Grand Canyon Education (LOPE) investor relations material

Executive summary

• Service revenue rose 6.7% YoY to $308.8 million for Q1 2026, driven by a 7.1% increase in university partner enrollments to 136,884 and strong online/hybrid growth.

• Net income increased 5.2% to $75.3 million, with operating income at $95.5 million (30.9% margin) and adjusted EBITDA up 8.5% to $110.7 million.

• Adjusted diluted EPS was $2.86, up from $2.57 YoY and above consensus estimates.

• The company continues to expand university partnerships, off-campus sites, and invest in AI, new programs, and workforce development.

• Share repurchases exceeded $120 million in Q1 2026, impacting liquidity.

Financial highlights

• Operating income grew to $95.5 million, with margin improving to 30.9% from 30.4% YoY.

• Adjusted non-GAAP diluted EPS rose to $2.86 from $2.57 YoY.

• Effective tax rate increased to 23.5% from 21.6% YoY.

• CapEx for Q1 was $8.1 million (2.6% of service revenue); full-year CapEx expected at $30–$35 million.

• Cash and investments totaled $251.7 million as of March 31, 2026, down from year-end 2025 due to share repurchases and CapEx.

Outlook and guidance

• Full-year 2026 revenue and operating income guidance reaffirmed; interest income slightly reduced due to buybacks.

• Revenue growth rate slightly lowered by contract modifications and teach-outs, but margin expansion expected.

• Online enrollment growth projected in mid-to-high single digits for 2026; hybrid pillar enrollment growth expected in high single digits to mid-teens YoY.

• Q2 2026 service revenue expected between $260.0–$264.0 million, with operating margin of 20.1–21.3% and adjusted diluted EPS of $1.63–$1.74.

• Effective tax rate for 2026 forecasted at 24.4%.