#USA #Inc. #Phoenix #Grand Canyon Education #GCE #NASDAQ LOPE

Grand Canyon Education, Inc. Third Quarter 2025 Results

On November 5, 2025, Grand Canyon Education, Inc. (GCE), listed on NASDAQ as LOPE, announced its financial results for the third quarter ended September 30, 2025. As a key player in the education services sector, GCE provides critical support to twenty university partners, showcasing a diverse range of services designed to optimize educational outcomes.

Financial Highlights

In Q3 2025, GCE reported service revenue of $261.1 million, marking a 9.6% increase from $238.3 million reported in Q3 2024. This growth is attributed to a 7.9% rise in partner enrollments, reaching a total of 138,073 students compared to 127,977 the previous year. However, revenue generated per student encountered a slight decline due to contract modifications with some university partners, alongside a shift towards a student demographic with lower net tuition rates.

Importantly, GCE benefitted from an extra day of revenue for the ground campus at Grand Canyon University (GCU), which contributed positively to revenue figures this quarter.

Despite the impressive increase in service revenue, operating income was hit hard, decreasing by 62.6% to $18.0 million from $48.2 million in Q3 2024. The operational margin fell significantly from 20.2% to 6.9% due to several extraordinary expenses, including a $35 million reserve set aside for a litigation settlement, alongside various lease and severance costs that collectively impacted profitability. Excluding these unusual expenses, adjusted operating income stood at $58.2 million, reflecting a stronger operational margin of 22.3%.

Growth in Enrollment Despite Operational Adjustments

Enrolment figures reveal significant growth in both traditional and online platforms at GCU. Total GCU enrollments rose by 7.7%, reaching 132,486 students. The off-campus classroom and laboratory sites also experienced an increase of 17.4%, bringing their total enrolment to 6,912 students. Efforts to open new instructional sites also seem to be fruitful, with the count of operational sites standing at 47 as of September 30, 2025, after opening five new locations this year.

The financial performance demonstrates GCE's ability to effectively adapt and respond to educational trends, achieving an impressive adjusted EBITDA growth of 14.4%, reaching $75.9 million compared to $66.3 million in the same period last year.

A Look Ahead: Fourth Quarter and Full Year Outlook

GCE provided guidance for the upcoming quarter, projecting service revenue of between $305.0 million and $310.0 million, with an anticipated operating margin hovering between 35.1% and 35.8%. The effective tax rate is expected to be 22.8%, and diluted earnings per share (EPS) forecasted in the range of $3.07 to $3.18.

For the entire year, GCE expects service revenue to land between $1,103 million and $1,108 million, with diluted EPS projected between $7.66 and $7.77. These figures reflect GCE's strategic objectives and ongoing commitment to enhancing growth through operational efficiency and expanded educational partnerships.

Conclusion

The third quarter of 2025 for Grand Canyon Education, Inc. reveals a compelling narrative of growth amidst significant operational challenges. GCE's commitment to educational excellence, strategic adjustments in business operation, and overall resiliency in response to market changes showcase the company’s robust presence in the education services industry.