Grand Canyon Education, Inc. Q1 FY2026 earnings call

• GCE had strong quarter with online enrollment growth 8.8% and hybrid growth (excluding closed sites and teach-out) 20.3%. - GCU gone from brink of bankruptcy to largest private university in America, with over 110,000 online students, 25,000 on-campus, and most students in university-owned housing. - Built 47 hybrid campuses for healthcare fields and a workforce development center for construction and manufacturing. - GCE and partners have flexible model using advanced tech. - GCU has dozens of AI products across colleges, programs, etc. Students' exam scores in various areas at all-time highs. - Online campus new starts up in high single digits, total enrollment growth exceeds long-term objectives. Work with over 5,500 employers for workforce shortages. - GCU ground campus has made marketing strategy changes, registrations for fall 2026 ahead. Honors college announcement with high incoming GPAs and plans for growth. - Hybrid campus enrollment growth due to advanced standing student programs, 47 sites as of Dec 31, 2025, plans to open 1-2 more sites in 2026, expand programmatic offerings. - Center for Workforce Development has 4 programs, with fifth launching, students completing programs and becoming eligible for employment.

Online campus at Grand Canyon University: New starts up in high single digits in Q1 2026, total enrollment growth 8.8%. GCU ground campus: Total traditional campus enrollments down slightly year over year in spring 2026, but registrations for fall 2026 remain ahead of last year. Hybrid campus: Enrollment up 18.3% year over year in Q1, excluding closed sites and teach-outs, up 20.3%. Excluding teach-outs, hybrid campus new starts up 20% over prior year. Center for Workforce Development at GCU: Has 4 programs, with a fifth to launch in fall 2026. Service revenue for Q1 2026 was $308.8 million, an increase of $19.5 million or 6.7% compared to Q1 2025. Operating income for Q1 2026 was $95.5 million with an operating margin of 30.9%. Net income was $75.3 million. GAAP diluted income per share for Q1 2026 was $2.80. As adjusted, non-GAAP diluted income per share was $2.96.

• Updated full year 2026 guidance to include first quarter revenue and earning beats, reaffirming revenue and operating income guidance for rest of 2026. - Slightly decreasing interest income and weighted average share count due to stock buybacks. - Estimated revenue reduction in 2026 due to contract modification and teach-out, but long-term positives. - Anticipate online revenue per student slightly down year-over-year. - Revenue shift between quarters due to semester start and end date changes. - Anticipate new online enrollments up mid to high single digits in 2026. - Revenue range for GCU ground enrollment: summer 8,500 - 8,800, fall 24.9 - 25.6. - Hybrid pillar new and total enrollment growth predicted high single digits to mid-teens in 2026 quarters, impacted by capacity. - Expense side: Continue investments but anticipate margin expansion, online programs for licensure putting pressure on margins, technology services and benefit costs increasing, some margin pressure in first six months and third quarter. - Interest income expected to decline in 2026. - Effective tax rate estimates for remaining quarters and full year 2026.

Q: Focus on first quarter adjusted operating margin beat, color on what drove it.

A: Revenue beat drove it, managing expenses tight and investing where needed, no expense shift timing.

Q: Ai impact on lead generation, impact on GCE.

A: Web leads shrinking, spending money in other places to replace, getting 30% of new starts from working directly with partners, looking to move to 40% in next five years, margin expansion from reducing cost per start, honors college to strengthen brand.

Q: GCU Ground marketing strategy progress.

A: Continuing to invest in advertising strategies, registrations and housing up but competitive, next step is to increase academic excellence and visibility through Honors College.

Q: Update on nursing enrollment.

A: Pre-licensure doing very well, post-licensure had reacceleration in quarter, growth expected to continue with adjustments in product, pricing, placement, etc.