Financial Data and Key Metrics Changes - Non-GAAP diluted income per share for Q2 2021 was $1.12, compared to $1.03 in Q2 2020, reflecting a year-over-year increase [47] - The effective tax rate for Q2 2021 was 23.3%, down from 24.6% in Q2 2020, primarily due to favorable adjustments from state audits [50] - Total unrestricted cash and short-term investments as of June 30, 2021, were $113.9 million, with capital expenditures (CapEx) of approximately $6.8 million in Q2 2021 [54] Business Line Data and Key Metrics Changes - Grand Canyon University Online had 91,572 students as of June 30, 2021, with a year-over-year growth of 4.1% [10] - Ground campus enrollment started with 22,363 students in fall 2020, with an increase of 11.5% in traditional students, excluding professional studies [20] - GCE/Orbis partner enrollments at off-campus sites were 4,210, a 13.2% increase year-over-year, with nursing enrollment up 19% [33] Market Data and Key Metrics Changes - The pandemic has caused significant enrollment and financial issues for many universities, impacting GCE's short-term growth [6] - GCU's traditional campus is near capacity, necessitating the construction of at least two new residence halls to meet demand [21] - The average incoming GPA for new students attending the ground campus is 3.6, with the honors college growing to over 2,800 students [22] Company Strategy and Development Direction - GCE aims to create educational models addressing rising costs, increasing debt levels, and inadequate support services in higher education [7] - The company is focused on expanding its three platforms: GCU Online, traditional campus, and GCE/Orbis, with significant investments planned [41][29] - GCE plans to invest an additional $500 million over the next four years to accommodate growth in traditional campus enrollment [29] Management's Comments on Operating Environment and Future Outlook - Management views current enrollment challenges as short-term, with confidence in returning to long-term growth once normal operations resume [17][18] - The company is optimistic about the upcoming fall semester, with strong demand for a fully open campus experience [76][79] - Management acknowledges increased competition but believes their direct engagement strategy will mitigate its impact [72][75] Other Important Information - GCE repurchased 981,431 shares at a cost of approximately $95.3 million in Q2 2021, with an additional $970 million authorized for share repurchase [51][53] - The company has a strong financial position post-split from GCE, with $307 million in cash as of June 30, 2021 [29] - GCE is expanding its off-campus classroom and laboratory sites, aiming for over 40 locations by the end of 2022 [36] Q&A Session Summary Question: Enrollment trends at Grand Canyon University online - Management acknowledged increased competition but emphasized their unique direct engagement strategy with schools and hospitals, which continues to yield results [72][75] Question: Impact of the Delta variant on ground students - Management reported no reluctance among students to return, with parents expressing a desire for a fully open campus [76][79] Question: Clarification on new enrollment sources - Management confirmed that two-thirds of new enrollments come from marketing channels outside direct counseling, which have not diminished [85][87] Question: Update on stock repurchase and refinancing - Management confirmed plans to repurchase at least $500 million of stock, with potential for more depending on the refinancing outcome [88][91] Question: Growth of Orbis and occupational therapy enrollment - Management noted a decline in occupational therapy enrollment due to COVID restrictions but highlighted a 19% increase in nursing programs [97][98]

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) The first part presents the company's financial statements, management's discussion, market risk disclosures, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201%20Financial%20Statements) The company's financial statements for the period ended June 30, 2021, show increased service revenue and net income, stable total assets, increased liabilities, and decreased operating cash flow due to working capital changes [Consolidated Income Statements](index=4&type=section&id=Consolidated%20Income%20Statements) Q2 and H1 2021 vs 2020 Performance | Metric (In thousands, except per share) | Q2 2021 | Q2 2020 | YoY Change | H1 2021 | H1 2020 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Service Revenue** | $201,487 | $185,768 | +8.5% | $438,421 | $407,423 | +7.6% | | **Operating Income** | $50,248 | $48,310 | +4.0% | $134,474 | $129,106 | +4.2% | | **Net Income** | $49,461 | $47,010 | +5.2% | $127,573 | $118,395 | +7.8% | | **Diluted EPS** | $1.09 | $1.00 | +9.0% | $2.78 | $2.49 | +11.6% | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Balance Sheet Highlights (In thousands) | Account | June 30, 2021 | Dec 31, 2020 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $69,448 | $245,769 | -71.7% | | Secured Note receivable, net | $1,154,912 | $964,912 | +19.7% | | Total Assets | $1,846,967 | $1,844,579 | +0.1% | | Total Liabilities | $304,284 | $270,250 | +12.6% | | Total Stockholders' Equity | $1,542,683 | $1,574,329 | -2.0% | - The significant decrease in cash and cash equivalents is primarily due to share repurchases and funding provided to GCU, while the increase in the Secured Note receivable reflects additional loans to GCU[12](index=12&type=chunk)[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended June 30 (In thousands) | Cash Flow Category | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $210,329 | $221,052 | | Net cash used in investing activities | ($240,085) | ($80,577) | | Net cash used in financing activities | ($146,565) | ($90,515) | | **Net (decrease) increase in cash** | **($176,321)** | **$49,960** | - The decrease in operating cash flow was mainly due to changes in working capital, particularly income taxes[18](index=18&type=chunk) The significant increase in cash used for investing activities was driven by a **$190 million** funding to GCU and increased investment purchases[18](index=18&type=chunk) Cash used in financing activities rose due to a substantial increase in common share repurchases, totaling **$167.7 million** in H1 2021 versus **$74.0 million** in H1 2020[18](index=18&type=chunk)[169](index=169&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's business as an education services provider for 27 university partners, with Grand Canyon University (GCU) being the most significant, outlining key accounting policies, the Secured Note from GCU, leases, debt obligations, and an active share repurchase program - GCE provides education services to **27 university partners** as of June 30, 2021, with Grand Canyon University (GCU) as its most significant partner[21](index=21&type=chunk)[23](index=23&type=chunk) - Revenue is generated through services agreements where GCE receives a percentage of its university partners' tuition and fee revenue, which is **60% for GCU**[29](index=29&type=chunk)[50](index=50&type=chunk) - The company holds a Secured Note from GCU with a principal balance of **$1.15 billion** as of June 30, 2021, bearing interest at **6.0% annually**[29](index=29&type=chunk)[12](index=12&type=chunk) - The company has an active share repurchase program, which was increased by **$100 million** in January 2021 and **$970 million** in July 2021, with **1.55 million shares** repurchased for **$151.7 million** during H1 2021[97](index=97&type=chunk)[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting an 8.5% increase in Q2 2021 service revenue driven by partner enrollments and higher revenue per student, detailing COVID-19's impact on enrollment growth, increased operating expenses for new sites, and strong liquidity supported by cash and an active share repurchase program [Impact of COVID-19](index=25&type=section&id=Impact%20of%20COVID-19) - The pandemic initially accelerated GCU's online enrollment growth in 2020 as more working adults returned to school[117](index=117&type=chunk) - Beginning in Q2 2021, online enrollment growth rates began to slow as new enrollments and re-entries declined year-over-year, and student dropouts returned to historical levels, a trend expected to continue through the rest of 2021[119](index=119&type=chunk) - GCU's non-tuition revenue, negatively impacted in 2020, saw recovery in 2021, with residential student capacity expected to be full for Fall 2021[116](index=116&type=chunk)[117](index=117&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) For Q2 2021, service revenue grew 8.5% to $201.5 million, driven by increased partner enrollments and higher revenue per student, while operating expenses rose, particularly in Technology and Academic Services, contributing to a 7.8% net income growth for H1 2021 Q2 2021 vs Q2 2020 Results Summary | Metric | Q2 2021 | Q2 2020 | YoY Change | Key Driver | | :--- | :--- | :--- | :--- | :--- | | **Service Revenue** | $201.5M | $185.8M | +8.5% | 3.5% increase in partner enrollments and higher revenue per student | | **Technology & Academic Services Expense** | $33.7M | $27.2M | +24.0% | Increased headcount and costs for new off-campus sites | | **Counseling Services & Support Expense** | $60.9M | $57.6M | +5.8% | Increased headcount and travel costs | | **Marketing & Communication Expense** | $45.4M | $41.1M | +10.6% | Increased advertising for new partners and locations | | **Net Income** | $49.5M | $47.0M | +5.2% | Revenue growth partially offset by higher operating costs | - Total partner enrollments reached **101,808** at June 30, 2021, a **3.5% increase** from the prior year, with enrollments at off-campus classroom and laboratory sites growing **13.2%**[127](index=127&type=chunk) - The effective tax rate for Q2 2021 was **23.3%**, down from **24.6%** in Q2 2020, due to favorable adjustments from state audits[139](index=139&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q2 2021 with **$113.9 million** in unrestricted cash and investments, plus **$115.0 million** available on its credit line, supporting a significant share repurchase program and a short-term loan to GCU - As of June 30, 2021, the company had **$113.9 million** in unrestricted cash, cash equivalents, and investments, with an additional **$115.0 million** available on its credit facility[157](index=157&type=chunk) - The Board of Directors increased the share repurchase authorization by **$100 million** in January 2021 and **$970 million** in July 2021, bringing the total program authorization to **$1.47 billion**[162](index=162&type=chunk) - The company entered into two Accelerated Share Repurchase (ASR) agreements in March and May 2021 to buy back **$35.0 million** and **$50.0 million** of its common stock, respectively[164](index=164&type=chunk)[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that inflation has not materially impacted its results, and while market risk is primarily related to interest rate fluctuations, a 10% change is not expected to have a material impact on earnings, fair values, or cash flows - The company believes inflation has not materially impacted its results of operations[175](index=175&type=chunk) - Interest rate risk is managed by investing excess funds in a portfolio of cash equivalents and various rated securities, with a **10% change** in interest rates not expected to have a material impact[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting identified during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[178](index=178&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[179](index=179&type=chunk)[181](index=181&type=chunk) [PART II – OTHER INFORMATION](index=36&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) The second part covers legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201%20Legal%20Proceedings) The company reported no material legal proceedings - None[182](index=182&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - No material changes from the risk factors disclosed in the 2020 Form 10-K[183](index=183&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details its significant share repurchase activity, including a substantial increase in its repurchase authorization, with **981,431 shares** repurchased at an average price of **$97.13** during Q2 2021 through open market purchases and two Accelerated Share Repurchase (ASR) agreements - The Board of Directors increased the stock repurchase authorization by **$100.0 million** in January 2021 and **$970.0 million** in July 2021, bringing the aggregate authorization to **$1.47 billion**[185](index=185&type=chunk) - The company executed two ASR agreements in Q2 2021: one for **$35.0 million** initiated in March and completed in May, and another for **$50.0 million** initiated in May to be completed by September 2021[186](index=186&type=chunk)[187](index=187&type=chunk) Share Repurchases in Q2 2021 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2021 | 31,360 | $110.32 | | May 2021 | 720,046 | $98.74 | | June 2021 | 230,025 | $90.30 | | **Total Q2** | **981,431** | **$97.13** | [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[191](index=191&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204%20Mine%20Safety%20Disclosures) Not applicable to the company - None[192](index=192&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205%20Other%20Information) The company reported no other information - None[193](index=193&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, and the financial statements formatted in Inline XBRL - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906[196](index=196&type=chunk) - The financial statements and notes were also filed in Inline XBRL format[196](index=196&type=chunk)

Grand Canyon Education, Inc. (NASDAQ:LOPE) Q1 2021 Earnings Conference Call May 5, 2021 4:30 PM ET Company Participants Dan Bachus – Chief Financial Officer Brian Mueller – Chairman and Chief Executive Officer Conference Call Participants Jeff Meuler – Baird Brett Knoblauch – Berenberg Capital Greg Pendy – Sidoti Operator Good day and thank you for standing by. Welcome to the Quarter One 2021 Grand Canyon Education, Inc. Earnings Conference Call. At this time all participants are in a listen-only mode. [Ope ...

PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201%20Financial%20Statements) Grand Canyon Education, Inc. reported increased service revenue and net income for Q1 2021, showing growth in total assets and operating cash flow Consolidated Income Statement Highlights (Q1 2021 vs Q1 2020) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Service Revenue | $236,934 thousand | $221,655 thousand | | Operating Income | $84,226 thousand | $80,796 thousand | | Net Income | $78,112 thousand | $71,385 thousand | | Diluted EPS | $1.69 | $1.49 | Consolidated Balance Sheet Highlights | Metric | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $225,829 thousand | $245,769 thousand | | Total Assets | $1,885,027 thousand | $1,844,579 thousand | | Total Liabilities | $296,349 thousand | $270,250 thousand | | Total Stockholders' Equity | $1,588,678 thousand | $1,574,329 thousand | Consolidated Cash Flow Highlights (Q1 2021 vs Q1 2020) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $89,827 thousand | $85,719 thousand | | Net cash used in investing activities | ($34,819) thousand | ($1,878) thousand | | Net cash used in financing activities | ($74,948) thousand | ($73,920) thousand | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's business as an education services provider for 26 university partners, with Grand Canyon University (GCU) being the most significant, and outline key accounting policies, the **$964.9 million** Secured Note from GCU, and a **$500 million** share repurchase program - GCE provides education services to **26 university partners** as of March 31, 2021, with Grand Canyon University (GCU) being its most significant partner[21](index=21&type=chunk)[23](index=23&type=chunk) - Revenue is generated from service agreements, receiving a percentage of partners' tuition and fee revenue, which is **60% for GCU**[29](index=29&type=chunk)[50](index=50&type=chunk) - The company holds a Secured Note from GCU with a carrying value of **$964.9 million** and a fair value of **$1.046 billion** as of March 31, 2021, bearing **6.0% annual interest**[29](index=29&type=chunk)[45](index=45&type=chunk) - In January 2021, the Board of Directors increased the share repurchase program authorization by **$100 million**, bringing the aggregate authorization to **$500 million**, expiring December 31, 2021[99](index=99&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2021 financial results, highlighting service revenue growth, COVID-19's impact on ancillary revenues, increased operating expenses, and strong liquidity - The COVID-19 pandemic reduced GCU's non-tuition revenue (dormitory, ancillary businesses) in 2020 and Q1 2021, estimated to have a further **$1.2 million** negative impact on revenue and profit in Q2 2021[115](index=115&type=chunk)[123](index=123&type=chunk) - Service revenue increased by **$15.2 million (6.9%)** year-over-year, driven by a **7.2%** increase in total partner enrollments to **115,390**, partially offset by lower revenue per student due to COVID-19's impact on GCU's ancillary revenues[126](index=126&type=chunk) - The company opened **seven new off-campus classroom and laboratory sites** in the second half of 2020 and one in Spring 2021, increasing the total to **29 sites** from 23 a year prior[126](index=126&type=chunk) - The effective tax rate decreased to **20.4%** in Q1 2021 from **24.2%** in Q1 2020, primarily due to a **$4.4 million** increase in excess tax benefits from share-based compensation[136](index=136&type=chunk)[137](index=137&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) In Q1 2021, service revenue grew **6.9%** to **$236,934 thousand**, accompanied by increased operating expenses across key categories, contributing to a **9.4%** rise in net income Operating Expenses as a Percentage of Net Revenue | Expense Category | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Technology and academic services | 13.5% | 11.9% | | Counseling services and support | 25.8% | 27.2% | | Marketing and communication | 20.1% | 19.3% | | General and administrative | 4.0% | 4.3% | - Technology and academic services expenses increased by **$5.8 million (22.0%)** due to higher employee compensation, occupancy costs for new sites, and technology supply costs[127](index=127&type=chunk) - Marketing and communication expenses increased by **$5.0 million (11.8%)** primarily due to a **$4.7 million** increase in advertising costs to market new university partners and locations[130](index=130&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2021, the company maintained strong liquidity with **$262,300 thousand** in cash and investments and a **$150,000 thousand** available credit line, primarily using cash for capital expenditures and share repurchases - The company had **$262.3 million** in unrestricted cash, cash equivalents, and investments at March 31, 2021, with an additional **$150.0 million** available on its credit facility[141](index=141&type=chunk) - Net cash from operating activities was **$89.8 million** in Q1 2021, up from **$85.7 million** in Q1 2020[149](index=149&type=chunk) - Investing activities used **$34.8 million**, including **$8.9 million** for capital expenditures (largely for new sites) and a net **$25.8 million** for investment purchases[150](index=150&type=chunk) - Financing activities used **$74.9 million**, including **$63.3 million** for share repurchases (including ASR activity) and **$8.3 million** in principal payments on notes payable[151](index=151&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states inflation has not materially impacted operations, managing interest rate risk through investments, with a **10%** interest rate change not expected to materially impact earnings or cash flows - The company believes inflation has not had a material impact on its results of operations[155](index=155&type=chunk) - The company manages interest rate risk by investing excess funds in cash equivalents and various securities rated BBB or higher, with no derivative financial instruments[156](index=156&type=chunk)[157](index=157&type=chunk) - A hypothetical **10%** increase or decrease in interest rates is not expected to have a material impact on the company's future earnings, fair values, or cash flows[157](index=157&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of March 31, 2021[158](index=158&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[159](index=159&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=Item%201%20Legal%20Proceedings) The company reports no material legal proceedings - None[160](index=160&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020[161](index=161&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities, detailing its stock repurchase program increased to **$500 million** in January 2021, with **567,255 shares** repurchased for **$56.3 million** - In January 2021, the Board of Directors increased the stock repurchase authorization by **$100.0 million**, for an aggregate authorization of **$500.0 million**[163](index=163&type=chunk) - On March 10, 2021, the company entered into a **$35.0 million** Accelerated Share Repurchase (ASR) agreement with Morgan Stanley[164](index=164&type=chunk) Share Repurchases in Q1 2021 | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Dollar Value Remaining Under Program | | :--- | :--- | :--- | :--- | | Jan 2021 | 112,121 | $88.05 | $238,400,000 | | Feb 2021 | 73,832 | $101.10 | $230,900,000 | | Mar 2021 | 381,302 | $102.31 | $191,900,000 | | **Total** | **567,255** | **$99.33** | **$191,900,000** | [Defaults Upon Senior Securities](index=33&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[167](index=167&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None[168](index=168&type=chunk) [Other Information](index=33&type=section&id=Item%205%20Other%20Information) The company reports no other information - None[169](index=169&type=chunk) [Exhibits](index=33&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate documents and certifications from the Principal Executive Officer and Principal Financial Officer, along with financial statements in Inline XBRL format - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[171](index=171&type=chunk)[172](index=172&type=chunk) - Financial statements are provided in Inline XBRL format as part of the filing[172](index=172&type=chunk)

Grand Canyon Education, Inc. (NASDAQ:LOPE) Q4 2020 Earnings Conference Call February 17, 2021 4:30 PM ET Company Participants Daniel Bachus - Chief Financial Officer Brian Mueller - Chairman and Chief Executive Officer Conference Call Participants Jeff Silber - BMO Capital Markets Jeff Meuler - Baird Greg Pendy - Sidoti Brett Knoblauch - Capital Markets Operator Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter 2020 Grand Canyon Education, Inc. Earnings Conference Call. At ...

Financial Performance - The company recorded $844 million in service revenue for the year ended December 31, 2020[344]. - Service revenue for 2020 was $844,096, an increase of 8.4% compared to $778,643 in 2019[351]. - Operating income rose to $277,437, compared to $265,131 in 2019, reflecting a growth of 4.9%[351]. - Net income for 2020 was $257,196, slightly down from $259,175 in 2019, indicating a decrease of 0.8%[353]. - Basic earnings per share increased to $5.49, up from $5.42 in 2019, a rise of 1.3%[351]. - The company reported a comprehensive income of $257,196 for 2020, compared to $259,628 in 2019[353]. - Net income for the year ended December 31, 2020, was $229,011,000, compared to $308,823,000 in 2019[360]. - Cash flows provided by operating activities decreased to $229,011,000 in 2020 from $308,823,000 in 2019[360]. - The total income tax expense for the year ended December 31, 2020, was $75,944, compared to $58,327 in 2019[479]. - The effective income tax rate for the year ended December 31, 2020, was 22.8%, an increase from 18.4% in 2019[482]. Assets and Liabilities - Total assets increased to $1,844,579, up from $1,690,289 in 2019, representing a growth of approximately 9.2%[349]. - Total current assets increased to $333,742, compared to $208,344 in 2019, marking a significant increase of 60.1%[349]. - Total current liabilities rose to $118,718, up from $95,230 in 2019, an increase of 24.6%[349]. - The total stockholders' equity increased to $1,574,329, up from $1,443,433 in 2019, representing a growth of 9.1%[349]. - As of December 31, 2020, the Company had notes payable of $107,774, down from $140,918 in 2019[459]. Revenue Recognition and Accounting - The Company recognizes service revenue over time using the output method, reflecting the consumption of services by university partners[422]. - The Company has no contract assets and reports contract liabilities as deferred revenue and student deposits in the consolidated balance sheets[416]. - The Company capitalizes costs related to internal-use software and content development, amortizing these costs over their estimated useful lives[391][395]. - The Company evaluates long-lived assets for impairment whenever events indicate that the carrying amount may not be recoverable[396]. - The Company recognizes right-of-use assets and lease liabilities based on the present value of lease payments over the lease term[397]. Acquisitions and Investments - The acquisition of Orbis Education in January 2019 was for $361,184,000, net of cash acquired[364]. - GCE acquired Orbis Education for $361,184, funded by $191,000 from an amended credit agreement and $171,034 in operating cash[376]. - The fair value of the assets acquired exceeded the purchase price by $157,825, recorded as goodwill[376]. - Identified intangible assets from the acquisition were valued at $210,280, primarily from university partner relationships[378]. - The Company has consolidated the results of operations for Orbis Education since the acquisition date[380]. Risk Management - The company emphasizes the importance of managing risks associated with strategic initiatives, including potential acquisitions and expansion of services[11]. - The company is subject to risks associated with changes in federal and state laws and regulations affecting its operations[11]. - The company aims to effectively manage future growth and the impact of public health emergencies on its operations[15]. - The company actively monitors the impact of the COVID-19 pandemic on expected credit losses, indicating a proactive approach to risk management[440]. - The company has maintained an allowance for credit losses of $5,000 since the transition to an education services company on July 1, 2018, with no credit losses reported from university partners[428]. Shareholder Information - The Company repurchased 1,602 shares of common stock at an aggregate cost of $129,045 during the year ended December 31, 2020[476]. - As of December 31, 2020, there were 419 thousand shares of restricted stock outstanding, with a weighted average grant date fair value of $83.43 per share[490]. - The Company granted 164 thousand shares of restricted stock during fiscal year 2020[487]. - The aggregate intrinsic value of stock options outstanding as of December 31, 2020, was $13,586 thousand[494]. Operational Insights - The company recorded fluctuations in revenues due to seasonality, affecting its overall financial performance[15]. - The Company generates revenue through Services Agreements with university partners, with initial terms ranging from 7-15 years[421]. - The Company provided education services to 25 university partners across the United States as of December 31, 2020[365]. - Marketing and communication expenses include lead acquisition and digital strategies, reflecting the Company’s focus on enhancing brand identity and student engagement[431]. - The Company plans to continue expanding its service offerings and investing in technology to drive future growth[502].

Grand Canyon Education, Inc. (NASDAQ:LOPE) Q3 2020 Earnings Conference Call November 5, 2020 4:30 PM ET Company Participants Dan Bachus - Chief Financial Officer Brian Mueller - Chairman & Chief Executive Officer Conference Call Participants Jeff Meuler - Baird Henry Chien - BMO Capital Markets Greg Pendy - Sidoti & Company Brett Knoblauch - Berenberg Capital Operator Good afternoon, ladies and gentlemen, and welcome to the Third Quarter 2020 Grand Canyon Education Incorporated Earnings Conference Call. At ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-34211 GRAND CANYON EDUCATION, INC. (Exact name of registrant as specified in its charter) Delaware 20 ...

Financial Data and Key Metrics Changes - Non-GAAP diluted income per share for Q2 2020 was $1.3, down from $1.9 in Q2 2019 [32] - Service revenue significantly exceeded expectations in Q2 2020 due to acceleration in GCU's online enrollment [32] - Revenue per student decreased year-over-year due to lower ancillary revenues at GCU, but grew when excluding COVID-19 impacts [35] Business Line Data and Key Metrics Changes - GCU online had 87,959 students as of June 30, 2020, with new students growing in the high-teens and total students up 8.2% year-over-year [7] - GCU traditional campus maintained profitability without raising tuition for 12 years and plans to exceed enrollment goals for the fall semester [12] - Orbis revenues grew 24.2% year-over-year for the three months ended June 30, 2020, with enrollments up 12.2% [22] Market Data and Key Metrics Changes - GCU's cash balance at June 30, 2020, was approximately $308 million, with net assets growing to almost $410 million [17] - Total unrestricted cash and short-term investments at June 30, 2020, were $187.2 million [38] - Ground campus applications for fall 2021 are running 81% ahead of last year's application rate [16] Company Strategy and Development Direction - GCE aims to address rising costs of university education and increasing student debt levels through innovative delivery models [5] - The company plans to open 11 new Orbis locations in the next 12 months, targeting a total of 70 locations in the next seven years [20][23] - GCE is focused on finding comprehensive partnerships with universities to improve online education quality and expand working adult programs [27][28] Management's Comments on Operating Environment and Future Outlook - Management anticipates new enrollment trends will normalize to mid to high single-digit growth in Q3 2020, which is still significant [10] - The pandemic has not negatively impacted GCU's financials due to the structure of the MSA with GCE [17] - Management expressed confidence in the ability to maintain high persistence rates among incoming students, which will support future growth [64] Other Important Information - The company repurchased 111,100 shares at a cost of approximately $8.3 million in Q2 2020, with an increased share repurchase authorization to $300 million [37] - GCU's nursing program has consistently achieved first-time pass rates on the NCLEX exam over 90% [21] - The effective tax rate for Q2 2020 was 24.6%, up from 21.7% in Q2 2019 [36] Q&A Session Summary Question: Can you provide more details on the growth of working adult students online? - Management noted that the percentage of graduate students has increased, with graduate students making up around 50% of the online enrollment [51] Question: What health and safety plans are in place for the fall semester? - Management outlined plans for social distancing, reduced classroom capacity, and outdoor activities to ensure safety [57] Question: Why is online new enrollment growth expected to normalize quickly? - Management explained that the pandemic created a unique demand situation that may not be sustainable as typical enrollment patterns resume [64] Question: How is the guidance accounting for students opting for online classes? - Guidance currently assumes around 3,500 students will take all classes online, with potential for that number to increase [71] Question: What impact does the mix of graduate students have on revenue per student? - Management indicated that revenue per student is similar between graduate and undergraduate students, with graduate students having higher persistence and graduation rates [75]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (Exact name of registrant as specified in its charter) Delaware 20-3356009 (State or other jurisdiction of Incorporation or organization) (I.R.S. Employer Identification No.) 2600 W. Camelback Road Phoenix, Arizona 85017 (Address, including zip code, of principal executive of ices) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ...