Grand Canyon Education (NasdaqGS:LOPE) Q4 2025 Earnings call February 18, 2026 04:30 PM ET Company ParticipantsAlex Paris - PresidentBrian Mueller - President and CEODan Bachus - CFOJeff Silber - Managing DirectorSarah Collins - General CounselOperatorGood day, and thank you for standing by. Welcome to the Fourth Quarter 2025 Grand Canyon Education earnings conference call. At this time, all participants are on listen only mode. After the speaker's presentation, we'll open up for questions. To ask a questio ...

Grand Canyon Education (NasdaqGS:LOPE) Q4 2025 Earnings call February 18, 2026 04:30 PM ET Speaker4Good day, and thank you for standing by. Welcome to the fourth quarter 2025 Grand Canyon Education earnings conference call. At this time, all participants are on listen only mode. After the speaker's presentation, we'll open up for questions. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To wit ...

Financial Data and Key Metrics Changes - Service revenue for Q4 2024 was $292.6 million, an increase of $14.3 million or 5.1% compared to $278.3 million in Q4 2023 [18] - Operating income for Q4 2024 was $100 million with an operating margin of 34.2%, while excluding impairment charges, operating income was $101.9 million, up $4.1 million from $97.8 million in Q4 2023 [19][24] - Net income increased by 1.4% to $81.9 million in Q4 2024 compared to $80.7 million in Q4 2023 [19] Business Line Data and Key Metrics Changes - Online enrollment growth was 7.1% in Q4 2024, with new starts expected to increase in the mid to high single digits for Q1 2025 [3][8] - Ground campus enrollments were slightly down year over year, but GCU plans to grow its traditional campus to 50,000 students [8][9] - Hybrid campus enrollment increased by 9.8% year over year in Q4 2024, with an expected growth rate in the low to mid teens for 2025 [10] Market Data and Key Metrics Changes - New starts from employer partnerships increased by 12.5% year over year in Q4 2024, focusing on industries like education and healthcare [6] - The company has rolled out 148 new programs since the pandemic, directly tied to labor market opportunities [5] Company Strategy and Development Direction - The company aims to address workforce challenges by providing relevant programs and creative delivery models [4] - GCE continues to invest in initiatives for university partners, believing in the untapped potential of the workforce [3] - The company is focused on maintaining low tuition increases, averaging about 1% per year since 2018 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about enrollment growth, citing positive trends in registrations and retention rates [41] - The company anticipates a slight decline in margins in the first half of 2025 due to increased investments but expects margins to expand in the second half [33] - Management highlighted the importance of producing strong outcomes in education to align with regulatory expectations and market needs [65] Other Important Information - The effective tax rate for Q4 2024 was 21.2%, an increase from 19.9% in Q4 2023, primarily due to higher state income taxes [25] - The company repurchased 416,497 shares at a cost of approximately $64.8 million in Q4 2024, with an additional 226,258 shares repurchased since [26] Q&A Session Summary Question: Can you discuss the demand and growth goals for the Grand Campus intake? - Management noted that adjustments to the Discover GCU process have led to a significant increase in conversion rates, with registrations ahead of last year [39][41] Question: What are the academic outcomes for ABSN students? - The outcomes reported are for all ABSN students, with high success rates for those entering the program [42][44] Question: What is the status of the GCU contract? - The GCU contract continues without expiration, with discussions about early extension due to positive outcomes [50][51] Question: How many hybrid locations are currently open? - There are currently 45 hybrid sites open, with plans to open 6 to 8 more per year [52] Question: What are the impacts of regulatory changes on the company? - Management indicated that the focus on outcomes in education aligns well with the company's model, which is producing strong results [56][65] Question: Any updates on the court ruling regarding nonprofit status? - The court ruled in favor of GCU, affirming its nonprofit status, and the case has been remanded back to the Department of Education [67][70] Question: Will the hybrid pillar return to profitability in 2025? - Management expects the hybrid pillar to cross back to profitability in 2025 based on current site margins [71]