Grand Canyon Education reported total service revenue of $308.1 million for the quarter ended December 31 2025, a 5.3 % increase from $292.6 million in the same period last year. GAAP diluted earnings per share were $3.14, slightly below the consensus estimate of $3.19 but in line with the $3.13 estimate that had been widely cited. The modest miss is largely attributable to a one‑time charge related to a litigation settlement reserve of $35 million, which reduced earnings without affecting operating performance.
Enrollment growth remained the primary driver of revenue expansion. Online enrollment rose 8.7 % year‑over‑year, while the hybrid campus segment grew 18.7 % excluding closed sites, as noted by Chairman and CEO Brian Mueller: "GCE had another strong quarter, producing online enrollment growth of 8.7% and hybrid growth, excluding the closed sites and those in teach‑out of 18.7%." The mix shift toward higher‑margin hybrid programs helped lift operating income to $108 million, up from $100 million in Q4 2024, and expanded operating margin to 35.1 % from 34.2 %.
Capital expenditures for the quarter were $7.6 million, a figure that reflects the company’s focus on technology upgrades and campus expansion. The company also maintained a strong balance sheet, setting aside a $35 million litigation settlement reserve and completing $155.2 million of share repurchases in the first nine months of 2025. Chief Financial Officer Daniel Bachus highlighted the company’s disciplined capital allocation: "We anticipate CapEx for 2026 will be between $30 million and $35 million." He also noted the impact of the federal government shutdown on military tuition assistance was "slightly lower than anticipated, landing in the $2.5 million to $3 million range."
Management reiterated its 2026 outlook, maintaining guidance for total service revenue of $1,167.5 million to $1,189.0 million, operating margin of 27.5 % to 28.8 %, and diluted EPS of $9.79 to $10.40. The guidance reflects confidence in continued enrollment momentum and the ability to sustain margin expansion through the hybrid campus model, while acknowledging the need to manage cost inflation and competitive pressures.
Investor sentiment following the release was mixed. While the company’s earnings beat on non‑GAAP adjusted EPS and strong enrollment growth were viewed positively, the GAAP EPS miss and the headwinds noted by management—such as the impact of the government shutdown on military tuition assistance and the teach‑out of certain partner sites—generated caution among some investors. The company’s focus on technology investment and hybrid expansion, however, signals a strategic effort to strengthen its competitive position in a challenging education‑services market.
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