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Grand Canyon Education, Inc. Reports Fourth Quarter 2024 Results

Grand Canyon Education, Inc. (NASDAQ: LOPE), an established provider of education services, has announced its fourth quarter 2024 financial outcomes, reporting a substantial rise in service revenue and profits, heavily driven by increased enrollments at Grand Canyon University (GCU) and the implementation of efficient operational strategies.

Revenue Performance

For the quarter ending December 31, 2024, GCE achieved service revenue of $292.6 million, indicating a 5.1% increase from the previous year's $278.3 million. This revenue uplift is attributed primarily to a 5.0% rise in enrollments at GCU, which reached 123,149 students. The year-on-year revenue boost is also due to higher revenue per student, particularly from programs such as the Accelerated Bachelor of Science in Nursing (ABSN), where tuition fees from off-campus sites contribute significantly.

However, it's notable that service revenue was affected by the earlier start of GCU’s Fall semester in 2024, which resulted in a $2.2 million revenue shift from the fourth quarter into the third quarter. This, alongside contract changes with partners leading to lower revenue shares, slightly dampened expectations.

Enrollment Growth

Exeeding expectations, total university partner enrollments surged to 127,155 compared to 121,250 a year prior. Off-campus classroom enrollments saw a notable increase of 9.8%, and even more impressively, enrollments at new sites grew by 14.9% when adjusted for closures. Despite a marginal decrease in traditional ground students at GCU, the shift towards online learning and ABSN programs has balanced out the numbers.

The surge in GCU online students increased by 7.1%, rising from 92,070 to 98,597 - reflecting a robust demand for flexible education formats in today's transformative learning environment.

Operating and Net Income Growth

Operating income for the same quarter also improved, reaching $100.0 million, a 2.3% increase from $97.8 million in 2023. Despite this gain, the operating margin slipped slightly from 35.1% to 34.2%, with impairment charges impacting net performance.

The company's after-tax profits reflected a rise, with net income reaching $81.9 million, up 1.4% from the past year's $80.7 million. When adjusted, the net income for the quarter accounted for $85.1 million compared to $82.5 million in 2023, showcasing consistent growth and stability. Notably, diluted net income per share saw an increase from $2.71 to $2.84 on a GAAP basis.

Annual Highlights

Looking at the full year, GCE’s total service revenue for 2024 was approximately $1.033 billion, a notable 7.5% increase from $960.9 million in 2023. This figure was underpinned by steady growth in GCU enrollments and continued optimization in service offerings to partner institutions.

Moreover, adjusted EBITDA rose to $340 million for 2024, translating to a 12.5% growth, reflecting operational efficiency and effective management practices implemented by GCE.

Future Outlook

Looking ahead to Q1 2025, GCE expects service revenue to fall between $286.5 million and $287.5 million, alongside operating margins rising slightly to approximately 30%. The company forecasts an effective tax rate of 22.2%, demonstrating its strategic planning for optimal financial performance.

As for the full year 2025, GCE anticipates service revenue to be between $1.074 billion and $1.097 billion, with diluted earnings expected between $8.20 and $8.59 per share.

Grand Canyon Education continues to bolster its position in the education sector, with substantial plans set in motion for future growth and enhanced educational offerings. The company’s strategic focus on expanding its university partnerships and improving technological infrastructure paves the way for sustained success in the evolving landscape of higher education.

GCE's continuous commitment to providing quality educational services alongside remarkable financial growth demonstrates its vital role in shaping the future of education in the United States.