2025, the FASB issued ASU 2025-06, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40)”. ASU 2025-06 removes all references to project stages throughout ASC 350-40 and clarifies the applicable threshold to begin capitalizing costs. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. Adoption of this ASU should be applied using a prospective transition approach, a modified transition approach based on project status or a retrospective transition approach. The Company is currently evaluating the impact of this new standard on our financial statements and disclosures.
The Company has determined that no other recent accounting pronouncements apply to its operations or could otherwise have a material impact on its consolidated financial statements.
3. Investments
As of September 30, 2026 the Company had investments of $
| | As of September 30, 2026 | ||||||||||
| | | | | Gross | | Gross | | Estimated | |||
| | Amortized | | Unrealized | | Unrealized | | Fair | ||||
| | Cost | | Gains | | (Losses) | | Value | ||||
Corporate bonds | | $ | | | $ | | | $ | ( | | $ | |
US Government bonds | | | | | | — | | | ( | | | |
Treasury bills | | | | | | — | | | — | | | |
Agency bonds | | | | | | — | | | ( | | | |
Total investments | | $ | | | $ | | | $ | ( | | $ | |
For the nine months ended September 30, 2026 and 2025, the net unrealized gains and (losses) were ($
15
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
sheets. The Company estimates the lifetime expected credit losses for all available-for-sale debt securities in an unrealized loss position. If our assessment indicates that an expected credit loss exists, we determine the portion of the unrealized loss attributable to credit deterioration and record a reserve for the expected credit loss in the allowance for credit losses in technology and academic services in our consolidated income statements. Based on the nature of securities there is no allowance recorded for available-for-sale debt securities.
Available-for-sale securities maturing as of December 31: | | | |
2026 | | $ | |
2027 | | | |
2028 | | | |
2029 | | | |
| | $ | |
4. Net Income Per Common Share
Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the assumed conversion of all potentially dilutive securities, consisting of restricted stock awards, for which the estimated fair value exceeds the exercise price, less shares which could have been purchased with the related proceeds, unless anti-dilutive. For employee equity awards, repurchased shares are also included for any unearned compensation adjusted for tax. The table below reflects the calculation of the weighted average number of common shares outstanding, on an as if converted basis, used in computing basic and diluted earnings per common share.
| | Three Months Ended | | Nine Months Ended | ||||
| | September 30, | | September 30, | ||||
|
| 2026 | | 2025 | | 2026 | | 2025 |
Denominator: |
| |
| |
| |
| |
Basic weighted average shares outstanding |
| |
| |
| |
| |
Effect of dilutive stock options and restricted stock |
| |
| |
| |
| |
Diluted weighted average shares outstanding |
| |
| |
| |
| |
Diluted weighted average shares outstanding excludes the incremental effect of unvested restricted stock in accordance with the treasury stock method. For the three-month periods ended September 30, 2026 and 2025, approximately
5. Property and Equipment
Property and equipment consist of the following:
|
| September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
Land | | $ | | | $ | |
Land improvements | |
| | |
| |
Buildings | |
| | |
| |
Buildings and leasehold improvements | |
| | |
| |
Computer equipment | |
| | |
| |
Furniture, fixtures and equipment | |
| | |
| |
Internally developed software | |
| | |
| |
Construction in progress | |
| | |
| |
| |
| | |
| |
Less accumulated depreciation and amortization | |
| ( | |
| ( |
Property and equipment, net | | $ | | | $ | |
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Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
6. Amortizable Intangible Assets
Identified intangible assets of $
Amortizable intangible assets consist of the following as of:
| September 30, 2026 | |||||||||
| Estimated | | Gross | | | | | Net | ||
| Average Useful | | Carrying | | Accumulated | | Carrying | |||
| Life (in years) | | Amount | | Amortization | | Amount | |||
University partner relationships | | $ | | | $ | ( | | $ | | |
Trade names | | | | | | ( | |
| — | |
Total amortizable intangible assets, net | | | $ | | | $ | ( | | $ | |
Estimated amortization expense for university partner relationships and trade names for the years ending December 31:
2026 | | $ | |
2027 | |
| |
2028 | | | |
2029 | | | |
2030 | | | |
Thereafter | |
| |
| | $ | |
7. Revolving Credit Facility
On September 28, 2026, the Company entered into a Revolving Credit Facility Credit Agreement, dated as of September 28, 2026 (the “Credit Agreement”), among the Company, as borrower, Orbis Education Services, LLC, a wholly owned subsidiary of GCE (“Orbis Education”), as guarantor, the lenders party thereto, and Zions Bancorporation, N.A. dba National Bank of Arizona, as administrative agent and lead arranger (the “Administrative Agent”). The Credit Agreement provides for a $
The Company intends to use borrowings under the Revolving Credit Facility primarily to fund repurchases of its common stock under its board-approved stock repurchase program, as well as for other general corporate purposes. All borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including the absence of a default and the accuracy of representations and warranties.
Under the Credit Agreement, the Company may request incremental revolving credit commitments in an aggregate amount of up to $
Loans under the Revolving Credit Facility bear interest at a rate per annum equal to one-month Term (subject to a
17
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
The obligations under the Credit Agreement are guaranteed by each of the Company’s direct and indirect material subsidiaries (other than excluded subsidiaries), which currently consists solely of Orbis Education, pursuant to a Guaranty Agreement, dated as of September 28, 2026 (the “Guaranty Agreement”). The obligations under the Credit Agreement and the Guaranty Agreement are secured by liens on substantially all of the personal property of the Company and the guarantor pursuant to a Security Agreement, dated as of September 28, 2026 (the “Security Agreement”), a Pledge Agreement, dated as of September 28, 2026 (the “Pledge Agreement”), pursuant to which the Company and the guarantor pledged the equity interests of their subsidiaries as described therein, and an intellectual property security agreement, in each case in favor of the Administrative Agent for the benefit of the secured parties.
The Credit Agreement contains customary affirmative and negative covenants that restrict the Company’s ability to incur additional debt, make certain investments or pay dividends and required the Company to maintain specified financial ratios. As of September 30, 2026, the Company is in compliance with all covenants and has
8. Leases
The Company has operating leases for off-campus classroom and laboratory sites, office space, office equipment, and optical fiber communication lines. These leases have remaining lease terms that range from
As of September 30, 2026, the Company had $
Future payment obligations with respect to the Company’s operating leases, which were existing at September 30, 2026, by year and in the aggregate, are as follows:
Year Ending December 31, | | Amount | |
2026 | | $ | |
2027 | | | |
2028 | | | |
2029 | | | |
2030 | | | |
Thereafter | | | |
Total lease payments | | $ | |
Less interest | | | |
Present value of lease liabilities | | $ | |
9. Commitments and Contingencies
Legal Matters
From time to time, the Company is a party to various lawsuits, claims, and other legal proceedings that arise in the ordinary course of business, some of which are covered by insurance. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company records a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the specific claim if the
18
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
likelihood of a potential loss is reasonably possible, and the amount involved could be material. With respect to the majority of pending litigation matters, the Company’s ultimate legal and financial responsibility, if any, cannot be estimated with certainty and, in most cases, any potential losses related to those matters are not considered probable.
Upon resolution of any pending legal matters, the Company may incur charges in excess of presently established reserves. Management does not believe that any such charges would, individually or in the aggregate, have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
Pending Litigation Matters
Matters Related to GCU Graduate Program Disclosures and Related Matters. The Company is a party to several matters alleging that, in the performance of its marketing services provided on behalf of GCU, it made false or misleading representations regarding the time to complete and the costs associated with and/or accreditation issues related to certain GCU graduate programs. These matters include:
| ● | Smith and Wang v. Grand Canyon Education, Inc. This putative class action was filed in June 2024 in the United States District Court for the District of Arizona and asserts claims under the federal RICO statute as well as various claims for violations of state law consumer protection statutes. On September 20, 2024, the plaintiffs amended their complaint, and on November 4, 2024, the Company moved to dismiss the case. The court granted in part and denied in part the motion to dismiss. Specifically, the court dismissed |
| ● | Ogdon v. Grand Canyon Education, Inc., et al. This putative class action was filed in May 2020 in federal district court in California and later transferred to the United States District Court for the District of Arizona. Plaintiffs assert claims for violations of California’s False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act; New York’s Business Law; Unjust Enrichment; and the federal RICO statute. The defendants include the Company along with our chief executive officer, chief operating officer, and chief financial officer. On March 3, 2026, the Court granted in part and denied in part the Company’s motion to dismiss the Second Amended Complaint, dismissing plaintiffs’ claims for injunctive relief and plaintiff Ogdon’s claim for money damages relating to forgiven loans, while allowing plaintiff Singh’s New York-law claims and the RICO claim to proceed. Discovery is ongoing, and Plaintiffs’ motion for class certification was filed on October 30, 2026. There is currently no trial date scheduled in this matter. |
| ● | Valerio, et al. v. Grand Canyon Education, Inc., et al. This suit was filed on December 24, 2024, in Maricopa County, Arizona Superior Court on behalf of nearly |
We believe that the Company’s representations made in marketing materials or by our employees regarding GCU’s graduate program requirements were at all times accurate and not false or misleading and thus did not violate applicable law. The Company intends to defend itself vigorously in each of these legal proceedings. The outcome of
19
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
these legal proceedings is uncertain at this point. At present, the Company cannot estimate a range of loss for these actions based on the information available to the Company. Accordingly, the Company has not accrued any liability associated with these actions.
10. Share-Based Compensation
Incentive Plan
Prior to June 2026, the Company made equity incentive grants under its 2017 Equity Incentive Plan (the “2017 Plan”). In April 2026, the Board of Directors of the Company approved, and at the Company’s 2026 annual meeting of stockholders held on June 10, 2026, the Company’s stockholders adopted, a 2026 Equity Incentive Plan (the “2026 Plan”). All future grants of equity incentives will be made from the 2026 Plan. As of September 30, 2026,
Restricted Stock
During the nine months ended September 30, 2026, the Company granted
A summary of the activity related to restricted stock granted under the 2017 Plan and the 2026 Plan since December 31, 2025 is as follows:
| | | | Weighted Average | |
| | Total | | Grant Date | |
| | Shares | | Fair Value per Share | |
Outstanding as of December 31, 2025 |
| | | $ | |
Granted |
| | | $ | |
Vested |
| ( | | $ | |
Forfeited, canceled or expired |
| ( | | $ | |
Outstanding as of September 30, 2026 |
| | | $ | |
Share-based Compensation Expense
The table below outlines share-based compensation expense for the nine months ended September 30, 2026 and 2025 related to restricted stock granted:
| 2026 | | 2025 | |||
Technology and academic services | | $ | | | $ | |
Counseling services and support | |
| | |
| |
Marketing and communication | |
| | |
| |
General and administrative | |
| | |
| |
Share-based compensation expense included in operating expenses | | $ | | | $ | |
Tax effect of share-based compensation | |
| ( | |
| ( |
Share-based compensation expense, net of tax | | $ | | | $ | |
20
Grand Canyon Education, Inc.
Notes to Consolidated Financial Statements
(In thousands, except per share data)
11. Treasury Stock
On October 28, 2026 the Board of Directors approved a $
During the nine months ended September 30, 2026 the Company repurchased
21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes that appear elsewhere in this report.
Forward-Looking Statements
This Quarterly Report on Form 10-Q, including Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains certain “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 (the “Exchange Act”). These forward-looking statements include, without limitation, statements regarding: proposed new programs; statements as to whether regulatory developments or other matters may or may not have a material adverse effect on our financial position, results of operations, or liquidity; statements concerning projections, predictions, expectations, estimates, or forecasts as to our business, financial and operational results, and future economic performance; and statements of 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. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management.
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:
| ● | 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; |
| ● | the occurrence of any event, change or other circumstance that could give rise to the termination of any of the key university partner agreements; |
| ● | 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; |
| ● | our failure to comply with the extensive regulatory framework applicable to us either directly as a third-party service provider or indirectly through our university partners, including Title IV of the Higher Education Act and the regulations thereunder, state laws and regulatory requirements, and accrediting commission requirements, and the results of related legal and regulatory actions that arise from such failures; |
| ● | the harm to our business, results of operations, and financial condition, and harm to our university partners resulting from epidemics, pandemics, or public health crises; |
| ● | the harm to our business and our ability to attract and retain students resulting from capacity constraints, system disruptions, or security breaches in our online computer networks and phone systems; |
| ● | the ability of our university partners’ students to obtain federal Title IV funds, state financial aid, and private financing; |
| ● | 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, affecting us or other companies in the education services sector; |
| ● | risks associated with changes in applicable federal and state laws and regulations and accrediting commission standards, including pending rulemaking by the United States Department of Education applicable to us directly or indirectly through our university partners; |
22
| ● | competition from other education service companies in our geographic region and market sector, including competition for students, qualified executives and other personnel; |
| ● | our expected tax payments and tax rate; |
| ● | our ability to hire and train new employees, and develop and train existing employees; |
| ● | the pace of growth of our university partners’ enrollment and its effect on the pace of our own growth; |
| ● | fluctuations in our revenues due to seasonality; |
| ● | our ability, on behalf of our university partners, to convert prospective students to enrolled students and to retain active students to graduation; |
| ● | our success in updating and expanding the content of existing programs and developing new programs in a cost-effective manner or on a timely basis for our university partners; |
| ● | risks associated with the competitive environment for marketing the programs of our university partners; |
| ● | failure on our part to keep up with advances in technology that could enhance the experience for our university partners’ students; |
| ● | our ability to manage future growth effectively; |
| ● | the impact of any natural disasters or public health emergencies; and |
| ● | general adverse economic conditions or other developments that affect the job prospects of our university partners’ students. |
Additional factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those described in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K (the “2025 Form 10-K”) for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on February 18, 2026, and as updated in our subsequent reports filed with the SEC, including any updates found in Part II, Item 1A of this Quarterly Report on Form 10-Q or our other reports on Form 10-Q. 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.
Executive Overview
Grand Canyon Education, Inc. (together with its subsidiaries, the “Company” or “GCE”) is a publicly traded education services company dedicated to serving colleges and universities. GCE has developed significant technological solutions, infrastructure and operational processes to provide services to these institutions on a large scale. GCE’s most significant university partner is Grand Canyon University (“GCU”), a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across twelve colleges both online and on ground at its campus in Phoenix, Arizona, and at 12 off-campus classroom and laboratory sites.
We also provide education services to numerous university partners across the United States. In the healthcare field, we work in partnership with a number of top universities and healthcare networks, offering healthcare-related academic programs at off-campus classroom and laboratory sites located near healthcare providers and developing high-quality, career-ready graduates who enter the workforce ready to meet the demands of the healthcare industry. In addition, we have provided certain services to a university partner to assist them in expanding their online graduate programs. As of September 30, 2026, GCE provides education services to 20 university partners across the United States.
We plan to continue to add additional university partners and to introduce additional programs with both our existing partners and with new partners. We may engage with both new and existing university partners to offer healthcare programs, online only or hybrid programs, or, as is the case for our most significant partner, GCU, both
23
healthcare and other programs. We do disclose significant information for GCU, such as enrollments, due to its size in comparison to our other university partners.
Critical Accounting Policies and Estimates
Our critical accounting policies and estimates are disclosed in the 2025 Form 10-K for the fiscal year ended December 31, 2025. During the nine months ended September 30, 2026, there were no material changes in our critical accounting policies and estimates.
Results of Operations
The following table sets forth certain income statement data as a percentage of revenue for each of the periods indicated. Amortization of intangible assets has been excluded from the table below:
| | Three Months Ended | | | Nine Months Ended | | | ||||
| | September 30, | | | September 30, | | | ||||
| | 2026 | | 2025 | | | 2026 | | 2025 | | |
Costs and expenses |
| |
| |
|
| |
| |
|
|
Technology and academic services |
| 16.1 | % | 17.2 | % |
| 15.9 | % | 16.3 | % |
|
Counseling services and support |
| 33.0 |
| 32.3 |
|
| 31.9 |
| 31.9 |
|
|
Marketing and communication |
| 24.5 |
| 22.6 |
|
| 22.5 |
| 22.0 |
|
|
General and administrative |
| 6.3 |
| 5.8 |
|
| 4.4 |
| 4.6 |
|
|
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Service revenue. Our service revenue for the three months ended September 30, 2026 was $267.3 million, an increase of $6.2 million, or 2.4%, as compared to service revenue of $261.1 million for the three months ended September 30, 2025. The increase year over year in service revenue was primarily due to an increase in university partner enrollments of 5.2% to 145,270 at September 30, 2026 as compared to 138,073 at September 30, 2025. GCU enrollments increased to 139,170 at September 30, 2026, an increase of 5.1% over enrollments at September 30, 2025. University partner enrollments at our off-campus classroom and laboratory sites were 7,780, an increase of 12.6% over enrollments at September 30, 2025, which includes 1,680 and 1,325 GCU students at September 30, 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 14.1% between years. Revenue from GCU, our largest university partner, for the three months ended September 30, 2026, was earned on tuition and academic-related fees under the Amended MSA, whereas revenue for the three months ended September 30, 2025, was earned under the Original MSA and included, in addition to tuition and academic-related fees, the agreed percentage of ancillary fees related to student housing, food service, athletic ticket sales, arena events, hotel, golf course and apparel operations. Revenue per student slightly decreased between years primarily due to six fewer days of revenue for ground traditional students based on the start date of the Fall semester, resulting in a shift of revenue from the third quarter to the fourth quarter in 2026 which had a $7.5 million impact. Also, we saw 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. These decreases were offset by 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.
We opened two new sites in the nine months ended September 30, 2026 and closed one site in which we stopped recruiting new students in 2025, thus the total number of sites were 48 at September 30, 2026. Enrollments for GCU ground students were 23,650 at September 30, 2026, down 4.1% from 24,671 at September 30, 2025. GCU online enrollments were 115,520 at September 30, 2026, up from 107,815 at September 30, 2025, an increase of 7.1% between years.
Technology and academic services. Our technology and academic services expenses for the three months ended September 30, 2026 were $43.1 million, a decrease of $1.8 million, or 4.1%, as compared to technology and academic services expenses of $44.9 million for the three months ended September 30, 2025. This decrease was primarily due to decreases in other technology and academic costs of $3.4 million, as a result of the Amended MSA that eliminated academic reimbursement costs. This decrease was partially offset by increases in employee compensation and related
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expenses, including share-based compensation and benefit costs and in occupancy and depreciation costs of $0.8 million and $0.8 million, respectively. The increase in employee compensation and related expenses is primarily due to increased headcount to support our 20 university partners and their increased enrollment growth, tenure-based salary adjustments and a significant year-over-year increase in benefit costs. The increases in occupancy and depreciation were primarily due to the costs associated with the increased enrollment growth at our off-campus classroom and laboratory sites to support our 20 university partners. Our technology and academic services expenses as a percentage of revenue decreased by 1.1% to 16.1% for the three months ended September 30, 2026, from 17.2% for the three months ended September 30, 2025. This decrease was primarily due to our ability to leverage our technology and academic service expenses across an increasing revenue base and the elimination of the academic reimbursement costs due to the Amended MSA. We anticipate that technology and academic services expenses will increase in the future as we open more off-site classroom and laboratory sites and technology costs continue to grow, partially offset by a decrease in curriculum cost reimbursements due to the Amended MSA, and these costs as a percentage of revenue could increase in the future.
Counseling services and support. Our counseling services and support expenses for the three months ended September 30, 2026 were $88.3 million, an increase of $3.9 million, or 4.7%, as compared to counseling services and support expenses of $84.4 million for the three months ended September 30, 2025. This increase was primarily attributable to increases in employee compensation and related expenses including share-based compensation and benefits and in occupancy and depreciation costs of $3.6 million and $0.4 million, respectively, partially offset by a decrease in other counseling services and support expenses of $0.1 million. The increases in employee compensation including share-based compensation and benefits were primarily due to increased headcount to support our university partners, and their planned increases in enrollment, tenure-based salary adjustments and a significant year over year increase in benefit costs. The increase in occupancy and depreciation is primarily related to the increased headcount and continued enhancements to technology infrastructure and internal-use software development for employees that service students. The decrease in other counseling services and support expenses is primarily the result of lower travel costs to service our 20 university partners. Our counseling services and support expenses as a percentage of revenue increased 0.7% to 33.0% for the three months ended September 30, 2026, from 32.3% for the three months ended September 30, 2025 primarily due to our ability to leverage our counseling services and support expenses across an increasing revenue base offset by the increased costs described above. We anticipate that counseling services and support expense will increase in the future as we continue to invest to meet our partners’ needs and these costs as a percentage of revenue could increase in the future.
Marketing and communication. Our marketing and communication expenses for the three months ended September 30, 2026 were $65.5 million, an increase of $6.4 million, or 10.7%, as compared to marketing and communication expenses of $59.1 million for the three months ended September 30, 2025. This increase was primarily attributable to the increased spend to market our university partners’ programs and due to the marketing of new locations which resulted in increased advertising of $6.2 million, increased employee compensation, including share-based compensation and benefits of $0.1 million and increased occupancy and depreciation expense of $0.1 million. Our marketing and communication expenses as a percentage of revenue increased by 1.9% to 24.5% for the three months ended September 30, 2026, from 22.6% for the three months ended September 30, 2025. We anticipate that marketing and communication expenses will increase in the future as we continue to invest to meet our partners’ needs and these costs as a percentage of revenue could increase in the future.
General and administrative. Our general and administrative expenses for the three months ended September 30, 2026 were $16.9 million, an increase of $1.8 million, or 11.7%, as compared to general and administrative expenses of $15.1 million for the three months ended September 30, 2025. This increase was primarily attributable to an increase in non-recurring costs, in professional fees and in employee compensation, including share-based compensation and benefits of $1.1 million, $0.5 million and $0.3 million, respectively. These increases were partially offset by decreases in other administrative expenses of $0.1 million. Our general and administrative expenses as a percentage of revenue increased by 0.5% to 6.3% for the three months ended September 30, 2026, from 5.8% for the three months ended September 30, 2025, primarily due to the increases in non-recurring costs and professional fees, partially offset by our ability to leverage our general and administrative expenses across an increasing revenue base. General and administrative expenses could increase in the future and these costs as a percentage of revenue could increase in the future.
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Litigation settlement. A litigation settlement of $35.0 million was recorded in the three months ended September 30, 2025 related to the settlement of the qui tam lawsuit.
Lease termination, impairment and other. We incurred $2.4 million in lease termination and impairment charges in the third quarter of 2025 related to leases. In the third quarter of 2025, we agreed to pay $1.3 million for our Indiana office space to early terminate our lease effective in June 2027. We also entered into a sublease of that space for the period from January 2026 to June 2027 and entered into a new lease for a much smaller space effective January 2026. Additionally, an impairment was recorded in the amount of $1.1 million in the three months ended September 30, 2025 for the two off-campus classroom and laboratory sites that were closed during the quarter.
Amortization of intangible assets. Amortization of intangible assets for the three months ended September 30, 2026 and 2025 were $2.1 million for both periods. As a result of the Orbis Education acquisition in 2019, certain identifiable intangible assets were created (primarily customer relationships) that will be amortized over their expected lives.
Investment interest and other. Investment interest and other for the three months ended September 30, 2026 was $2.3 million, a decrease of $1.3 million, as compared to $3.6 million for the three months ended September 30, 2025 due to lower investment balances attributable to an increase in stock repurchases.
Income tax expense. Income tax expense for the three months ended September 30, 2026 was $10.7 million, an increase of $5.3 million, or 99.5%, as compared to income tax expense of $5.4 million for the three months ended September 30, 2025. The increase in income tax expense is due to the increase in income before taxes due to the litigation settlement in the third quarter of 2025, partially offset by a lower effective tax rate. Our effective tax rate was 20.0% during the three months ended September 30, 2026 compared to 24.9% during the three months ended September 30, 2025. The effective tax rate was favorably impacted by contributions in lieu of state income taxes of $5.0 million for both of the third quarters in 2026 and 2025. The higher effective tax rate in the third quarter of 2025 was due to the nondeductibility of the penalties associated with the litigation settlement.
Net income. Our net income for the three months ended September 30, 2026 was $43.0 million, an increase of $26.7 million, or 164.3% as compared to $16.3 million for the three months ended September 30, 2025, due to the factors discussed above.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Service revenue. Our service revenue for the nine months ended September 30, 2026 was $840.2 million, an increase of $42.2 million, or 5.3%, as compared to service revenue of $798.0 million for the nine months ended September 30, 2025. The increase year over year in service revenue was primarily due to an increase in university partner enrollments of 5.2% to 145,270 at September 30, 2026 as compared to 138,073 at September 30, 2025. GCU enrollments increased to 139,170 at September 30, 2026, an increase of 5.1% over enrollments at September 30, 2025. University partner enrollments at our off-campus classroom and laboratory sites were 7,780, an increase of 12.6% over enrollments at September 30, 2025, which includes 1,680 and 1,325 GCU students at September 30, 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 14.1% between years. Revenue from GCU, our largest university partner, for the nine months ended September 30, 2026 includes revenue for the 3 months ended September 30, 2026 earned under the Amended MSA including only tuition and academic-related fees plus revenue for the six months ended June 30, 2026 earned under the Original MSA including, in addition to tuition and academic-related fees, the agreed percentage of ancillary fees related to student housing, food service, athletic ticket sales, arena events, hotel, golf course and apparel operations. By contrast, service revenue for the nine months ended September 30, 2025 was entirely earned under the Original MSA. Revenue per student stayed flat between years primarily due to the service revenue per student for 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. This increase was offset by six fewer days of revenue for ground traditional students based on the start date of the Fall semester, resulting in a shift of revenue from the third quarter to the fourth quarter in 2026 which had a $7.5 million impact. We also experienced 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.
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We opened two new sites in the nine months ended September 30, 2026 and closed one site in which we stopped recruiting new students in 2025, thus the total number of sites were 48 at September 30, 2026. Enrollments for GCU ground students were 23,650 at September 30, 2026, down 4.1% from 24,671 at September 30, 2025. GCU online enrollments were 115,520 at September 30, 2026, up from 107,815 at September 30, 2025, an increase of 7.1% between years.
Technology and academic services. Our technology and academic services expenses for the nine months ended September 30, 2026 were $133.7 million, an increase of $4.0 million, or 3.1%, as compared to technology and academic services expenses of $129.7 million for the nine months ended September 30, 2025. This increase was primarily due to increases in employee compensation and related expenses, including share-based compensation and benefit costs, in occupancy and depreciation costs, and in subscription costs of $3.0 million, $2.1 million and $1.6 million, respectively. These increases were partially offset by decreases in other technology and academic expenses of $2.7 million, as a result of the Amended MSA that eliminated academic reimbursement costs. The increase in employee compensation and related expenses is primarily due to increased headcount to support our 20 university partners and their increased enrollment growth, tenure-based salary adjustments and a significant year-over-year increase in benefit costs. The increases in occupancy and depreciation and other technology costs were primarily due to the costs associated with the increased enrollment growth at our off-campus classroom and laboratory sites to support our 20 university partners as well as an increase in technology costs to our university partners. Our technology and academic services expenses as a percentage of revenue decreased by 0.4% to 15.9% for the nine months ended September 30, 2026, from 16.3% for the nine months ended September 30, 2025. The increases in employee compensation, occupancy and depreciation and technology costs were offset by our ability to leverage our technology and academic service expenses across an increasing revenue base and the elimination of academic reimbursement costs. We anticipate that technology and academic services expenses will increase in the future as we open more off-site classroom and laboratory sites and technology costs continue to grow, partially offset by a decrease in academic cost reimbursements due to the Amended MSA, and these costs as a percentage of revenue could increase in the future.
Counseling services and support. Our counseling services and support expenses for the nine months ended September 30, 2026 were $268.3 million, an increase of $14.0 million, or 5.5%, as compared to counseling services and support expenses of $254.3 million for the nine months ended September 30, 2025. This increase was primarily attributable to increases in employee compensation and related expenses including share-based compensation and benefits and in occupancy and depreciation costs of $13.0 million and $1.6 million, respectively, partially offset by a decrease in other counseling services and support expenses of $0.6 million. The increases in employee compensation including share-based compensation and benefits were primarily due to increased headcount to support our university partners, and their planned increases in enrollment, tenure-based salary adjustments and a significant year-over-year increase in benefit costs. The increase in occupancy and depreciation is primarily related to the increased headcount and continued enhancements to technology infrastructure and internal-use software development for employees that service students. The decrease in other counseling services and support expenses is primarily the result of lower travel costs to service our 20 university partners. Our counseling services and support expenses as a percentage of revenue stayed flat at 31.9% for both of the nine months ended September 30, 2026 and 2025 primarily due to our ability to leverage our counseling services and support expenses across an increasing revenue base partially offset by the increased costs discussed above. We anticipate that counseling services and support expense will increase in the future as we continue to invest to meet our partners’ needs and these costs as a percentage of revenue could increase in the future.
Marketing and communication. Our marketing and communication expenses for the nine months ended September 30, 2026 were $189.4 million, an increase of $13.9 million, or 7.9%, as compared to marketing and communication expenses of $175.5 million for the nine months ended September 30, 2025. This increase was primarily attributable to the increased spend to market our university partners’ programs and the marketing of new locations which resulted in increased advertising of $12.9 million, increased employee compensation, including share-based compensation and benefits of $0.7 million, increased occupancy and depreciation expense of $0.2 million and increased other communication expenses of $0.1 million. Our marketing and communication expenses as a percentage of revenue increased by 0.5% to 22.5% for the nine months ended September 30, 2026, from 22.0% for the nine months ended September 30, 2025. We anticipate that marketing and communication expenses will increase in the future as we continue to invest to meet our partners’ needs and these costs as a percentage of revenue could increase in the future.
General and administrative. Our general and administrative expenses for the nine months ended September 30, 2026 were $37.3 million, an increase of $0.4 million, or 1.1%, as compared to general and administrative expenses of
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$36.9 million for the nine months ended September 30, 2025. This increase was primarily attributable to an increase in non-recurring costs and in employee compensation, including share-based compensation and benefit costs of $1.1 million and $0.7 million, respectively. These increases were partially offset by a decrease in professional fees, in occupancy and depreciation expenses and in other administrative expenses of $0.8 million, $0.4 million and $0.2 million, respectively. The decrease in professional fees was primarily due to lower legal costs between years. Our general and administrative expenses as a percentage of revenue decreased by 0.2% to 4.4% for the nine months ended September 30, 2026, from 4.6% for the nine months ended September 30, 2025, primarily due to our ability to leverage our general and administrative expenses across an increasing revenue base and lower professional fees and occupancy costs. General and administrative expenses could increase in the future and these costs as a percentage of revenue could increase in the future.
Litigation settlement. A litigation settlement of $35.0 million was recorded in the nine months ended September 30, 2025 related to the settlement of the qui tam lawsuit.
Lease termination, impairment and other. We incurred $2.4 million in lease termination and impairment charges in the nine months ended September 30, 2025 related to leases. In the third quarter of 2025, we agreed to pay $1.3 million for our Indiana office space to early terminate our lease effective in June 2027. We also entered into a sublease of that space for the period from January 2026 to June 2027 and entered into a new lease for a much smaller space effective January 2026. Additionally, an impairment was recorded in the amount of $1.1 million in the nine months ended September 30, 2025 for the two off-campus classroom and laboratory sites that were closed during the quarter.
Amortization of intangible assets. Amortization of intangible assets for the nine months ended September 30, 2026 and 2025 were $6.3 million for both periods. As a result of the Orbis Education acquisition in 2019, certain identifiable intangible assets were created (primarily customer relationships) that will be amortized over their expected lives.
Investment interest and other. Investment interest and other for the nine months ended September 30, 2026 was $8.0 million, a decrease of $2.2 million, as compared to $10.2 million for the nine months ended September 30, 2025 due to lower returns and lower investment balances as a result of increased stock repurchases.
Income tax expense. Income tax expense for the nine months ended September 30, 2026 was $48.9 million, an increase of $10.3 million, or 26.5%, as compared to income tax expense of $38.6 million for the nine months ended September 30, 2025. The increase in income tax expense is due to the increase in income before taxes. Our effective tax rate was 22.9% during the nine months ended September 30, 2026 compared to 23.0% during the nine months ended September 30, 2025. The effective tax rate for both of the nine months ended September 30, 2026 and 2025 was favorably impacted by the contribution in lieu of state income taxes of $5.0 million. The effective tax rate stayed relatively flat year over year due to changes in state income taxes, an increase in taxable income and a decrease in excess tax benefits to $1.4 million in the nine months ended September 30, 2026 due to the decline in our stock price as compared to $2.7 million in the nine months ended September 30, 2025. 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. Our net income for the nine months ended September 30, 2026 was $164.2 million, an increase of $34.8 million, or 26.9% as compared to $129.4 million for the nine months ended September 30, 2025, due to the factors discussed above.
Seasonality
Our net revenue and operating results normally fluctuate as a result of seasonal variations in our business, principally due to changes in our university partners’ enrollment. Our partners’ enrollment varies as a result of new enrollments, graduations, and student attrition. Revenues in the Summer months (May through August) are lower primarily due to the majority of GCU’s traditional ground university students not attending courses during the Summer months, which affects our results for our second and third fiscal quarters. Since a significant amount of our costs are fixed, the lower revenue resulting from the decreased Summer enrollment has historically contributed to lower operating margins during those periods. Partially offsetting this Summer effect has been the sequential quarterly
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increase in enrollments that has occurred as a result of the traditional Fall school start. This increase in enrollments also has occurred in the first quarter, corresponding to calendar year matriculation. Thus, we experience higher net revenue in the fourth quarter due to its overlap with the semester encompassing the traditional Fall school start and in the first quarter due to its overlap with the first semester of the calendar year. A portion of our expenses do not vary proportionately with these fluctuations in service revenue, resulting in higher operating income in the first and fourth quarters relative to other quarters. We expect quarterly fluctuation in operating results to continue as a result of these seasonal patterns.
Liquidity and Capital Resources
| | As of September 30, | | As of December 31, | ||
(In thousands) | | 2026 | | 2025 | ||
Cash, cash equivalents and investments | | $ | 162,142 | | $ | 300,079 |
Overview
Our liquidity position, as measured by cash and cash equivalents and investments decreased by $137.9 million between December 31, 2025 and September 30, 2026, which was largely attributable to cash expended for share repurchases and capital expenditures exceeding our cash provided by operations during the nine months ended September 30, 2026.
Based on our current level of operations and anticipated growth, we believe that our cash flow from operations and other sources of liquidity, including cash and cash equivalents and investments, will provide adequate funds for ongoing operations, planned capital expenditures, and working capital requirements for at least the next 12 months. In addition, the Credit Agreement entered into on September 28, 2026 will provide additional liquidity to be used primarily for share repurchases and general corporate purposes. See Note 7 – Revolving Credit Facility, in Notes to Consolidated Financial Statements for further discussion.
Cash Flows from Operating Activities
| | Nine Months Ended September 30, | ||||
(In thousands) | | 2026 | | 2025 | ||
Net cash provided by operating activities | | $ | 171,589 | | $ | 143,006 |
The increase in cash generated from operating activities between the nine months ended September 30, 2025 and the nine months ended September 30, 2026 was primarily due to changes in working capital balances when adding back the litigation settlement to net income in 2025. Income tax receivable/payable amounts decreased by $9.6 million between December 31, 2025 and September 30, 2026 compared to the decrease of $30.6 million between December 31, 2024 and September 30, 2025, a $21.0 million increase year over year in cash provided by operating activities due to the increased taxable income. Accounts receivable increased $30.2 million between December 31, 2025 and September 30, 2026 compared to an increase of $39.1 million between December 31, 2024 and September 30, 2025, a $8.9 million increase year over year in cash provided by operating activities due to the timing of collections. Deferred income taxes increased $1.3 million between December 31, 2025 and September 30, 2026 compared to the increase of $13.5 million between December 31, 2024 and September 30, 2025, a $12.2 million decrease year over year in cash provided by operating activities due to the acceleration of certain tax deductions and the passage of the One Big Beautiful Bill Act on July 4, 2025. We define working capital as the assets and liabilities, other than cash, generated through the Company’s primary operating activities. Changes in these balances are included in the changes in assets and liabilities presented in the consolidated statement of cash flows.
Cash Flows from Investing Activities
| | Nine Months Ended September 30, | ||||
(In thousands) | | 2026 | | 2025 | ||
Net cash provided by (used in) investing activities | | $ | 54,088 | | $ | (205,615) |
Investing activities provided $54.1 million of cash in the nine months ended September 30, 2026 compared to consuming $205.6 million of cash in the nine months ended September 30, 2025.
Cash used in investing activities includes investment activity and the change between years in net investing activities is primarily due to investment activity. In the nine months ended September 30, 2026, the proceeds from the sale of investments, net of purchases of available-for-sale securities were $83.8 million. In the nine months ended
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September 30, 2025, the purchase of available-for-sale securities, net of proceeds from the sale of investments were $177.8 million.
In the first nine months of 2026 and 2025 cash used in investing activities also included capital expenditures totaling $29.6 million and $27.2 million, respectively. Capital expenditures for both periods primarily consisted of leasehold improvements and equipment for new off-campus classroom and laboratory sites, as well as purchases of computer equipment, internal use software projects and furniture and equipment to support our increasing employee headcount. The Company incurs upfront expenses and capital expenditures prior to an off-campus classroom and laboratory site being opened. The Company intends to continue to spend approximately $30.0 million to $35.0 million per year for capital expenditures.
Cash Flows from Financing Activities
| | Nine Months Ended September 30, | ||||
(In thousands) | | 2026 | | 2025 | ||
Net cash used in financing activities | | $ | (278,679) | | $ | (164,730) |
Financing activities consumed $278.7 million of cash in the nine months ended September 30, 2026 compared to $164.7 million in the nine months ended September 30, 2025.
During the nine months ended September 30, 2026 and 2025, $270.8 million and $155.2 million, respectively was used to purchase treasury stock in accordance with GCE’s share repurchase program. In 2026 and 2025, $7.5 million and $9.5 million, respectively, of cash was utilized to purchase common shares withheld in lieu of income taxes resulting from the vesting of restricted share awards. The Company intends to continue using a significant portion of its cash flows from operations to repurchase its shares.
Share Repurchase Program
On October 28, 2026 the Board of Directors approved a $355.0 million increase under its existing stock repurchase program reflecting an aggregate authorization for share repurchases since the initiation of the program of up to $2.9 billion. The expiration date on the current repurchase authorization by our Board of Directors is March 1, 2028. Repurchases occur at the Company’s discretion and the Company may modify, suspend or discontinue the repurchase authorization at any time.
Under our share repurchase authorization, we may purchase shares in the open market or in privately negotiated transactions, pursuant to the applicable SEC rules. The amount and timing of future share repurchases, if any, will be made as market and business conditions warrant.
We repurchased 1,700,605 shares of common stock in the nine months ended September 30, 2026. At September 30, 2026, there remains $73.5 million available under our share repurchase authorization (which authorization was increased to $428.5 million in October 2026).
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have had or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk. As of September 30, 2026, we have no derivative financial instruments or derivative commodity instruments. We invest cash in excess of current operating requirements in money market instruments, municipal and corporate bond portfolios or commercial paper at multiple financial institutions.
Interest rate risk. We manage interest rate risk by investing excess funds in cash equivalents, BBB or higher rated corporate bonds, commercial paper, agency bonds, municipal securities, asset backed securities, municipal bonds, and collateralized mortgage obligations bearing variable interest rates, which are tied to various market indices or individual bond coupon rates. Our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities before their maturity date that have declined in market value due to changes in interest rates. At September 30, 2026, a 10% increase or decrease in interest rates would not have a material impact on our future earnings, fair values, or cash flows.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and the Interim Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures are effective, as of September 30, 2026, in ensuring that material information relating to us required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in reports it files or submits under the Exchange Act is accumulated and communicated to management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting.
Based on an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (who is our principal executive officer) and our Interim Chief Financial Officer (who is our interim principal financial officer and principal accounting officer), there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding our material pending legal proceedings, see the section entitled Pending Litigation Matters within Note 9 – Commitments and Contingencies of our notes to consolidated financial statements included in Part I, Item 1 of this report, which section is incorporated by reference into this Part II, Item 1.
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed in the “Risk Factors” section of the 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
On October 28, 2026 the Board of Directors approved a $355.0 million increase under its existing stock repurchase program reflecting an aggregate authorization for share repurchases since the initiation of the program of up to $2.9 billion. The expiration date on the current repurchase authorization by our Board of Directors is March 1, 2028. Repurchases occur at the Company’s discretion and the Company may modify, suspend or discontinue the repurchase authorization at any time. Repurchases may be made in the open market or in privately negotiated transactions, pursuant to the applicable SEC rules. The amount and timing of future share repurchases, if any, will be made as market and business conditions warrant.
During the nine months ended September 30, 2026, 1,700,605 shares of common stock were repurchased by the Company. At September 30, 2026, there remains $73.5 million available under our share repurchase authorization (which authorization was increased to $428.5 million in October 2026).
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The following table sets forth our share repurchases of common stock and our share repurchases in lieu of taxes, which are not included in the repurchase plan totals as they were approved in conjunction with the restricted share awards, during each period in the third quarter of fiscal 2026:
| | | | | | | Total Number of | | Maximum Dollar | |
| | | | | | | Shares Purchased as | | Value of Shares | |
| | | | Average | | Part of Publicly | | That May Yet Be | ||
| | Total Number of | | Price Paid | | Announced | | Purchased Under | ||
Period | | Shares Purchased | | Per Share | | Program | | the Program | ||
Share Repurchases |
| |
| | |
| |
| | |
July 1, 2026 – July 31, 2026 |
| 195,690 | | $ | 145.88 |
| 195,690 | | $ | 120,100,000 |
August 1, 2026 – August 31, 2026 |
| 102,205 | | $ | 150.28 |
| 102,205 | | $ | 104,800,000 |
September 1, 2026 – September 30, 2026 |
| 206,813 | | $ | 151.03 |
| 206,813 | | $ | 73,500,000 |
Total |
| 504,708 | | $ | 148.88 |
| 504,708 | | $ | 73,500,000 |
Tax Withholdings |
| | |
| |
| | |
| |
July 1, 2026 – July 31, 2026 |
| — | | $ | — |
| — | | $ | — |
August 1, 2026 – August 31, 2026 |
| — | | $ | — |
| — | | $ | — |
September 1, 2026 – September 30, 2026 |
| — | | $ | — |
| — | | $ | — |
Total |
| — | | $ | — |
| — | | $ | — |
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
During the three months ended September 30, 2026, no director or officer of the Company
Item 6. Exhibits
(a) Exhibits
Number | | Description | | Method of Filing |
3.1 | | | Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed with the SEC on February 20, 2019. | |
| | | | |
3.2 | | | Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 29, 2014. | |
| | | | |
4.1 | | | Incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-1 filed with the SEC on September 29, 2008. | |
| | | | |
10.1 | | | Incorporated by reference to Exhibit 10.2 to the company’s Quarterly Report on Form 10-Q filed with the SEC on July 30, 2026. | |
| | | | |
10.2 | | | Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on October 1, 2026. | |
| | | | |
32
10.3 | | | Incorporated by reference to Exhibit 10.2 to the Form 8-K filed with the SEC on October 1, 2026. | |
| | | | |
10.4 | | | Incorporated by reference to Exhibit 10.3 to the Form 8-K filed with the SEC on October 1, 2026. | |
| | | | |
10.5 | | | Incorporated by reference to Exhibit 10.4 to the Form 8-K filed with the SEC on October 1, 2026. | |
| | | | |
10.6 | | | Filed herewith. | |
| | | | |
31.1 | | | Filed herewith. | |
| | | | |
31.2 | | | Filed herewith. | |
| | | | |
32.1 | | | Filed herewith. | |
| | | | |
32.2 | | | Filed herewith. | |
| | | | |
101 | | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in Inline XBRL: (i) Consolidated Income Statements, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements tagged as blocks of text and including detailed tags. | | Filed herewith. |
| | | | |
104 | | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in Inline XBRL (included as Exhibit 101). | | Filed herewith. |
* Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.
## Certain portions of this document have been redacted pursuant to Regulation S-K, Item 601(b)(10)(iv).
† Indicates a management contract or any compensatory plan, contract or arrangement.
†† This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. Section 1350 and is not being filed for purposes of Section 18 of the Exchange Act, and is not to be incorporated by reference into any filings of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
33
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.
| | GRAND CANYON EDUCATION, INC. | |
| | | |
Date: November 4, 2026 | | By: | /s/ Lori Browning |
| | Lori Browning | |
| | Interim Chief Financial Officer and Senior Vice President & Controller – Chief Accounting Officer | |
| | (Interim Principal Financial Officer and Principal Accounting Officer) | |
| | | |
34
Exhibit 10.6
SECOND AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
(Lori Browning)
This Second Amended and Restated Executive Employment Agreement (the “Agreement") is entered into on August 31, 2023, and is effective as of July 1, 2023 (the “Effective Date”), by and between Grand Canyon Education, Inc., a Delaware corporation (“Company”) and Lori Browning (“Executive”).
WHEREAS, Company and Executive are parties to an amended and restated executive employment agreement effective as of July 30, 2012, and effective July 1, 2020, (as amended, the “Original Agreement”), and Executive has been employed with Company since that time;
WHEREAS, Company and Executive desire to amend and restate the Original Agreement through the execution and delivery of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1
2
3
Notwithstanding Section 7.2(b), if Company determines, in its sole discretion, that the payment of the COBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, Company, in its sole discretion, may elect to instead pay Executive on the first day of each month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings (such amount, the “Special Severance Payment,” which shall be treated as part of the Severance Package), for the remainder of the COBRA Payment Period. Executive may, but is not obligated to, use such Special Severance Payment toward the cost of COBRA premiums. All other Company obligations to Executive will be automatically terminated and completely extinguished, but will be subject to the surviving provisions of this Agreement set forth in Section 14.8.
4
5
6
7
8
9
10
THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.
EXECUTIVE
Dated: September 8, 2023By: /s/ Lori Browning
Name:
Address:
GRAND CANYON EDUCATION, INC.
Dated: September 8, 2023By: /s/ Daniel E. Bachus
Name:Daniel E. Bachus
Title:Chief Financial Officer
Address:2600 West Camelback Road
Phoenix, Arizona 85017
11
Exhibit 31.1
CERTIFICATION PURSUANT TO RULES 13a-14(a) and 15d-14(a),
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Brian E. Mueller, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ending September 30, 2026 of Grand Canyon Education, Inc.;
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 fourth 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 4, 2026 | | /s/ Brian E. Mueller |
| | Brian E. Mueller |
| | Chief Executive Officer |
| | (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO RULES 13a-14(a) and 15d-14(a),
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lori Browning, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ending September 30, 2026 of Grand Canyon Education, Inc.;
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 fourth 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 4, 2026 | | /s/ Lori Browning |
| | Lori Browning |
| | Interim Chief Financial Officer and Senior Vice President & Controller – Chief Accounting Officer |
| | (Interim Principal Financial Officer and Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Grand Canyon Education, Inc. (the “Company”) for the quarter ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brian E. Mueller, Chief Executive Officer, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m or 78o); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: November 4, 2026 | | |
| | |
/s/ Brian E. Mueller | | |
Brian E. Mueller | | |
Chief Executive Officer (Principal Executive Officer) | | |
Exhibit 32.2
CERTIFICATION OF INTERIM CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Grand Canyon Education, Inc. (the “Company”) for the quarter ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lori Browning, Interim Chief Financial Officer and Senior Vice President & Controller of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m or 78o); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: November 4, 2026 | | |
| | |
/s/ Lori Browning | | |
Lori Browning | | |
Interim Chief Financial Officer and Senior Vice President & Controller – Chief Accounting Officer (Interim Principal Financial Officer and Principal Accounting Officer) | | |