GRAND CANYON EDUCATION, INC. REPORTS SECOND QUARTER 2024 RESULTS
Grand Canyon Education (NASDAQ: LOPE) reported strong Q2 2024 results, with service revenue increasing 8.0% to $227.5 million. The company saw a 7.0% rise in GCU enrollments to 102,676 and a 12.1% increase in off-campus enrollments to 4,377. Net income grew 20.4% to $34.9 million, with diluted EPS rising to $1.19. Adjusted EBITDA increased 22.6% to $58.5 million.
For the first half of 2024, service revenue rose 9.0% to $502.1 million, with net income up 16.2% to $102.9 million. The company's liquidity position improved, with cash and investments increasing by $97.3 million to $341.8 million. GCE provided a positive outlook for Q3, Q4, and full-year 2024, projecting continued growth in service revenue and earnings.
Grand Canyon Education (NASDAQ: LOPE) ha riportato risultati solidi per il secondo trimestre del 2024, con ricavi per servizi in aumento dell'8,0% a $227,5 milioni. L'azienda ha registrato un aumento del 7,0% nelle iscrizioni a GCU, raggiungendo le 102.676, e un incremento del 12,1% nelle iscrizioni off-campus, arrivando a 4.377. L'utile netto è cresciuto del 20,4% a $34,9 milioni, con un utile per azione diluito che sale a $1,19. L'EBITDA rettificato è aumentato del 22,6% a $58,5 milioni.
Per la prima metà del 2024, i ricavi da servizi sono aumentati del 9,0% a $502,1 milioni, con un utile netto in crescita del 16,2% a $102,9 milioni. La posizione di liquidità dell'azienda è migliorata, con liquidità e investimenti aumentati di $97,3 milioni a $341,8 milioni. GCE ha fornito un outlook positivo per il terzo e quarto trimestre, oltre che per l'intero anno 2024, prevedendo una continua crescita dei ricavi da servizi e degli utili.
Grand Canyon Education (NASDAQ: LOPE) informó resultados sólidos para el segundo trimestre de 2024, con ingresos por servicios aumentando un 8.0% a $227.5 millones. La compañía vio un aumento del 7.0% en las inscripciones de GCU a 102,676 y un incremento del 12.1% en las inscripciones fuera del campus a 4,377. El ingreso neto creció un 20.4% a $34.9 millones, con un EPS diluido que subió a $1.19. El EBITDA ajustado aumentó un 22.6% a $58.5 millones.
Para la primera mitad de 2024, los ingresos por servicios aumentaron un 9.0% a $502.1 millones, con el ingreso neto subiendo un 16.2% a $102.9 millones. La posición de liquidez de la empresa mejoró, con efectivo e inversiones aumentando en $97.3 millones a $341.8 millones. GCE proporcionó una perspectiva positiva para el tercer y cuarto trimestre y todo el año 2024, proyectando un crecimiento continuo en ingresos por servicios y ganancias.
그랜드 캐니언 교육(나스닥: LOPE)은 2024년 2분기 강력한 실적을 보고하였으며, 서비스 수익이 8.0% 증가하여 2억 2,750만 달러에 달했습니다. 회사는 GCU 등록이 7.0% 증가하여 102,676명이 되었고, 캠퍼스 외 등록이 12.1% 증가하여 4,377명이 되었습니다. 순익은 20.4% 증가하여 3,490만 달러에 도달하였고, 희석 기준 주당순이익(EPS)은 1.19달러로 증가했습니다. 조정된 EBITDA는 22.6% 증가하여 5,850만 달러에 달했습니다.
2024년 상반기 동안 서비스 수익은 9.0% 증가하여 5억 21만 달러에 이르렀고, 순익은 16.2% 증가하여 1억 2,290만 달러에 이르렀습니다. 회사의 유동성 위치가 개선되었으며, 현금 및 투자가 9,730만 달러 증가하여 3억 4,180만 달러에 달했습니다. GCE는 3분기, 4분기 및 2024년 전체에 대한 긍정적인 전망을 제공하며, 서비스 수익과 이익의 지속적인 성장을 예상하고 있습니다.
Grand Canyon Education (NASDAQ: LOPE) a annoncé des résultats solides pour le deuxième trimestre de 2024, avec des revenus de services en hausse de 8,0 % à 227,5 millions de dollars. L'entreprise a enregistré une augmentation de 7,0 % des inscriptions à GCU, atteignant 102 676, et une augmentation de 12,1 % des inscriptions hors campus, totalisant 4 377. Le bénéfice net a augmenté de 20,4 % atteignant 34,9 millions de dollars, tandis que le bénéfice par action dilué est passé à 1,19 dollar. L'EBITDA ajusté a augmenté de 22,6 % à 58,5 millions de dollars.
Pour le premier semestre 2024, les revenus de services ont augmenté de 9,0 % pour atteindre 502,1 millions de dollars, avec un bénéfice net en hausse de 16,2 % atteignant 102,9 millions de dollars. La position de liquidité de l'entreprise s'est améliorée, les liquidités et les investissements ayant augmenté de 97,3 millions de dollars pour atteindre 341,8 millions de dollars. GCE a fourni des prévisions positives pour le troisième et quatrième trimestre, ainsi que pour l'année entière 2024, projetant une croissance continue des revenus de services et des bénéfices.
Grand Canyon Education (NASDAQ: LOPE) meldete starke Ergebnisse im 2. Quartal 2024, mit einem Anstieg des Serviceumsatzes um 8,0% auf 227,5 Millionen US-Dollar. Das Unternehmen verzeichnete einen Anstieg der Einschreibungen an der GCU um 7,0% auf 102.676 und einen Anstieg der Einschreibungen außerhalb des Campus um 12,1% auf 4.377. Der Nettogewinn wuchs um 20,4% auf 34,9 Millionen US-Dollar, während das verwässerte Ergebnis pro Aktie auf 1,19 US-Dollar anstieg. Das bereinigte EBITDA stieg um 22,6% auf 58,5 Millionen US-Dollar.
Für das erste Halbjahr 2024 stiegen die Serviceumsätze um 9,0% auf 502,1 Millionen US-Dollar, während der Nettogewinn um 16,2% auf 102,9 Millionen US-Dollar anstieg. Die Liquiditätslage des Unternehmens verbesserte sich, mit einem Anstieg von Bargeld und Investitionen um 97,3 Millionen US-Dollar auf 341,8 Millionen US-Dollar. GCE gab einen positiven Ausblick für das 3. und 4. Quartal und das gesamte Jahr 2024 und prognostizierte ein anhaltendes Wachstum der Serviceumsätze und Gewinne.
- Service revenue increased 8.0% year-over-year to $227.5 million in Q2 2024
- GCU enrollments grew 7.0% to 102,676 students
- Net income rose 20.4% to $34.9 million in Q2 2024
- Adjusted EBITDA increased 22.6% to $58.5 million in Q2 2024
- Liquidity position improved with cash and investments up $97.3 million to $341.8 million
- Positive outlook for Q3, Q4, and full-year 2024 with projected growth in service revenue and earnings
- Operating margin was negatively impacted by $1.1 million in severance costs for an executive resignation
- Effective tax rate increased to 25.5% in Q2 2024 from 23.8% in Q2 2023 due to higher state income taxes
- Contract modifications with some university partners reduced revenue share percentages
- Termination of one university partner contract at the end of Spring 2024 semester
Insights
Grand Canyon Education's Q2 2024 results show strong financial performance. Service revenue increased by
The company's liquidity position strengthened, with cash and investments increasing by
GCE's Q2 results highlight its successful expansion in the education services sector. Total partner enrollments grew to 106,307, a
The company's diversification strategy is evident in its increased focus on Accelerated Bachelor of Science in Nursing (ABSN) programs, which generate higher revenue per student. However, contract modifications with some university partners and the termination of one partnership indicate potential challenges in maintaining all existing relationships. The overall enrollment and revenue growth suggest that GCE's multi-partner approach and expansion of physical locations are proving effective in driving business growth in the competitive education services market.
Grand Canyon Education, Inc. Reports Second Quarter 2024 Results
For the three months ended June 30, 2024:
- Service revenue for the three months ended June 30, 2024 was
$227.5 million $16.9 million 8.0% , as compared to service revenue of$210.6 million 7.0% over enrollments at June 30, 2023, an increase in university partner enrollments at our off-campus classroom and laboratory sites to 4,377 at June 30, 2024, an increase of12.1% over enrollments at June 30, 2023, which includes 746 and 350 GCU students at June 30, 2024 and 2023, respectively, and an increase in revenue per student year over year. The increase in revenue per student between years is primarily due to the service revenue impact of the increased room, board and other ancillary revenues at GCU in the second quarter of 2024 as compared to the prior year period. In addition, service revenue per student for Accelerated Bachelor of Science in Nursing ("ABSN") students at off-campus classroom and laboratory sites generates a significantly higher revenue per student than we earn under our agreement with GCU, as these agreements generally provide us with a higher revenue share percentage, the partners have higher tuition rates than GCU and the majority of their students take more credits on average per semester. The increase in revenue per student in the three months ended June 30, 2024 was lessened somewhat by the timing of the Spring semester for the ground traditional campus. The Spring semester started one day earlier in 2024 than in 2023, which had the effect of shifting$2.1 million - Partner enrollments totaled 106,307 at June 30, 2024 as compared to 99,526 at June 30, 2023. University partner enrollments at our off-campus classroom and laboratory sites were 4,377, an increase of
12.1% over enrollments at June 30, 2023, which includes 746 and 350 GCU students at June 30, 2024 and 2023, respectively. We opened five new off-campus classroom and laboratory sites in the year ended December 31, 2023 and four sites in the three months ended June 30, 2024, increasing the total number of these sites to 43 at June 30, 2024. Enrollments for GCU ground students were 7,397 at June 30, 2024 up from 7,327 at June 30, 2023. GCU online enrollments were 95,279 at June 30, 2024, up from 88,645 at June 30, 2023, an increase of7.5% between years. GCU enrollment declines between March 31 and June 30 of each year as ground enrollment at GCU at June 30 of each year only includes traditional-aged students taking summer school classes, which is a small percentage of GCU's traditional-aged student body. The Spring semester for GCU's traditional-aged student body ends near the end of April each year. - Operating income for the three months ended June 30, 2024 was
$42.7 million $7.3 million $35.4 million 18.8% and16.8% , respectively. The second quarter operating margin was negatively impacted on a year over year basis by the timing difference between years in the start of the Spring semester for GCU's ground traditional campus and$1.1 million - Income tax expense for the three months ended June 30, 2024 was
$12.0 million $2.9 million 32.0% , as compared to income tax expense of$9.1 million 25.5% during the second quarter of 2024 compared to23.8% during the second quarter of 2023. The effective tax rate increased year over year due to higher state income taxes. - Net income increased
20.4% to$34.9 million $29.0 million $37.3 million $30.6 million - Diluted net income per share was
$1.19 $0.96 $1.27 $1.01 - Adjusted EBITDA increased
22.6% to$58.5 million $47.7 million
For the six months ended June 30, 2024:
- Service revenue for the six months ended June 30, 2024 was
$502.1 million $41.4 million 9.0% , as compared to service revenue of$460.7 million 7.0% over enrollments at June 30, 2023, an increase in university partner enrollments at our off-campus classroom and laboratory sites to 4,377 at June 30, 2024, an increase of12.1% over enrollments at June 30, 2023, which includes 746 and 350 GCU students at June 30, 2024 and 2023, respectively, and an increase in revenue per student year over year. The increase in revenue per student between years is primarily due to the service revenue impact of the increased room, board and other ancillary revenues at GCU in the six months ended June 30, 2024 as compared to the prior year period. In addition, service revenue per student for ABSN students at off-campus classroom and laboratory sites generates a significantly higher revenue per student than we earn under our agreement with GCU, as these agreements generally provide us with a higher revenue share percentage, the partners have higher tuition rates than GCU and the majority of their students take more credits on average per semester. The additional day for leap year in 2024 added additional service revenue of$1.5 million - Operating income for the six months ended June 30, 2024 was
$127.2 million $17.3 million $109.9 million 25.3% and23.9% , respectively. The six months ended June 30, 2024 operating margin was positively impacted on a year over year basis by an extra day in 2024 for leap year and was negatively impacted by$1.1 million - Income tax expense for the six months ended June 30, 2024 was
$32.1 million $6.0 million 23.2% , as compared to income tax expense of$26.1 million 23.8% during the six months ended June 30, 2024 compared to22.8% during the six months ended June 30, 2023. Although the effective tax rate was favorably impacted in the six months ended June 30, 2024 by excess tax benefits of$1.5 million $0.9 million - Net income increased
16.2% to$102.9 million $88.5 million $107.0 million $91.9 million - Diluted net income per share was
$3.48 $2.91 $3.62 $3.02 - Adjusted EBITDA increased
16.9% to$157.1 million $134.4 million
Liquidity and Capital Resources
Our liquidity position, as measured by cash and cash equivalents and investments increased by
Grand Canyon Education, Inc. Reports Second Quarter 2024 Results and Full Year Outlook 2024
2024 Outlook
Q3 2024:
- Service revenue of between
$238.0 million $240.5 million - Operating margin of between
19.7% and20.4% ; - Effective tax rate of
20.8% ; - Diluted EPS of between
$1.37 $1.43 - 29.1 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of
Q4 2024:
- Service revenue of between
$286.5 million $291.5 million - Operating margin of between
34.7% and35.7% ; - Effective tax rate of
21.7% ; - Diluted EPS of between
$2.78 $2.91 - 28.9 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of
Full Year 2024:
- Service revenue of between
$1,026.6 million $1,034.1 million - Operating margin of between
26.7% and27.2% ; - Effective tax rate of
22.4% ; - Diluted EPS between
$7.63 $7.81 - 29.3 million diluted shares.
The diluted EPS guidance includes non-cash amortization of intangible assets net of taxes of
Forward-Looking Statements
This news release contains "forward-looking statements" which include information relating to future events, future financial performance, strategies expectations, competitive environment, regulation, and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new programs; whether regulatory, economic, or business developments or other matters may or may not have a material adverse effect on our financial position, results of operations, or liquidity; projections, predictions, expectations, estimates, and forecasts as to our business, financial and operating results, and future economic performance; and management's goals and objectives and other similar expressions concerning matters that are not historical facts. Words such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar expressions, the negative of these expressions, as well as statements in future tense, identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause our actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements include, but are not limited to: legal and regulatory actions taken against our university partners that impact their businesses and that directly or indirectly reduce the service revenue we can earn under our master services agreements; the occurrence of any event, change or other circumstance that could give rise to the termination of any of the key university partner agreements; our ability to properly manage risks and challenges associated with strategic initiatives, including potential acquisitions or divestitures of, or investments in, new businesses, acquisitions of new properties and new university partners, and expansion of services provided to our existing university partners; our failure to comply with the extensive regulatory framework applicable to us either directly as a third-party service provider or indirectly through our university partners, including Title IV of the Higher Education Act and the regulations thereunder, state laws and regulatory requirements, and accrediting commission requirements, and the results of related legal and regulatory actions that arise from such failures; the harm to our business, results of operations, and financial condition, and harm to our university partners resulting from epidemics, pandemics, or public health crises; the harm to our business and our ability to retract and retain students resulting from capacity constraints, system disruptions, or security breaches in our online computer networks and phone systems; the ability of our university partners' students to obtain federal Title IV funds, state financial aid, and private financing; potential damage to our reputation or other adverse effects as a result of negative publicity in the media, in the industry or in connection with governmental reports or investigations or otherwise, affecting us or other companies in the education services sector; risks associated with changes in applicable federal and state laws and regulations and accrediting commission standards, including pending rulemaking by the United States Department of Education applicable to us directly or indirectly through our university partners; competition from other education service companies in our geographic region and market sector, including competition for students, qualified executives and other personnel; our expected tax payments and tax rate; our ability to hire and train new, and develop and train existing employees; the pace of growth of our university partners' enrollment and its effect on the pace of our own growth; fluctuations in our revenues due to seasonality; our ability to, on behalf of our university partners, convert prospective students to enrolled students and to retain active students to graduation; our success in updating and expanding the content of existing programs and developing new programs in a cost-effective manner or on a timely basis for our university partners; risks associated with the competitive environment for marketing the programs of our university partners; failure on our part to keep up with advances in technology that could enhance the experience for our university partners' students; our ability to manage future growth effectively; the impact of any natural disasters or public health emergencies; general adverse economic conditions or other developments that affect the job prospects of our university partners' students; and other factors discussed in reports on file with the Securities and Exchange Commission, including as set forth in Part I, Item 1A of our Annual Report on Form 10-K for period ended December 31, 2023, as updated in our subsequent reports filed with the Securities and Exchange Commission on Form 10-Q or Form 8-K.
Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Grand Canyon Education, Inc. Reports Second Quarter 2024 Results
Conference Call
Grand Canyon Education, Inc. will discuss its second quarter 2024 results and full year 2024 outlook during a conference call scheduled for today, August 6, 2024 at 4:30 p.m. Eastern time (ET).
Live Conference Dial-In:
Those interested in participating in the question-and-answer session should follow the conference dial-in instructions below. Participants may register for the call here to receive the dial-in numbers and unique PIN to access the call seamlessly. Please dial in at least ten minutes prior to the start of the call. Journalists are invited to listen only.
Webcast and Replay:
Investors, journalists and the general public may access a live webcast of this event at: Q2 2024 Grand Canyon Education Inc. Earnings Conference Call. A webcast replay will be available approximately two hours following the conclusion of the call at the same link.
About Grand Canyon Education, Inc.
Grand Canyon Education, Inc. ("GCE"), incorporated in 2008, is a publicly traded education services company that currently provides services to 22 university partners. GCE is uniquely positioned in the education services industry in that its leadership has over 30 years of proven expertise in providing a full array of support services in the post-secondary education sector and has developed significant technological solutions, infrastructure and operational processes to provide superior services in these areas on a large scale. GCE provides services that support students, faculty and staff of partner institutions such as marketing, strategic enrollment management, counseling services, financial services, technology, technical support, compliance, human resources, classroom operations, content development, faculty recruitment and training, among others. For more information about GCE visit the Company's website at www.gce.com.
Grand Canyon Education, Inc., 2600 W. Camelback Road,
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GRAND CANYON EDUCATION, INC. | ||||||||||||
Consolidated Income Statements | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
(In thousands, except per share data) | ||||||||||||
Service revenue | $ | 227,463 | $ | 210,577 | $ | 502,138 | $ | 460,702 | ||||
Costs and expenses: | ||||||||||||
Technology and academic services | 41,001 | 38,957 | 80,126 | 76,469 | ||||||||
Counseling services and support | 78,107 | 72,392 | 160,991 | 145,741 | ||||||||
Marketing and communication | 52,895 | 50,806 | 108,248 | 103,700 | ||||||||
General and administrative | 10,636 | 10,875 | 21,366 | 20,663 | ||||||||
Amortization of intangible assets | 2,105 | 2,105 | 4,210 | 4,210 | ||||||||
Total costs and expenses | 184,744 | 175,135 | 374,941 | 350,783 | ||||||||
Operating income | 42,719 | 35,442 | 127,197 | 109,919 | ||||||||
Interest expense | (2) | (7) | (4) | (26) | ||||||||
Investment interest and other | 4,112 | 2,590 | 7,841 | 4,743 | ||||||||
Income before income taxes | 46,829 | 38,025 | 135,034 | 114,636 | ||||||||
Income tax expense | 11,951 | 9,052 | 32,146 | 26,099 | ||||||||
Net income | $ | 34,878 | $ | 28,973 | $ | 102,888 | $ | 88,537 | ||||
Earnings per share: | ||||||||||||
Basic income per share | $ | 1.19 | $ | 0.96 | $ | 3.50 | $ | 2.92 | ||||
Diluted income per share | $ | 1.19 | $ | 0.96 | $ | 3.48 | $ | 2.91 | ||||
Basic weighted average shares outstanding | 29,285 | 30,183 | 29,372 | 30,321 | ||||||||
Diluted weighted average shares outstanding | 29,415 | 30,287 | 29,527 | 30,462 | ||||||||
GRAND CANYON EDUCATION, INC. | ||||||
Consolidated Balance Sheets | ||||||
As of June 30, | As of December 31, | |||||
(In thousands, except par value) | 2024 | 2023 | ||||
ASSETS: | (Unaudited) | |||||
Current assets | ||||||
Cash and cash equivalents | $ | 241,317 | $ | 146,475 | ||
Investments | 100,498 | 98,031 | ||||
Accounts receivable, net | 29,454 | 78,811 | ||||
Income taxes receivable | 5,504 | 1,316 | ||||
Other current assets | 13,052 | 12,889 | ||||
Total current assets | 389,825 | 337,522 | ||||
Property and equipment, net | 173,827 | 169,699 | ||||
Right-of-use assets | 101,893 | 92,454 | ||||
Amortizable intangible assets, net | 164,171 | 168,381 | ||||
Goodwill | 160,766 | 160,766 | ||||
Other assets | 2,209 | 1,641 | ||||
Total assets | $ | 992,691 | $ | 930,463 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||
Current liabilities | ||||||
Accounts payable | $ | 22,466 | $ | 17,676 | ||
Accrued compensation and benefits | 33,776 | 31,358 | ||||
Accrued liabilities | 31,935 | 26,725 | ||||
Income taxes payable | 94 | 10,250 | ||||
Deferred revenue | 7,216 | — | ||||
Current portion of lease liability | 11,980 | 11,024 | ||||
Total current liabilities | 107,467 | 97,033 | ||||
Deferred income taxes, noncurrent | 26,992 | 26,749 | ||||
Other long-term liabilities | 1,538 | 410 | ||||
Lease liability, less current portion | 97,499 | 88,257 | ||||
Total liabilities | 233,496 | 212,449 | ||||
Commitments and contingencies | ||||||
Stockholders' equity | ||||||
Preferred stock, | — | — | ||||
Common stock, | 541 | 540 | ||||
Treasury stock, at cost, 24,541 and 24,017 shares of common stock at June 30, 2024 and | (1,918,810) | (1,849,693) | ||||
Additional paid-in capital | 329,990 | 322,512 | ||||
Accumulated other comprehensive loss | (126) | (57) | ||||
Retained earnings | 2,347,600 | 2,244,712 | ||||
Total stockholders' equity | 759,195 | 718,014 | ||||
Total liabilities and stockholders' equity | $ | 992,691 | $ | 930,463 | ||
GRAND CANYON EDUCATION, INC. | ||||||
Consolidated Statements of Cash Flows | ||||||
(Unaudited) | ||||||
Six Months Ended | ||||||
June 30, | ||||||
(In thousands) | 2024 | 2023 | ||||
Cash flows provided by operating activities: | ||||||
Net income | $ | 102,888 | $ | 88,537 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Share-based compensation | 7,479 | 6,622 | ||||
Depreciation and amortization | 13,581 | 10,939 | ||||
Amortization of intangible assets | 4,210 | 4,210 | ||||
Deferred income taxes | 266 | 1,160 | ||||
Other, including fixed asset disposals | (457) | 842 | ||||
Changes in assets and liabilities: | ||||||
Accounts receivable from university partners | 49,357 | 52,731 | ||||
Other assets | (749) | (1,332) | ||||
Right-of-use assets and lease liabilities | 759 | 787 | ||||
Accounts payable | 4,986 | 2,323 | ||||
Accrued liabilities | 8,334 | (460) | ||||
Income taxes receivable/payable | (14,344) | (18,341) | ||||
Deferred revenue | 7,216 | 9,110 | ||||
Net cash provided by operating activities | 183,526 | 157,128 | ||||
Cash flows used in investing activities: | ||||||
Capital expenditures | (17,933) | (17,599) | ||||
Additions of amortizable content | (170) | (488) | ||||
Purchases of investments | (48,594) | (73,807) | ||||
Proceeds from sale or maturity of investments | 46,708 | 43,837 | ||||
Net cash used in investing activities | (19,989) | (48,057) | ||||
Cash flows used in financing activities: | ||||||
Repurchase of common shares and shares withheld in lieu of income taxes | (68,695) | (86,555) | ||||
Net cash used in financing activities | (68,695) | (86,555) | ||||
Net increase in cash and cash equivalents and restricted cash | 94,842 | 22,516 | ||||
Cash and cash equivalents and restricted cash, beginning of period | 146,475 | 120,409 | ||||
Cash and cash equivalents and restricted cash, end of period | $ | 241,317 | $ | 142,925 | ||
Supplemental disclosure of cash flow information | ||||||
Cash paid for interest | $ | 4 | $ | 26 | ||
Cash paid for income taxes | $ | 44,220 | $ | 42,460 | ||
Supplemental disclosure of non-cash investing and financing activities | ||||||
Purchases of property and equipment included in accounts payable | $ | 1,713 | $ | 1,644 | ||
ROU Asset and Liability recognition | $ | 9,439 | $ | 3,727 | ||
Excise tax on treasury stock repurchases | $ | 422 | $ | 641 | ||
GRAND CANYON EDUCATION, INC.
Adjusted EBITDA (Non-GAAP Financial Measure)
Adjusted EBITDA is defined as net income plus interest expense, less interest income and other gain (loss) recognized on investments, plus income tax expense, and plus depreciation and amortization (EBITDA), as adjusted for (i) contributions to private
We believe Adjusted EBITDA allows us to compare our current operating results with corresponding historical periods and with the operational performance of other companies in our industry because it does not give effect to potential differences caused by variations in capital structures (affecting relative interest expense, including the impact of write-offs of deferred financing costs when companies refinance their indebtedness), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), the book amortization of intangibles (affecting relative amortization expense), and other items that we do not consider reflective of underlying operating performance. We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors, and other interested parties as a measure of performance.
In evaluating Adjusted EBITDA, investors should be aware that in the future we may incur expenses similar to the adjustments described above. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by expenses that are unusual, non-routine, or non-recurring. Adjusted EBITDA has limitations as an analytical tool in that, among other things it does not reflect:
- cash expenditures for capital expenditures or contractual commitments;
- changes in, or cash requirements for, our working capital requirements;
- interest expense, or the cash required to replace assets that are being depreciated or amortized; and
- the impact on our reported results of earnings or charges resulting from the items for which we make adjustments to our EBITDA, as described above and set forth in the table below.
In addition, other companies, including other companies in our industry, may calculate these measures differently than we do, limiting the usefulness of Adjusted EBITDA as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered as a substitute for net income, operating income, or any other performance measure derived in accordance with and reported under GAAP, or as an alternative to cash flow from operating activities or as a measure of our liquidity. We compensate for these limitations by relying primarily on our GAAP results and only use Adjusted EBITDA as a supplemental performance measure.
The following table provides a reconciliation of net income to Adjusted EBITDA, which is a non-GAAP measure for the periods indicated:
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
(Unaudited, in thousands) | (Unaudited, in thousands) | |||||||||||
Net income | $ | 34,878 | $ | 28,973 | $ | 102,888 | $ | 88,537 | ||||
Plus: interest expense | 2 | 7 | 4 | 26 | ||||||||
Less: investment interest and other | (4,112) | (2,590) | (7,841) | (4,743) | ||||||||
Plus: income tax expense | 11,951 | 9,052 | 32,146 | 26,099 | ||||||||
Plus: amortization of intangible assets | 2,105 | 2,105 | 4,210 | 4,210 | ||||||||
Plus: depreciation and amortization | 6,928 | 5,402 | 13,581 | 10,939 | ||||||||
EBITDA | 51,752 | 42,949 | 144,988 | 125,068 | ||||||||
Plus: loss on fixed asset disposal | 44 | 54 | 44 | 135 | ||||||||
Plus: litigation and regulatory reserves | 1,601 | 1,474 | 3,471 | 2,547 | ||||||||
Plus: severance costs | 1,133 | — | 1,133 | — | ||||||||
Plus: share-based compensation | 3,996 | 3,253 | 7,479 | 6,622 | ||||||||
Adjusted EBITDA | $ | 58,526 | $ | 47,730 | $ | 157,115 | $ | 134,372 | ||||
Non-GAAP Net Income and Non-GAAP Diluted Income Per Share
The Company believes the presentation of non-GAAP net income and non-GAAP diluted income per share information that excludes amortization of intangible assets, loss on disposal of fixed assets and severance costs allows investors to develop a more meaningful understanding of the Company's performance over time. Accordingly, for the six-months ended June 30, 2024 and 2023, the table below provides reconciliations of these non-GAAP items to GAAP net income and GAAP diluted income per share, respectively:
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
(Unaudited, in thousands except per share data) | ||||||||||||
GAAP Net income | $ | 34,878 | $ | 28,973 | $ | 102,888 | $ | 88,537 | ||||
Amortization of intangible assets | 2,105 | 2,105 | 4,210 | 4,210 | ||||||||
Loss on disposal of fixed assets | 44 | 54 | 44 | 135 | ||||||||
Severance costs | 1,133 | — | 1,133 | — | ||||||||
Income tax effects of adjustments(1) | (837) | (515) | (1,282) | (989) | ||||||||
As Adjusted, Non-GAAP Net income | $ | 37,323 | $ | 30,617 | $ | 106,993 | $ | 91,893 | ||||
GAAP Diluted income per share | $ | 1.19 | $ | 0.96 | $ | 3.48 | $ | 2.91 | ||||
Amortization of intangible assets (2) | 0.05 | 0.05 | 0.11 | 0.11 | ||||||||
Loss on disposal of fixed assets (3) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||
Severance costs (4) | 0.03 | — | 0.03 | — | ||||||||
As Adjusted, Non-GAAP Diluted income per share | $ | 1.27 | $ | 1.01 | $ | 3.62 | $ | 3.02 | ||||
____________________ | |
(1) | The income tax effects of adjustments are based on the effective income tax rate applicable to adjusted (non-GAAP) results. |
(2) | The amortization of acquired intangible assets per diluted share is net of an income tax benefit of |
(3) | The loss on disposal of fixed assets per diluted share is net of an income tax benefit of nil for both of the three months ended June 30, 2024 and 2023, and net of an income tax benefit of nil for both of the six months ended June 30, 2024 and 2023. |
(4) | The severance costs per diluted share is net of an income tax benefit of |
Investor Relations Contact:
Daniel E. Bachus
Chief Financial Officer
Grand Canyon Education, Inc.
602-639-6648
Dan.bachus@gce.com
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SOURCE Grand Canyon Education, Inc.
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