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Jun 30, 2020
Grand Canyon Education Q2 2020 Earnings Report
Second quarter results of 2020 were announced.
Key Takeaways
Grand Canyon Education reported a service revenue increase of 6.3% year over year, primarily due to increased enrollments at university partners, but operating income decreased due to reduced ancillary revenues at GCU and fewer revenue-producing days.
Service revenue increased by 6.3% year-over-year to $185.8 million.
End-of-period enrollment in university partner programs increased by 8.2% to 98,326.
Operating income decreased to $48.3 million with an operating margin of 26.0%.
Net income decreased to $47.0 million, with diluted net income per share at $1.00.
Revenue by Segment
Forward Guidance
The company provided financial outlook for Q3 2020, Q4 2020 and full year 2020
Positive Outlook
- Net revenue of $197.5 million for Q3 2020
- As Adjusted Operating Margin 26.3% for Q3 2020
- As Adjusted Diluted EPS of $1.11 for Q3 2020 using 47.2 million diluted shares
- Net revenue of $237.5 million for Q4 2020
- As Adjusted Operating Margin 40.1% for Q4 2020
Challenges Ahead
- As Adjusted Diluted EPS of $1.80 for Q4 2020 using 47.2 million diluted shares
- Net revenue of $842.4 million for full year 2020
- As Adjusted Operating Margin 33.3% for full year 2020
- As Adjusted Diluted EPS of $5.47 for full year 2020 using 47.3 million diluted shares
- We estimate that the shift in net revenue from the third quarter to the fourth quarter as a result of the shift in the start date of the GCU Fall semester is $9.9 million lower revenue in the third quarter and $9.9 million higher revenue in the fourth quarter.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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