third quarter 2026
Filed Nov 4, 2026Grand Canyon Education, Inc. Reports Third Quarter 2026 Results and Full Year Outlook 2026
Service revenue grew 2.4% and university partner enrollments increased 5.2%, while GAAP operating income and net income rose sharply from lower prior-year litigation-related charges. However, as adjusted net income, adjusted diluted income per share and Adjusted EBITDA declined year over year.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Service revenue, three months ended September 30GAAP | $267.3M | – | 2.4% |
| Operating income, three months ended September 30GAAP | $51.5M | – | 185.6% |
| Operating margin, three months ended September 30GAAP | 19.3% | – | – |
| Operating income excluding amortization, non-recurring costs and fixed asset disposals, three months ended September 30non-GAAP | $54.7M | – | – |
| Operating margin excluding amortization, non-recurring costs and fixed asset disposals, three months ended September 30non-GAAP | 20.5% | – | – |
| Income tax expense, three months ended September 30GAAP | $10.7M | – | 99.5% |
| Effective tax rate, three months ended September 30GAAP | 20.0% | – | – |
| Net income, three months ended September 30GAAP | $43M | – | 164.3% |
| As adjusted net income, third quarternon-GAAP | $45.6M | – | – |
| Diluted net income per share, third quarterGAAP | $1.67 | – | – |
| As adjusted diluted net income per share, third quarternon-GAAP | $1.77 | – | – |
| Adjusted EBITDA, third quarternon-GAAP | $73.5M | – | -3.2% |
| Service revenue, nine months ended September 30GAAP | $840.2M | – | 5.3% |
| Operating income, nine months ended September 30GAAP | $205.1M | – | 29.9% |
| Operating margin, nine months ended September 30GAAP | 24.4% | – | – |
| Net income, nine months ended September 30GAAP | $164.2M | – | 26.9% |
| As adjusted net income, nine months ended September 30non-GAAP | $170M | – | – |
| Diluted net income per share, nine months ended September 30GAAP | $6.25 | – | – |
| As adjusted diluted net income per share, nine months ended September 30non-GAAP | $6.47 | – | – |
| Adjusted EBITDA, nine months ended September 30non-GAAP | $257.5M | – | 5.0% |
| Net cash provided by operating activities, nine months ended September 30GAAP | $171.6M | – | – |
| Capital expenditures, nine months ended September 30GAAP | −$29.61M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Q4 2026 and Full Year 2026 outlook
- RevenueQ4 2026 service revenue of between $320.5 million and $321.5 million; Full Year 2026 service revenue of between $1,160.7 million and $1,161.7 million
- Tax rateQ4 2026 effective tax rate of 23.0%; Full Year 2026 effective tax rate of 23.0%
- NoteQ4 2026 operating margin of between 36.0% and 36.2%
- NoteQ4 2026 diluted EPS of between $3.57 and $3.61
- NoteQ4 2026 25.3 million diluted shares
- NoteQ4 2026 as adjusted, non-GAAP diluted income per share of between $3.63 and $3.67
- NoteFull Year 2026 operating margin of between 27.6% and 27.7%
- NoteFull Year 2026 diluted EPS between $9.81 and $9.85
- NoteFull Year 2026 26.0 million diluted shares
- NoteFull Year 2026 as adjusted, non-GAAP diluted income per share of between $10.09 and $10.13
Capital returns
- Repurchase of common shares and shares withheld in lieu of income taxes was $(278,327) for the nine months ended September 30, 2026, compared to $(164,730) for the nine months ended September 30, 2025.
- On October 28, 2026, the Board of Directors approved a $355.0 million increase under the existing stock repurchase program.
- Aggregate authorization for share repurchases since program inception was $2.9 billion.
- As of November 2, 2026, $394.5 million remained available under the current share repurchase authorization.
- The current repurchase authorization expires March 1, 2028.
- As of November 2, 2026, the Company had 25,510,517 shares of common stock outstanding.
What drove it
- University partner enrollments increased 5.2% to 145,270 at September 30, 2026, compared to 138,073 at September 30, 2025.
- GCU enrollments increased 5.1% to 139,170 at September 30, 2026.
- University partner enrollments at off-campus classroom and laboratory sites were 7,780, an increase of 12.6% over enrollments at September 30, 2025.
- Excluding sites that have been closed or are in teach out, total enrollments at off-campus classroom and laboratory sites increased 14.1% between years.
- 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.
- ABSN students at off-campus classroom and laboratory sites generated significantly higher service revenue per student than under the GCU agreement.
Concerns
- Revenue per student slightly decreased between years in the third quarter, including a $7.5 million impact from six fewer days of revenue for ground traditional students.
- GCU ground student enrollments were 23,650 at September 30, 2026, down 4.1% from 24,671 at September 30, 2025.
- Online revenue per student declined slightly year over year due to continued mix shift to students with a slightly lower net tuition rate.
- Third-quarter adjusted EBITDA decreased 3.2% to $73.5 million, and as adjusted diluted net income per share was $1.77 compared to $1.78.
- Third-quarter 2025 results included a litigation settlement of $35,000 and lease termination, impairment and other costs of $2,411.
What to watch
- Q4 2026 service revenue guidance of between $320.5 million and $321.5 million.
- Q4 2026 operating margin guidance of between 36.0% and 36.2%.
- The shift of revenue from the third quarter to the fourth quarter in 2026 associated with six fewer days of revenue for ground traditional students.
- Enrollment trends for GCU ground students, GCU online students and off-campus classroom and laboratory sites.
- Execution under the Amended MSA, under which GCU revenue for the three months ended September 30, 2026 was earned on tuition and academic-related fees.
- Use of the $394.5 million remaining repurchase authorization as of November 2, 2026.
Balance sheet and cash flow
- Unrestricted cash and cash equivalents and investments were $162.1 million at September 30, 2026, compared to $300.1 million at December 31, 2025.
- Cash and cash equivalents were $58,760 at September 30, 2026, compared to $111,762 at December 31, 2025.
- Investments were $103,382 at September 30, 2026, compared to $188,317 at December 31, 2025.
- Total assets were $894,491 at September 30, 2026, compared to $992,305 at December 31, 2025.
- Total liabilities were $255,089 at September 30, 2026, compared to $245,372 at December 31, 2025.
- Total stockholders' equity was $639,402 at September 30, 2026, compared to $746,933 at December 31, 2025.
- Net cash provided by operating activities was $171,589 for the nine months ended September 30, 2026, compared to $143,006 for the nine months ended September 30, 2025.
- Net cash provided by investing activities was $54,088 for the nine months ended September 30, 2026, compared to net cash used in investing activities of $(205,615) for the nine months ended September 30, 2025.
- Net cash used in financing activities was $(278,679) for the nine months ended September 30, 2026, compared to $(164,730) for the nine months ended September 30, 2025.
- Net decrease in cash and cash equivalents and restricted cash was $(53,002) for the nine months ended September 30, 2026, compared to $(227,339) for the nine months ended September 30, 2025.
Analysis
Third-quarter service revenue was $267.3 million, up 2.4% from $261.1 million. Growth reflected a 5.2% increase in university partner enrollments to 145,270. GCU online enrollments increased 7.1% to 115,520, while off-campus classroom and laboratory site enrollments increased 12.6% to 7,780. GCU ground enrollments declined 4.1% to 23,650.
Revenue growth was constrained by revenue per student. The Company cited six fewer days of revenue for ground traditional students due to the Fall semester start date, shifting revenue from the third quarter to the fourth quarter and having a $7.5 million impact. Management also cited a slight year-over-year decline in online revenue per student from continued mix shift to students with a slightly lower net tuition rate. Higher service revenue per ABSN student at off-campus sites partly offset these factors.
GAAP profitability increased sharply from the prior-year period, with operating income of $51.5 million versus $18.0 million, operating margin of 19.3% versus 6.9%, and net income of $43.0 million versus $16.3 million. The comparison reflects prior-year litigation settlement, lease termination, impairment and other costs, and severance costs. On the comparable adjusted measures, operating income excluding specified items was $54.7 million and 20.5%, while as adjusted net income was $45.6 million versus $49.7 million and Adjusted EBITDA was $73.5 million versus $75.9 million.
For the nine months ended September 30, 2026, service revenue rose 5.3% to $840.2 million and operating income increased 29.9% to $205.1 million. Operating cash flow was $171,589, while capital expenditures were $(29,608) and repurchases of common shares and shares withheld in lieu of income taxes were $(278,327). Unrestricted cash and cash equivalents and investments declined to $162.1 million from $300.1 million at December 31, 2025, which the Company attributed largely to repurchases and capital expenditures exceeding cash provided by operations.
The Q4 outlook calls for service revenue of between $320.5 million and $321.5 million, operating margin of between 36.0% and 36.2%, and diluted EPS of between $3.57 and $3.61. Full-year service revenue guidance is between $1,160.7 million and $1,161.7 million, with operating margin between 27.6% and 27.7% and diluted EPS between $9.81 and $9.85. The Board also approved a $355.0 million repurchase authorization increase, leaving $394.5 million available as of November 2, 2026.
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported operating metrics
- Gross profit and gross margin
- Free cash flow
- Debt balance
- Dividend amount or dividend policy
- Previous-period guidance for comparison
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.