In This Article:
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Service Revenue: $289.3 million for Q1 2025, up 5.3% from $274.7 million in Q1 2024.
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Operating Income: $88 million for Q1 2025.
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Operating Margin: 30.4% for Q1 2025, compared to 30.8% in Q1 2024.
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Net Income: $71.6 million for Q1 2025, a 5.3% increase from $68 million in Q1 2024.
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GAAP Diluted EPS: $2.52 for Q1 2025.
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Non-GAAP Diluted EPS: $2.57 for Q1 2025, $0.05 above consensus estimates.
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Online Enrollment Growth: 7.9% increase in Q1 2025.
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Hybrid Enrollment Growth: 16.5% increase year-over-year, excluding closed sites and teach-outs.
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CapEx: Approximately $8.9 million or 3.1% of service revenue for Q1 2025.
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Share Repurchase: 395,426 shares repurchased in Q1 2025 at a cost of approximately $68.4 million.
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Total Cash and Investments: $304.7 million as of March 31, 2025.
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Grand Canyon Education Inc (NASDAQ:LOPE) reported strong online enrollment growth of 7.9% and hybrid growth of 16.5%, exceeding expectations.
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The company has successfully launched 48 new programs since January 2023, directly tied to labor market opportunities, enhancing its competitive edge.
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Retention rates have improved, attributed to the relevancy of programs and their alignment with students' career aspirations.
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Grand Canyon Education Inc (NASDAQ:LOPE) has maintained competitive tuition rates, with overall online net tuition rates decreasing, which is attractive to students.
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The company is expanding its hybrid campus locations, with plans to open five additional sites in 2025, indicating growth and increased capacity.
Negative Points
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Traditional campus enrollments were down slightly year-over-year, indicating challenges in attracting new students to the ground campus.
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Revenue per student decreased year-over-year, partly due to contract modifications and the impact of the previous leap year.
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Operating margin slightly declined due to increased benefit costs and investments in partner initiatives.
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The company anticipates continued pressure on total online enrollments due to increasing graduations and a decline in reentries.
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Higher state income taxes are expected to continue impacting the effective tax rate, potentially affecting profitability.
Q & A Highlights
Q: In your prepared remarks, you mentioned better-than-expected enrollment in the first quarter. Can you provide more details on where this growth came from? A: Brian Mueller, CEO: The growth is due to increased lead flow and interest in our new programs, which many competitors can't match. Additionally, we've signed contracts with school districts, hospitals, and military bases, creating opportunities for working adults to return to school.