Grand Canyon Education, Inc. Reports Fourth Quarter 2025 Results
For the three months ended December 31, 2025:
Service revenue for the three months ended December 31, 2025 was $308.1 million, an increase of $15.5 million, or 5.3%, as compared to service revenue of $292.6 million for the three months ended December 31, 2024. The increase year over year in service revenue was primarily due to an increase in university partner enrollments of 7.1% to 136,239 at December 31, 2025 as compared to 127,155 at December 31, 2024. Revenue per student decreased slightly between years primarily due to contract modifications with some of our university partners in which our revenue share percentage was reduced in exchange for us no longer reimbursing these partners for certain faculty costs which had the effect of reducing revenue per student, as well as 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. Revenue per student also declined due to the start date for the ground campus at Grand Canyon University ("GCU"), our most significant partner, shifting one day of revenue from the fourth quarter to the third quarter in 2025 which had a $0.9 million impact. These decreases were partially offset by the service revenue per student for accelerated Bachelor of Science in Nursing ("ABSN") students at our off-campus classroom and laboratory sites generating a significantly higher revenue per student than we earn under our agreement with GCU as these agreements generally provide us with a higher revenue share percentage, the partners have higher tuition rates than GCU and the majority of our partners' students take more credits on average per semester.
GCU enrollments increased to 131,826 at December 31, 2025, an increase of 7.0% over enrollments at December 31, 2024. University partner enrollments at our off-campus classroom and laboratory sites were 5,738, an increase of 16.6% over enrollments at December 31, 2024, which includes 1,325 and 913 GCU students at December 31, 2025 and 2024, respectively. Excluding sites closed in 2024 to new enrollments, total enrollments at our off-campus classroom and laboratory sites increased 18.7% between years. We opened six sites in the year ended December 31, 2024 and five new sites in the year ended December 31, 2025, closed two sites at which we stopped recruiting new students in 2024 and merged two sites that were located in the same market bringing the total number of these off-campus sites to 47 at December 31, 2025, all of which has also positively impacted the enrollment growth. Enrollments for GCU ground students were 24,678 at December 31, 2025 up from 24,552 at December 31, 2024. GCU online enrollments were 107,148 at December 31, 2025, up from 98,597 at December 31, 2024, an increase of 8.7% between years.
Operating income for the three months ended December 31, 2025 was $108.1 million, an increase of $8.1 million, or 8.1%, as compared to $100.0 million for the same period in 2024. The operating margin for the three months ended December 31, 2025 and 2024 was 35.1% and 34.2%, respectively.
Income tax expense for the three months ended December 31, 2025 was $25.0 million, an increase of $2.9 million, or 13.5%, as compared to income tax expense of $22.1 million for the three months ended December 31, 2024. Our effective tax rate was 22.4% during the three months ended December 31, 2025 compared to 21.2% during the three months ended December 31, 2024. The effective tax rate increased year over year due to higher state income taxes.
Net income for the three months ended December 31, 2025 was $86.7 million, an increase of $4.8 million, or 5.9% as compared to $81.9 million for the same period in 2024. As adjusted net income was $88.7 million and $85.1 million for the fourth quarters of 2025 and 2024, respectively.
Diluted net income per share was $3.14 and $2.84 for the fourth quarters of 2025 and 2024, respectively. As adjusted diluted net income per share was $3.21 and $2.95 for the fourth quarters of 2025 and 2024, respectively.
Adjusted EBITDA increased 5.8% to $123.3 million for the fourth quarter of 2025, compared to $116.6 million for the same period in 2024.
For the year ended December 31, 2025:
Service revenue for the year ended December 31, 2025 was $1,106.1 million, an increase of $73.1 million, or 7.1%, as compared to service revenue of $1,033.0 million for the year ended December 31, 2024. The increase year over year in service revenue was primarily due to an increase in university partner enrollments of 7.1% to 136,239 at December 31, 2025 as compared to 127,155 at December 31, 2024. Revenue per student was flat between years primarily due to the additional day for leap year in 2024 which added additional service revenue of $1.5 million as compared to 2025, contract modifications with some of our university partners in which our revenue share percentage was reduced in exchange for us no longer reimbursing these partners for certain faculty costs, a slight decline year over year in revenue per student for online students due to the continued mix shift to students that have a slightly lower net tuition rate, and a slight decline in residential students at GCU between years. These decreases were offset by 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.
Operating income for the year ended December 31, 2025 was $265.9 million, a decrease of $9.5 million, or 3.4%, as compared to $275.4 million for the year ended December 31, 2024. The operating margin for the years ended December 31, 2025 and 2024 was 24.0% and 26.7%, respectively. Operating income and operating margin were materially impacted in the year ended December 31, 2025 by a litigation settlement of $35.0 million related to the qui tam lawsuit; lease termination, impairment and other costs in the amount of $2.4 million due to the Company executing its lease termination provision on an office lease and the impairment of two off-campus classroom and laboratory site leases as the teach out at those locations has completed; loss on disposal of assets of $0.9 million; and $0.3 million of severance costs. Operating income and operating margin were negatively impacted in the year ended December 31, 2024 by impairment and other costs of $1.9 million, severance costs of $1.1 million related to an executive that resigned effective June 30, 2024 and loss on disposal of assets of $0.1 million. Excluding these costs and the amortization of intangible assets of $8.4 million in both the years ended December 31, 2025 and 2024, adjusted operating income and adjusted operating margin were $313.0 million and 28.3%, respectively, for the year ended December 31, 2025 compared to adjusted operating income and adjusted operating margin of $287.0 million and 27.8%, respectively for the year ended December 31, 2024. The operating income and operating margin for the year ended December 31, 2025 were positively impacted as compared to 2024 by contract modifications with some of our university partners in which our revenue share percentage was reduced in exchange for us no longer reimbursing the partner for certain faculty costs which had the effect of reducing operating expenses and revenue per student, which effects were partially offset by the additional day for leap year in 2024 which added additional service revenue of $1.5 million as compared to 2025.
Income tax expense for the year ended December 31, 2025 was $63.7 million, a decrease of $1.4 million, or 2.2%, as compared to income tax expense of $65.1 million for the year ended December 31, 2024. This decrease is primarily due to the decrease in our income before taxes between years. Our effective tax rate was 22.8% during the year ended December 31, 2025 compared to 22.3% during the year ended December 31, 2024. The effective tax rate was favorably impacted year over year primarily due to an increase in excess tax benefits of $2.7 million as compared to $1.5 million in the years ended December 31, 2025 and 2024, respectively. The effective tax rate was also favorably impacted by an increase in contributions made in lieu of state income taxes to $5.0 million as compared to $4.5 million in the prior year. These impacts were offset by the tax treatment of the litigation settlement recorded in the third quarter and changes in state income taxes.
Net income for the year ended December 31, 2025 was $216.2 million, a decrease of $10.0 million, or 4.4% as compared to $226.2 million for the same period in 2024. As adjusted net income was $254.5 million and $235.2 million for the years ended December 31, 2025 and 2024, respectively.
Diluted net income per share was $7.71 and $7.73 for the years ended December 31, 2025 and 2024, respectively. As adjusted diluted net income per share was $9.08 and $8.04 for the years ended December 31, 2025 and 2024, respectively.
Adjusted EBITDA increased 8.4% to $368.6 million for the year ended December 31, 2025, compared to $340.0 million for the same period in 2024.
Liquidity and Capital Resources
Our liquidity position, as measured by cash and cash equivalents and investments decreased by $24.5 million between December 31, 2024 and December 31, 2025, which was largely attributable to cash expended for share repurchases and capital expenditures exceeding our cash provided by operations during the year ended December 31, 2025. Our unrestricted cash and cash equivalents and investments were $300.1 million and $324.6 million at December 31, 2025 and 2024, respectively.
Grand Canyon Education, Inc. Reports Fourth Quarter 2025 Results and Full Year Outlook 2026
2026 Outlook
Q1 2026:
Service revenue of between $307.0 million and $308.0 million;
Operating margin of between 30.0% and 30.3%;
Effective tax rate of 23.4%;
Diluted EPS of between $2.70 and $2.73; and
27.0 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of $1.6 million, which equates to a $0.06 impact on diluted EPS. Thus, as adjusted, non-GAAP diluted income per share of between $2.76 and $2.79.
Q2 2026:
Service revenue of between $260.0 million and $264.0 million;
Operating margin of between 20.1% and 21.3%;
Effective tax rate of 24.9%;
Diluted EPS of between $1.56 and $1.68; and
26.6 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of $1.6 million, which equates to a $0.06 impact on diluted EPS. Thus, as adjusted, non-GAAP diluted income per share of between $1.62 and $1.74.
Q3 2026:
Service revenue of between $271.5 million and $278.5 million;
Operating margin of between 21.0% and 23.0%;
Effective tax rate of 24.9%;
Diluted EPS of between $1.72 and $1.91; and
26.3 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of $1.6 million, which equates to a $0.06 impact on diluted EPS. Thus, as adjusted, non-GAAP diluted income per share of between $1.78 and $1.97.
Q4 2026:
Service revenue of between $329.0 million and $338.5 million;
Operating margin of between 36.4% and 38.2%;
Effective tax rate of 24.3%;
Diluted EPS of between $3.57 and $3.85; and
26.0 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of $1.6 million, which equates to a $0.06 impact on diluted EPS. Thus, as adjusted, non-GAAP diluted income per share of between $3.63 and $3.91.
Full Year 2026:
Service revenue of between $1,167.5 million and $1,189.0 million;
Operating margin of between 27.5% and 28.8%;
Effective tax rate of 24.3%;
Diluted EPS between $9.55 and $10.16; and
26.5 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of $6.4 million, which equates to a $0.24 impact on diluted EPS. Thus, as adjusted, non-GAAP diluted income per share of between $9.79 and $10.40.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of federal securities laws including information relating to future events, future financial performance, strategies expectations, competitive environment, regulation, and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new programs; whether regulatory, economic, or business developments or other matters may or may not have a material adverse effect on our financial position, results of operations, or liquidity; projections, predictions, expectations, estimates, and forecasts as to our business, financial and operating results, and future economic performance; and management's goals and objectives and other similar expressions concerning matters that are not historical facts. Words such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar expressions, the negative of these expressions, as well as statements in future tense, identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause our actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements include, but are not limited to: (i) legal and regulatory actions taken against us related to our services business, or against our university partners that impact their businesses and that directly or indirectly reduce the service revenue we can earn under our master services agreements; (ii) the occurrence of any event, change or other circumstance that could give rise to the termination of any of the key university partner agreements; (iii) our ability to properly manage risks and challenges associated with strategic initiatives, including potential acquisitions or divestitures of, or investments in, new businesses, acquisitions of new properties and new university partners, and expansion of services provided to our existing university partners; (iv) our ability to comply with the extensive regulatory framework applicable to us either directly as a third-party service provider or indirectly through our university partners; (v) our ability to manage risks associated with epidemics, pandemics, or public health crises; (vi) our ability to manage risks resulting from system disruptions, interruptions, or outages associated with our technology platforms or those of third-party service providers; (vii) the ability of our university partners' students to obtain federal Title IV funds, state financial aid, and private financing; (viii) potential damage to our reputation or other adverse effects as a result of negative publicity in the media, in the industry or in connection with governmental reports or investigations or otherwise; (ix) risks associated with changes in applicable federal and state laws and regulations and accrediting commission standards; (x) competition from other education service companies in our geographic region and market sector; (xi) our ability to hire and train new, and develop and train existing employees; (xii) the pace of growth of our university partners' enrollment and its effect on the pace of our own growth; (xiii) fluctuations in our revenues due to seasonality; (xiv) our ability to, on behalf of our university partners, convert prospective students to enrolled students and to retain active students to graduation; and (xv) other risks and uncertainties identified from time to time in documents filed with the Securities and Exchange Commission (the "SEC") by us, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on February 18, 2026.
Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. This press release should be read in conjunction with the information included in our other press releases, reports and other filings with the SEC. Understanding the information contained in these filings is important in order to fully understand GCE's reported financial results and our business outlook for future periods.
Grand Canyon Education, Inc. Reports Fourth Quarter 2025 Results
Conference Call
Grand Canyon Education, Inc. will discuss its fourth quarter 2025 results and full year 2026 outlook during a conference call scheduled for today, February 18, 2026 at 4:30 p.m. Eastern time (ET).
Live Conference Dial-In:
Those interested in participating in the question-and-answer session should follow the conference dial-in instructions below. Participants may register for the call here to receive the dial-in numbers and unique PIN to access the call seamlessly. Please dial in at least ten minutes prior to the start of the call. Journalists are invited to listen only.
Webcast and Replay:
Investors, journalists and the general public may access a live webcast of this event at: Q4 2025 Grand Canyon Education Inc. Earnings Conference Call. A webcast replay will be available approximately two hours following the conclusion of the call at the same link.
About Grand Canyon Education, Inc.
Grand Canyon Education, Inc. ("GCE"), incorporated in 2008, is a publicly traded education services company that currently provides services to 20 university partners. GCE is uniquely positioned in the education services industry in that its leadership has over 30 years of proven expertise in providing a full array of support services in the post-secondary education sector and has developed significant technological solutions, infrastructure and operational processes to provide superior services in these areas on a large scale. GCE provides services that support students, faculty and staff of partner institutions such as marketing, strategic enrollment management, counseling services, financial services, technology, technical support, compliance, human resources, classroom operations, content development, faculty recruitment and training, among others. For more information about GCE visit the Company's website at www.gce.com.
Grand Canyon Education, Inc., 2600 W. Camelback Road, Phoenix, AZ 85017, www.gce.com.
Grand Canyon Education, Inc. Reports Fourth Quarter 2025 Results
GRAND CANYON EDUCATION, INC.
Consolidated Income Statements
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2025
2024
2025
2024
(In thousands, except per share data)
Service revenue
$
308,119
$
292,573
$
1,106,070
$
1,033,002
Costs and expenses:
Technology and academic services
45,354
43,004
175,060
165,085
Counseling services and support
88,400
85,327
342,650
323,484
Marketing and communication
53,692
49,646
229,204
212,420
General and administrative
10,490
10,568
47,416
46,298
Litigation settlement
—
—
35,000
—
Lease termination, impairment and other
—
1,897
2,411
1,897
Amortization of intangible assets
2,104
2,104
8,419
8,419
Total costs and expenses
200,040
192,546
840,160
