UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

	For the quarterly period ended March 31, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from to

Commission File Number: 001-34211

GRAND CANYON EDUCATION, INC.

(Exact name of registrant as specified in its charter)


Delaware		20-3356009
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

2600 W. Camelback Road

Phoenix, Arizona 85017

(Address, including zip code, of principal executive offices)

(602) 247-4400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	LOPE	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:


Large Accelerated Filer ☒		Accelerated Filer ☐
Non-accelerated Filer ☐		Smaller Reporting Company ☐
		Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The total number of shares of common stock outstanding as of May 1, 2023, was 30,726,036.

Table of Contents

GRAND CANYON EDUCATION, INC.

FORM 10-Q

INDEX


	Page
PART I – FINANCIAL INFORMATION	3

Item 1 Financial Statements	3
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3 Quantitative and Qualitative Disclosures About Market Risk	26
Item 4 Controls and Procedures	26

PART II – OTHER INFORMATION	27

Item 1 Legal Proceedings	27
Item 1A Risk Factors	27
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3 Defaults Upon Senior Securities	28
Item 4 Mine Safety Disclosures	28
Item 5 Other Information	28
Item 6 Exhibits	29
SIGNATURES	31

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements

GRAND CANYON EDUCATION, INC.

Consolidated Income Statements

(Unaudited)


	Three Months Ended
	March 31,
(In thousands, except per share data)	2023		2022
Service revenue	$	250,125	$	244,133
Costs and expenses:
Technology and academic services		37,512		36,306
Counseling services and support		73,349		67,513
Marketing and communication		52,894		50,851
General and administrative		9,788		9,893
Amortization of intangible assets		2,105		2,105
Total costs and expenses		175,648		166,668
Operating income		74,477		77,465
Interest expense		(19)		—
Investment interest and other		2,153		205
Income before income taxes		76,611		77,670
Income tax expense		17,047		19,592
Net income	$	59,564	$	58,078
Earnings per share:
Basic income per share	$	1.96	$	1.67
Diluted income per share	$	1.94	$	1.66
Basic weighted average shares outstanding		30,461		34,806
Diluted weighted average shares outstanding		30,638		34,901

The accompanying notes are an integral part of these consolidated financial statements.

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GRAND CANYON EDUCATION, INC.

Consolidated Balance Sheets


	March 31,		December 31,
(In thousands, except par value)	2023		2022
	(Unaudited)
ASSETS:
Current assets
Cash and cash equivalents	$	105,040	$	120,409
Investments		89,483		61,295
Accounts receivable, net		102,571		77,413
Income tax receivable		2,964		2,788
Other current assets		15,828		11,368
Total current assets		315,886		273,273
Property and equipment, net		150,391		147,504
Right-of-use assets		70,320		72,719
Amortizable intangible assets, net		174,695		176,800
Goodwill		160,766		160,766
Other assets		1,963		1,687
Total assets	$	874,021	$	832,749
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities
Accounts payable	$	21,801	$	20,006
Accrued compensation and benefits		21,124		36,412
Accrued liabilities		31,661		22,473
Income taxes payable		26,568		12,167
Deferred revenue		9,678		—
Current portion of lease liability		8,818		8,648
Total current liabilities		119,650		99,706
Deferred income taxes, noncurrent		28,049		26,195
Other long-term liability		429		436
Lease liability, less current portion		66,643		68,793
Total liabilities		214,771		195,130
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000 shares authorized; 0 shares issued and outstanding at March 31, 2023 and December 31, 2022		—		—
Common stock, $0.01 par value, 100,000 shares authorized; 53,966 and 53,830 shares issued and 30,823 and 31,058 shares outstanding at March 31, 2023 and December 31, 2022, respectively		540		538
Treasury stock, at cost, 23,143 and 22,772 shares of common stock at March 31, 2023 and December 31, 2022, respectively		(1,752,844)		(1,711,423)
Additional paid-in capital		312,677		309,310
Accumulated other comprehensive loss		(414)		(533)
Retained earnings		2,099,291		2,039,727
Total stockholders’ equity		659,250		637,619
Total liabilities and stockholders’ equity	$	874,021	$	832,749

The accompanying notes are an integral part of these consolidated financial statements.

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GRAND CANYON EDUCATION, INC.

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended
	March 31,
(In thousands)	2023		2022
Net income	$	59,564	$	58,078
Other comprehensive income, net of tax:
Unrealized gains (losses) on available-for-sale securities, net of taxes of $37 and $99 for the three months ended March 31, 2023 and 2022, respectively		119		(323)
Comprehensive income	$	59,683	$	57,755

The accompanying notes are an integral part of these consolidated financial statements.

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GRAND CANYON EDUCATION, INC.

Consolidated Statement of Stockholders’ Equity

(In thousands)

(Unaudited)


	Three Months Ended March 31, 2023
									Accumulated
							Additional		Other
	Common Stock			Treasury Stock			Paid-in		Comprehensive		Retained
	Shares	Par Value		Shares	Cost		Capital		Loss		Earnings		Total
Balance at December 31, 2022	53,830	$	538	22,772	$	(1,711,423)	$	309,310	$	(533)	$	2,039,727	$	637,619
Comprehensive income	—		—	—		—		—		119		59,564		59,683
Common stock purchased for treasury	—		—	310		(35,090)		—		—		—		(35,090)
Restricted shares forfeited	—		—	5		—		—		—		—		—
Share-based compensation	136		2	56		(6,331)		3,367		—		—		(2,962)
Balance at March 31, 2023	53,966	$	540	23,143	$	(1,752,844)	$	312,677	$	(414)	$	2,099,291	$	659,250


	Three Months Ended March 31, 2022
									Accumulated
							Additional		Other
	Common Stock			Treasury Stock			Paid-in		Comprehensive		Retained
	Shares	Par Value		Shares	Cost		Capital		Loss		Earnings		Total
Balance at December 31, 2021	53,637	$	536	15,915	$	(1,107,211)	$	296,670	$	—	$	1,855,052	$	1,045,047
Comprehensive income	—		—	—		—		—		(323)		58,078		57,755
Common stock purchased for treasury	—		—	4,575		(394,930)		—		—		—		(394,930)
Restricted shares forfeited	—		—	6		—		—		—		—		—
Share-based compensation	189		2	52		(4,625)		3,188		—		—		(1,435)
Balance at March 31, 2022	53,826	$	538	20,548	$	(1,506,766)	$	299,858	$	(323)	$	1,913,130	$	706,437

The accompanying notes are an integral part of these consolidated financial statements.

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GRAND CANYON EDUCATION, INC.

Consolidated Statements of Cash Flows

(Unaudited)

SEC Form 10-Q filed by Grand Canyon Education Inc.