Grand Canyon Education misses Q3 revenue estimates, profit below forecast

Grand Canyon Education (LOPE) said third-quarter service revenue was $267.35 million, below the $275.51 million consensus estimate. Adjusted earnings of $1.77 per share were below the $1.80 consensus estimate.

The company, incorporated in 2008, provides marketing, enrollment, counseling and other support services to 20 university partners. It reported results for the quarter ended Sept. 30, 2026, in a press release.

Revenue rose 2.4% from a year earlier, when service revenue was $261.14 million. The company said university partner enrollments rose 5.2%.

Here's how the company did:

• Service revenue: $267.35 million vs. $261.14 million a year earlier, $275.51 million expected
• Adjusted EPS: $1.77 vs. $1.78 a year earlier, $1.80 expected
• Diluted EPS: $1.67 vs. $0.58 a year earlier
• Adjusted EBITDA: $73.47 million vs. $75.90 million a year earlier
• Operating margin: 19.3% vs. 6.9% a year earlier

Net income was $43.01 million, compared with $16.27 million a year earlier. The year-earlier quarter included a $35.00 million litigation settlement.

The company said six fewer days of revenue for ground traditional students shifted $7.5 million of revenue from the third quarter into the fourth quarter of 2026.

Enrollment

GCU enrollments reached 139,170 at Sept. 30, 2026, up 5.1% from a year earlier. GCU online enrollments were 115,520, up 7.1%. GCU ground enrollments were 23,650, down 4.1%.

University partner enrollments at off-campus classroom and laboratory sites were 7,780, up 12.6%. The company had 48 sites at the end of the quarter.

Guidance

For the fourth quarter, the company expects service revenue of $320.5 million to $321.5 million, an operating margin of 36.0% to 36.2%, and adjusted diluted EPS of $3.63 to $3.67.

For the full year, the company expects service revenue of $1,160.7 million to $1,161.7 million and an operating margin of 27.6% to 27.7%. It lowered its full-year adjusted EPS forecast to $10.09 to $10.13, from the $10.18 to $10.32 range it gave on July 30.

Cash and buybacks

Unrestricted cash, cash equivalents and investments were $162.1 million at Sept. 30, 2026, down from $300.1 million at Dec. 31, 2025. The company said cash spent on share repurchases and capital expenditures exceeded cash from operations in the nine months.

On Oct. 28, 2026, the board approved a $355.0 million increase to the existing repurchase program, bringing the aggregate authorization since its start to $2.9 billion. As of Nov. 2, $394.5 million remained available under the current authorization, which expires March 1, 2028. The company had 25,510,517 shares outstanding on Nov. 2.