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Sep 30, 2025
Grand Canyon Education Q3 2025 Earnings Report
Grand Canyon Education reported its third quarter 2025 results, with service revenue increasing by 9.6% and adjusted EBITDA growing by 14.4%. However, operating income and net income saw significant declines due to a litigation settlement reserve.
Key Takeaways
Grand Canyon Education, Inc. delivered a mixed performance in the third quarter of 2025. While service revenue grew by 9.6% to $261.1 million and adjusted EBITDA increased by 14.4% to $75.9 million, GAAP operating income and net income experienced substantial decreases of 62.6% and 60.8% respectively, primarily due to a $35.0 million litigation settlement reserve.
Service revenue for Q3 2025 increased by 9.6% to $261.1 million, up from $238.3 million in Q3 2024, driven by a 7.9% increase in partner enrollments.
Operating income significantly decreased by 62.6% to $18.0 million in Q3 2025, compared to $48.2 million in the prior year, largely due to a $35.0 million reserve for litigation settlement.
Net income for Q3 2025 fell by 60.8% to $16.3 million, down from $41.5 million in Q3 2024, impacted by the litigation settlement and other non-recurring costs.
Adjusted EBITDA showed strong growth, increasing by 14.4% to $75.9 million in Q3 2025, indicating solid underlying operational performance when excluding one-time charges.
Revenue by Segment
Forward Guidance
Grand Canyon Education provided a positive outlook for Q4 and the full year 2025, projecting continued revenue growth and strong adjusted diluted EPS, despite anticipating ongoing impacts from non-GAAP adjustments.
Positive Outlook
- Q4 2025 service revenue is projected to be between $305.0 million and $310.0 million, indicating continued growth.
- Full Year 2025 service revenue is expected to be between $1,103.0 million and $1,108.0 million.
- Q4 2025 operating margin is guided to be strong, between 35.1% and 35.8%.
- Full Year 2025 adjusted non-GAAP diluted income per share is projected to be between $9.02 and $9.13, reflecting robust underlying profitability.
- Q4 2025 diluted EPS is expected to be between $3.07 and $3.18, with adjusted non-GAAP diluted income per share between $3.13 and $3.24.
Challenges Ahead
- Full Year 2025 diluted EPS guidance includes a significant $1.36 impact from non-cash amortization of intangible assets, litigation reserve, lease termination, impairment costs, severance costs, and loss on disposal of assets.
- The full year operating margin guidance of 24.0% to 24.3% is lower than the adjusted operating margin for Q3 2025, suggesting continued pressure from certain costs.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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