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Mar 31, 2020
Grand Canyon Education Q1 2020 Earnings Report
Grand Canyon Education's first quarter results were announced.
Key Takeaways
Grand Canyon Education reported a service revenue of $221.7 million for the first quarter of 2020, compared to $197.3 million for the first quarter of 2019, representing a 12.4% increase. The company's operating income increased to $80.8 million, while net income decreased slightly to $71.4 million. Diluted net income per share was $1.49, and adjusted diluted net income per share was $1.53.
Service revenue increased by 12.4% year over year, reaching $221.7 million.
End-of-period enrollment in university partner programs increased by 5.8% to 107,591.
Operating income increased to $80.8 million, with an operating margin of 36.5%.
Net income decreased slightly to $71.4 million, with a diluted net income per share of $1.49.
Revenue by Segment
Forward Guidance
The company expects lower service revenues under both the Master Services Agreement with GCU and under the Orbis Education’s services agreements for the second and third quarters of 2020.
Challenges Ahead
- Traditional ground university students that elected to move off campus are receiving partial refunds for dormitory and meal payments related to the Spring semester.
- Ancillary businesses such as the hotel, golf course, and merchandise shops were closed in late March, which reduced and will continue to reduce GCU’s revenues.
- Summer semester classes will be moved to an online environment and limited residential students are expected.
- GCU’s doctoral students are required to attend two residencies on the university’s campus and at its hotel in Phoenix, Arizona as part of their dissertation.
- The decision by a number of the Orbis Education’s university partners to cancel or postpone the Summer and/or Fall semesters would have a material impact on the service revenue earned by the Company.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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