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, 2024


☐	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 3, 2024, was 29,738,382.

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	19
Item 3 Quantitative and Qualitative Disclosures About Market Risk	25
Item 4 Controls and Procedures	25

PART II – OTHER INFORMATION	25

Item 1 Legal Proceedings	25
Item 1A Risk Factors	26
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3 Defaults Upon Senior Securities	26
Item 4 Mine Safety Disclosures	26
Item 5 Other Information	26
Item 6 Exhibits	27
SIGNATURES	28

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)	2024		2023
Service revenue	$	274,675	$	250,125
Costs and expenses:
Technology and academic services		39,125		37,512
Counseling services and support		82,884		73,349
Marketing and communication		55,353		52,894
General and administrative		10,730		9,788
Amortization of intangible assets		2,105		2,105
Total costs and expenses		190,197		175,648
Operating income		84,478		74,477
Interest expense		(2)		(19)
Investment interest and other		3,729		2,153
Income before income taxes		88,205		76,611
Income tax expense		20,195		17,047
Net income	$	68,010	$	59,564
Earnings per share:
Basic income per share	$	2.31	$	1.96
Diluted income per share	$	2.29	$	1.94
Basic weighted average shares outstanding		29,459		30,461
Diluted weighted average shares outstanding		29,639		30,638

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)	2024		2023
	(Unaudited)
ASSETS:
Current assets
Cash and cash equivalents	$	196,208	$	146,475
Investments		94,485		98,031
Accounts receivable, net		111,710		78,811
Insurance receivable		25,500		—
Income tax receivable		38		1,316
Other current assets		16,512		12,889
Total current assets		444,453		337,522
Property and equipment, net		172,186		169,699
Right-of-use assets		90,135		92,454
Amortizable intangible assets, net		166,276		168,381
Goodwill		160,766		160,766
Other assets		1,755		1,641
Total assets	$	1,035,571	$	930,463
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities
Accounts payable	$	29,827	$	17,676
Accrued compensation and benefits		24,785		31,358
Accrued liabilities		57,608		26,725
Income taxes payable		26,300		10,250
Deferred revenue		10,270		—
Current portion of lease liability		11,336		11,024
Total current liabilities		160,126		97,033
Deferred income taxes, noncurrent		28,454		26,749
Other long-term liability		1,583		410
Lease liability, less current portion		85,961		88,257
Total liabilities		276,124		212,449
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000 shares authorized; 0 shares issued and outstanding at March 31, 2024 and December 31, 2023		—		—
Common stock, $0.01 par value, 100,000 shares authorized; 54,087 and 53,970 shares issued and 29,839 and 29,953 shares outstanding at March 31, 2024 and December 31, 2023, respectively		541		540
Treasury stock, at cost, 24,248 and 24,017 shares of common stock at March 31, 2024 and December 31, 2023, respectively		(1,879,697)		(1,849,693)
Additional paid-in capital		325,994		322,512
Accumulated other comprehensive loss		(113)		(57)
Retained earnings		2,312,722		2,244,712
Total stockholders’ equity		759,447		718,014
Total liabilities and stockholders’ equity	$	1,035,571	$	930,463

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)	2024		2023
Net income	$	68,010	$	59,564
Other comprehensive income, net of tax:
Unrealized (losses) gains on available-for-sale securities, net of taxes of $18 and $37 for the three months ended March 31, 2024 and 2023, respectively		(56)		119
Comprehensive income	$	67,954	$	59,683

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, 2024
									Accumulated
							Additional		Other
	Common Stock			Treasury Stock			Paid-in		Comprehensive		Retained
	Shares	Par Value		Shares	Cost		Capital		Loss		Earnings		Total
Balance at December 31, 2023	53,970	$	540	24,017	$	(1,849,693)	$	322,512	$	(57)	$	2,244,712	$	718,014
Comprehensive income	—		—	—		—		—		(56)		68,010		67,954
Common stock purchased for treasury	—		—	172		(22,558)		—		—		—		(22,558)
Restricted shares forfeited	—		—	4		—		—		—		—		—
Share-based compensation	117		1	55		(7,446)		3,482		—		—		(3,963)
Balance at March 31, 2024	54,087	$	541	24,248	$	(1,879,697)	$	325,994	$	(113)	$	2,312,722	$	759,447


	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

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)


	Three Months Ended
	March 31,
(In thousands)	2024		2023
Cash flows provided by operating activities:
Net income	$	68,010	$	59,564
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation		3,483		3,369
Depreciation and amortization		6,653		5,537
Amortization of intangible assets		2,105		2,105
Deferred income taxes		1,724		1,816
Other, including fixed asset disposals		(208)

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