Key Highlights

  • Service Revenue was USD 267.35 million against an estimate of USD 270.11 million and USD 261.14 million a year earlier.
  • EPS was USD 1.77 against an estimate of USD 1.76, while GAAP diluted EPS was USD 1.67 versus USD 0.58.
  • University partner enrollments reached 145,270, with university online enrollments at 115,520 and ground enrollments at 23,650.
  • A new USD 100 million revolving Credit Facility was signed, and the repurchase authorization was increased by USD 355 million.

An amended services agreement with Grand Canyon University set the frame for the third quarter at Grand Canyon Education, Inc. (NASDAQ:LOPE), which serves 20 university partners and operates 48 off-campus classroom and laboratory sites. The agreement took effect July 1, 2026, runs through June 30, 2041 and removes the university's ability to terminate for convenience. Service revenue for the quarter was USD 267.35 million, against USD 261.14 million in the third quarter of 2025.

The Amended Agreement and Partner Growth

Under the amended terms, service fees are set at 60% of tuition and academic-related fees only, whereas the original agreement applied 60% to a wider revenue base that included housing, food service, athletics and other ancillary items. Ancillary fees and other revenue are now for the sole benefit of the university, and the reimbursement payment the company had made for certain academic costs was eliminated.

University partner enrollments rose 5.2% to 145,270 from 138,073. Grand Canyon University enrollments increased 5.1% to 139,170, with online enrollments up 7.1% to 115,520 and ground enrollments down 4.1% to 23,650. Enrollments at off-campus classroom and laboratory sites rose 12.6% to 7,780.

Quarterly Results

Operating income was USD 51.47 million against USD 18.02 million a year earlier, when results included a USD 35.0 million litigation settlement and USD 2.4 million of Lease termination and Impairment charges. Net Income was USD 43.01 million against USD 16.27 million, and diluted EPS under GAAP was USD 1.67 against USD 0.58.

By line, technology and academic services expense was USD 43.06 million against USD 44.91 million, which the company tied to the amendment ending academic reimbursement costs. Counseling services and support rose to USD 88.34 million from USD 84.41 million, and Marketing and communication rose to USD 65.45 million from USD 59.15 million, reflecting added Advertising for partner programs and new locations. The effective tax rate was 20.0% against 24.9%.

For the nine months, service revenue was USD 840.15 million and net income was USD 164.21 million, or USD 6.25 per diluted share.

Cash, Credit and Repurchases

Cash and cash equivalents were USD 58.76 million at September 30, against USD 111.76 million at December 31, 2025, and investments were USD 103.38 million against USD 188.32 million. The company said its Liquidity position decreased by USD 137.9 million over the nine months, largely because cash spent on share repurchases and capital expenditures was greater than cash from operations.

On September 28 it entered a USD 100 million senior secured revolving credit facility maturing September 28, 2031, with nothing drawn at quarter end. Management said the facility is intended mainly for share repurchases and general corporate purposes. Share repurchases cost USD 270.8 million in the nine months against USD 155.2 million a year earlier. On October 28 the board approved a USD 355 million increase, raising the aggregate program authorization to USD 2.9 billion, with an expiration date of March 1, 2028.

Stated Priorities Versus Reported Results

Service revenue of USD 267.35 million sits alongside net income of USD 43.01 million and 145,270 partner enrollments, with cash of USD 58.76 million.

Management said it plans to add university partners and programs, including healthcare, online and hybrid offerings, and to keep opening off-campus sites. The repurchase program remains at the company's discretion, with USD 428.55 million available after the October increase, and the amended agreement's 15-year term runs through June 2041.