Grand Canyon Education’s Earnings Call Highlights Growth

Grand Canyon Education ((LOPE)) has held its Q3 earnings call. Read on for the main highlights of the call.

Grand Canyon Education’s third-quarter earnings call for 2025 painted a generally positive picture, highlighting strong growth in online and hybrid enrollments alongside increased service revenue. Despite some challenges, such as a slight decline in traditional campus enrollments and decreased revenue per student, the overall sentiment was optimistic, with the highlights outweighing the lowlights.

Online Enrollment Growth

Grand Canyon Education reported a remarkable 9.6% growth in online enrollment for the third quarter of 2025, surpassing its long-term objectives. The company also noted an increase in new starts, which rose in the mid-single digits, showcasing the strength of its online education offerings.

Hybrid Campus Enrollment Surge

The company experienced a significant surge in hybrid campus enrollments, which increased by 17.4% year-over-year, and 19.3% when excluding closed sites. This growth exceeded expectations and underscores the appeal of hybrid learning models.

Service Revenue Increase

Service revenue for the third quarter reached $261.1 million, marking a 9.6% increase compared to the same period in 2024. This growth was driven by a 7.9% increase in partner enrollments, highlighting the company’s successful partnerships and service offerings.

Adjusted Operating Income Growth

Grand Canyon Education reported an adjusted operating income of $58.2 million for the quarter, up from $50.3 million in the previous year. The adjusted operating margin stood at 22.3%, reflecting efficient operational management.

Significant Program Expansion

The company expanded its programmatic offerings with new graduate nursing and occupational therapy programs at various locations. This strategic expansion aims to cater to the growing demand in these fields and enhance the company’s educational portfolio.

Slight Decline in Traditional Campus Enrollment

Traditional campus enrollments saw a slight decline year-over-year, attributed to previous declines in new enrollments and higher-than-expected summer school graduations. This remains a challenge for the company as it navigates changing educational preferences.

Revenue Per Student Decrease

There was a noted decrease in revenue per student year-over-year, primarily due to contract modifications with university partners and a shift towards students with a slightly lower net tuition rate.

Impact of Government Shutdown on Military Tuition Assistance

The anticipated government shutdown is expected to lower revenue from military tuition assistance students, potentially impacting fourth-quarter revenue by $3 million. This presents a potential challenge for the company’s financial outlook.

Higher Than Expected Benefit Costs

Benefit costs were significantly higher than expected, impacting earnings per share by $0.06 in the third quarter. This trend is anticipated to continue into the fourth quarter, posing a potential financial strain.

Forward-Looking Guidance

Looking ahead, Grand Canyon Education has revised its full-year guidance, taking into account the potential impact of a government shutdown on military tuition assistance, with an estimated $3 million revenue impact for the fourth quarter. The company remains committed to its stock buyback strategy, with $136.4 million remaining under its current authorization. Additionally, the focus on expanding programmatic offerings in key sectors like nursing, healthcare, education, business, and technology remains strong.

In summary, Grand Canyon Education’s third-quarter earnings call reflected a positive sentiment, driven by substantial growth in online and hybrid enrollments and increased service revenue. While challenges such as declining traditional campus enrollments and higher benefit costs persist, the company’s strategic initiatives and forward-looking guidance suggest a promising outlook.