Grand Canyon Education(US:LOPE) Prnewswire·2025-11-05 21:05Core Insights - Grand Canyon Education, Inc. reported a service revenue of $261.1 million for Q3 2025, reflecting a 9.6% increase from $238.3 million in Q3 2024, primarily driven by a 7.9% rise in partner enrollments to 138,073 [2][4] - The company experienced a significant decrease in operating income, which fell to $18.0 million, a 62.6% decline compared to $48.2 million in the same quarter of the previous year, largely due to a $35.0 million reserve for litigation settlement [2][5] - Net income for Q3 2025 was $16.3 million, down 60.8% from $41.5 million in Q3 2024, with diluted net income per share decreasing to $0.58 from $1.42 [5][22] Financial Performance - For the nine months ended September 30, 2025, service revenue reached $798.0 million, a 7.8% increase from $740.4 million in the same period of 2024, attributed to a 7.9% rise in partner enrollments [10][21] - Operating income for the nine months was $157.8 million, down 10.0% from $175.4 million in 2024, with an operating margin of 19.8% compared to 23.7% in the prior year [10][21] - Adjusted EBITDA for Q3 2025 increased by 14.4% to $75.9 million from $66.3 million in Q3 2024, while for the nine months, it rose 9.8% to $245.3 million from $223.4 million [5][10] Enrollment and Operational Metrics - GCU enrollments increased to 132,486, a 7.7% rise from 2024, while off-campus classroom and laboratory site enrollments grew by 17.4% to 6,912 [2][4] - The company opened five new off-campus sites in 2025, bringing the total to 47, contributing positively to enrollment growth [2][4] - Revenue per student saw a slight decline due to contract modifications and a shift in student demographics towards those with lower net tuition rates [2][4] Tax and Income Details - Income tax expense for Q3 2025 was $5.4 million, a 50.4% decrease from $10.9 million in Q3 2024, with an effective tax rate of 24.9% compared to 20.8% in the previous year [5][10] - For the nine months ended September 30, 2025, net income was $129.4 million, down 10.3% from $144.4 million in 2024, with diluted net income per share at $4.60 compared to $4.91 [10][22] Liquidity and Capital Resources - The company's liquidity position decreased by $47.6 million from December 31, 2024, to September 30, 2025, primarily due to cash used for investing activities and share repurchases [7] - As of September 30, 2025, unrestricted cash and cash equivalents were $277.0 million, down from $324.6 million at the end of 2024 [7][23] Outlook - The company provided guidance for Q4 2025, projecting diluted EPS between $3.07 and $3.18, and for the full year 2025, diluted EPS is expected to be between $7.66 and $7.77 [8][11]