Grand Canyon Education, Inc. Q4 FY2025 earnings call

• Brian Mueller discussed strong quarter with online enrollment growth 8.7% and hybrid growth (excluding closed sites and teach-out) 18.7%. GCU's growth from brink of bankruptcy to largest private university in America. Built 47 hybrid campuses for healthcare and a Workforce Development Center for construction and manufacturing. AI products across colleges and operational areas, students excelling in exams and project work. Online campus new starts in mid-single digits in Q4 2025, rolling out new programs. GCU ground campus new traditional enrollments up in high single digits, but total traditional enrollments down slightly year-over-year in fall 2025. Hybrid campus enrollment growth due to ABSN programs and new sites. Center for Workforce Development programs in various fields. • Dan Bachus talked about non-GAAP financial info, service revenue higher than expected, effective tax rate, share repurchases, balance sheet, CapEx, and guidance with ranges for 2026.

Online campus at Grand Canyon University: New starts up in mid-single digits in Q4 2025, total enrollment growth 8.7%. GCU ground campus: New traditional campus enrollments up in high single digits, total traditional campus enrollments down slightly year-over-year in fall 2025 but flat year-over-year overall. Grand Canyon Education's hybrid campus: Enrollment up 16.6% year-over-year in Q4, excluding closed sites and teach-out, up 18.7%. Center for Workforce Development at GCU: Has 4 programs, rolling out 5th in fall 2026. Service revenue for Q4 2025 was $308.1 million, up 5.3% from Q4 2024. Operating income $108.1 million and operating margin 35.1% for 3 months ended Dec 31, 2025.

• 2025's financial performance exceeded original estimates. Provided ranges for revenue, operating margin, and earnings per share for each quarter of 2026. Revenue slightly impacted in 2026 due to contract modification and teach-out. Year-over-year changes in semesters move revenue between quarters. Anticipate new online enrollments up mid- to high single digits in 2026. Hybrid growth impacted by capacity and new enrollments. Margin expansion expected in 2026 despite some pressures. Interest income to decline in 2026. Effective tax rate for 2026 has ranges. Weighted average shares guidance considers share repurchases.

Q: Revenue of $308.1 million was above estimate, was the impact from government shutdown about $3 million?

A: I think it was a little bit lower than that, but probably in the $2.5 million to $3 million range.

Q: On operating income and margin in Q4, additional color?

A: Brian mentioned heavy investment in ground campus recruitment, spent on high school reps and marketing, saw great results with increased conversion rates.

Q: Update on corporate programs?

A: Work with 5,500 employers, ~1/3 of GCU starts from corporate relationships, signing agreements with school districts, applying to counseling and social work areas.

Q: Regulatory environment impact?

A: Loan caps and earnings premium accountability calculation expected to have little to no impact, especially at bachelor's level where majority of programs are. For graduate programs, different situation but changes help manage borrowing.