What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-03 compared with 2023-05-02 · 108 added, 54 removed, 118 unchanged (58% of the section changed)

46 unchanged sentences

In addition, we have provided certain services to a university partner to assist them in expanding their online graduate programs.

As of March 31, 2023, GCE provides education services to 27 university partners across the United States.

As of June 30, 2023, GCE provides education services to 25 university partners across the United States.

We plan to continue to add additional university partners and to introduce additional programs with both our existing partners and with new partners.

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Our critical accounting policies are disclosed in the 2022 Form 10-K for the fiscal year ended December 31, 2022.

During the three months ended March 31, 2023, there were no significant changes in our critical accounting policies.

During the six months ended June 30, 2023, there were no significant changes in our critical accounting policies.

Results of Operations

1 unchanged sentence

Amortization of intangible assets has been excluded from the table below:

Three Months Ended

Six Months Ended

Costs and expenses

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General and administrative

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

Service revenue .

Our service revenue for the three months ended March 31, 2023 was $250.1 million, an increase of $6.0 million, or 2.5%, as compared to service revenue of $244.1 million for the three months ended March 31, 2022.

The increase year over year in service revenue was primarily due to an increase in GCU traditional campus enrollments of 6.6% and an increase in revenue per student year over year, partially offset by a decrease in students in a university partner’s Occupational Therapy Assistants (“OTA”) program of 19.9%.

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 first quarter of 2023 as compared to the prior year period .

Our service revenue for the three months ended June 30, 2023 was $210.6 million, an increase of $10.8 million, or 5.4%, as compared to service revenue of $199.8 million for the three months ended June 30, 2022.

The increase year over year in service revenue was primarily due to an increase in GCU enrollments to 95,972 at June 30, 2023, an increase of 4.1% over enrollments at June 30, 2022 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 2023 as compared to the prior year period .

In addition, s ervice 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 March 31, 2023 was negatively impacted by the timing of the Spring semester for the ground traditional campus.

The increase in revenue per student in the three months ended June 30, 2023 was also positively impacted by the timing of the Spring semester for the ground traditional campus.

The Spring semester started two days later in 2023 and extended four more days into April, which had the effect of shifting $4.5 million in service revenue from the first quarter of 2023 to the second quarter of 2023.

Partner enrollments totaled 112,588 at March 31, 2023 as compared to 110,217 at March 31, 2022.

University partner enrollments at our off-campus classroom and laboratory sites were 4,315, a decrease of 4.0% over enrollments at March 31, 2022, which includes 360 and 283 GCU students at March 31, 2023 and 2022, respectively.

This growth rate has slowed over the past year primarily due to the 19.9% decline in OTA students as the university partner stopped admitting new students for most of 2021 due to clinical placement backlog and although that partner is now admitting students, the number of

admitted students remains below previous levels.

Year over year ABSN students decreased 2.9% at March 31, 2023.

Partner enrollments totaled 99,526 at June 30, 2023 as compared to 96,029 at June 30, 2022.

University partner enrollments at our off-campus classroom and laboratory sites were 3,904, a decrease of 5.2% over enrollments at June 30, 2022, which includes 350 and 324 GCU students at June 30, 2023 and 2022, respectively.

None of our ABSN partners stopped admitting new students due to the clinical faculty challenges that began during the pandemic, however some locations that were scheduled to open were delayed and some existing partners have experienced reduced incoming cohort sizes which has slowed the growth.

We believe the growth in the number of OTA and ABSN students is also being negatively impacted by the strong job market as these students have historically been individuals with already completed bachelor’s degrees choosing to re-career into one of these health professions.

We believe the growth in the number of

ABSN students is also being negatively impacted by the strong job market as these students have historically been individuals with already completed bachelor’s degrees choosing to re-career into one of these health professions.

To address this challenge, we have been working with a number of our university partners to adjust their programs to allow students with the required education experience but without a complete bachelor’s degree to enter their programs.

We did open six new off-campus classroom and laboratory sites in the year ended December 31, 2022 and one site in the three months ended March 31, 2023 increasing the total number of these sites to 36 at March 31, 2023 and we anticipate opening three to four more in 2023 which we hope, along with the program change discussed earlier, will re-accelerate the ABSN student enrollment growth.

Enrollments at GCU increased to 108,633 at March 31, 2023, an increase of 2.5% over enrollments at March 31, 2022.

Enrollments for GCU ground students were 22,568 at March 31, 2023 up from 21,281 at March 31, 2022 primarily due to a 6.6% increase in traditional ground students between years.

GCU online enrollments were 86,065 at March 31, 2023, up from 84,722 at March 31, 2022.

We did open six new off-campus classroom and laboratory sites in the year ended December 31, 2022 and one site in the six months ended June 30, 2023 increasing the total number of these sites to 36 at June 30, 2023 and we anticipate opening three to four more in 2023 which we hope, along with the program change discussed earlier, will re-accelerate the ABSN student enrollment growth.

Enrollments for GCU ground students were 7,327 at June 30, 2023 up from 7,101 at June 30, 2022 primarily due to a 3.7% increase in traditional ground students between years.

GCU online enrollments were 88,645 at June 30, 2023, up from 85,132 at June 30, 2022.

GCU enrollment declines between March 31 and June 30 of each year as ground traditional 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.

Technology and academic services .

Our technology and academic services expenses for the three months ended March 31, 2023 were $37.5 million, an increase of $1.2 million, or 3.3%, as compared to technology and academic services expenses of $36.3 million for the three months ended March 31, 2022.

This increase was primarily due to increases in occupancy and depreciation and in employee compensation and related expenses, including share-based compensation of $0.9 million and $0.6 million, respectively, partially offset by a decrease in other technology and academic costs of $0.2 million.

These increases were primarily due to the costs associated with the increased number of off-campus classroom and laboratory sites and the increased headcount to support our 27 university partners, and their increased enrollment growth, tenure-based salary adjustments and the increased number of off-campus classroom and laboratory sites year over year.

Our technology and academic services expenses as a percentage of revenue increased 0.1% to 15.0% for the three months ended March 31, 2023, from 14.9% for the three months ended March 31, 2022.

This increase was primarily due to partnership agreements with university partners that have off-campus classroom and laboratory sites requiring a higher level of technology and academic services than our agreement with GCU.

We anticipate that technology and academic services expenses as a percentage of revenue will continue to increase in the future as we open more off-campus classroom and laboratory sites.

Our technology and academic services expenses for the three months ended June 30, 2023 were $39.0 million, an increase of $0.8 million, or 2.0%, as compared to technology and academic services expenses of $38.2 million for the three months ended June 30, 2022.

This increase was primarily due to increases in occupancy and depreciation and in other technology and academic costs of $1.2 million and $0.8 million, respectively, partially offset by a decrease in employee compensation and related expenses, including share-based compensation of $1.2 million.

The increased occupancy and depreciation and other technology and academic costs were primarily due to the costs associated with the increased number of off-campus classroom and laboratory sites to support our 25 university partners, and their increased enrollment growth.

The decrease in employee compensation and related expenses is primarily due to decreased faculty reimbursements due to the decline in our other partners’ enrollments partially offset by increased headcount to support our 25 university partners, and their increased enrollment growth, tenure-based salary adjustments and the increased number of off-campus classroom and laboratory sites year over year.

Our technology and academic services expenses as a percentage of revenue decreased 0.6% to 18.5% for the three months ended June 30, 2023, from 19.1% for the three months ended June 30, 2022.

This decrease was primarily due to the decreased faculty reimbursements between years.

We anticipate that technology and academic services expenses as a percentage of revenue will increase in the future as we open more off-campus classroom and laboratory sites and our other partners’ enrollments grow.

Counseling services and support .

Our counseling services and support expenses for the three months ended March 31, 2023 were $73.3 million, an increase of $5.8 million, or 8.6%, as compared to counseling services and support expenses of $67.5 million for the three months ended March 31, 2022.

Our counseling services and support expenses for the three months ended June 30, 2023 were $72.4 million, an increase of $6.4 million, or 9.6%, as compared to counseling services and support expenses of $66.0 million for the three months ended June 30, 2022.

This increase was primarily attributable to increases in employee compensation and related expenses including share-based compensation and in other counseling services and support expenses of $6.6 million and $0.3 million, respectively, partially offset by a decrease in occupancy and depreciation of $0.5 million.

The increases in employee compensation and related expenses were primarily due to increased headcount to support our university partners, and their planned increases in enrollment, tenure-based salary adjustments, increased benefit costs and the increased number of off-campus classroom and laboratory sites open year over year.

The increase in other counseling services and support expenses is primarily the result of increased travel costs for our 25 university partners.

Our counseling services and support expenses as a percentage of revenue increased 1.3% to 34.4% for the three months ended June 30, 2023, from 33.1% for the three months ended June 30, 2022 primarily due to the significant increase year over year in headcount and travel costs.

We anticipate that counseling services and support expense as a percentage of revenue will continue to be higher in 2023 than in 2022 as travel expenses will continue to be higher than in the prior year and we continue to grow our employee base and their compensation to meet our university partners’ growth expectations and retain our employees.

Marketing and communication .

Our marketing and communication expenses for the three months ended June 30, 2023 were $50.8 million, an increase of $1.1 million, or 2.2%, as compared to marketing and communication expenses of $49.7 million for the three months ended June 30, 2022.

This increase was primarily attributable to the increased cost to market our university partners’ programs and to the marketing of new university partners and new locations which resulted in increased advertising of $1.1 million and increased employee compensation, including share-based compensation of $0.2 million, partially offset by a decrease in other marketing and communication expenses of $0.2 million.

Our marketing and communication expenses as a percentage of revenue decreased by 0.8% to 24.1% for

the three months ended June 30, 2023, from 24.9% for the three months ended June 30, 2022, primarily due to our ability to leverage our marketing and communication expenses across an increasing revenue base, partially offset by the number of university partners and their growth expectations and increased off-campus classroom and laboratory sites opened and sites planned to open in the next 12 months.

General and administrative .

Our general and administrative expenses for the three months ended June 30, 2023 were $10.9 million, an increase of $1.0 million, or 10.3%, as compared to general and administrative expenses of $9.9 million for the three months ended June 30, 2022.

This increase was primarily attributable to increased charitable contributions and increased professional fees of $0.7 million and $0.5 million, respectively, partially offset by a decrease in employee compensation, including share-based expenses of $0.2 million.

Our general and administrative expenses as a percentage of revenue increased by 0.3% to 5.2% for the three months ended June 30, 2023, from 4.9% for the three months ended June 30, 2022.

Amortization of intangible assets .

Amortization of intangible assets for the three months ended June 30, 2023 and 2022 were $2.1 million for both periods.

As a result of the acquisition of our wholly owned subsidiary, Orbis Education, certain identifiable intangible assets were created (primarily customer relationships) that will be amortized over their expected lives.

Investment interest and other .

Investment interest and other for the three months ended June 30, 2023 was $2.6 million, as compared to investment interest and other for the three months ended June 30, 2022 of $0.3 million due to higher investment balances and higher returns on those balances.

Income tax expense .

Income tax expense for the three months ended June 30, 2023 was $9.1 million, an increase of $0.5 million, or 5.0%, as compared to income tax expense of $8.6 million for the three months ended June 30, 2022.

This increase was the result of an increase in our taxable income, partially offset by a decrease in our effective tax rate between periods.

Our effective tax rate was 23.8% during the second quarter of 2023 compared to 25.2% during the second quarter of 2022.

In the second quarter of 2023 the effective tax rate was favorably impacted by state tax audits, while in the second quarter of 2022 the effective tax rate was unfavorably impacted by an increase in the state income tax rate.

Our net income for the three months ended June 30, 2023 was $29.0 million, an increase of $3.4 million, or 13.3%, as compared to $25.6 million for the three months ended June 30, 2022, due to the factors discussed above.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Service revenue .

Our service revenue for the six months ended June 30, 2023 was $460.7 million, an increase of $16.8 million, or 3.8%, as compared to service revenue of $443.9 million for the six months ended June 30, 2022.

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’s ground traditional campus between years primarily due to increased enrollment .

In addition, s ervice 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.

Partner enrollments totaled 99,526 at June 30, 2023 as compared to 96,029 at June 30, 2022.

We believe the growth in the number of ABSN students is also being negatively impacted by the strong job market as these students have historically been individuals with already completed bachelor’s degrees choosing to re-career into one of these health professions.

To address this challenge, we have been working with a number of our university partners to adjust

their programs to allow students with the required education experience but without a complete bachelor’s degree to enter their programs.

Enrollments for GCU ground students were 7,327 at June 30, 2023 up from 7,101 at June 30, 2022 primarily due to a 3.7% increase in traditional ground students between years.

GCU online enrollments were 88,645 at June 30, 2023, up from 85,132 at June 30, 2022.

The Spring semester for GCU’s traditional-aged student body ends near the end of April each year.

Technology and academic services .

Our technology and academic services expenses for the six months ended June 30, 2023 were $76.5 million, an increase of $2.0 million, or 2.6%, as compared to technology and academic services expenses of $74.5 million for the six months ended June 30, 2022.

This increase was primarily due to increases in occupancy and depreciation and other technology and academic costs of $2.0 million and $0.6 million, respectively, partially offset by a decrease in employee compensation and related expenses, including share-based compensation of $0.6 million.

These increases in occupancy and depreciation and other technology and academic costs were primarily due to the costs associated with the increased number of off-campus classroom and laboratory sites.

Our technology and academic services expenses as a percentage of revenue decreased 0.2% to 16.6% for the six months ended June 30, 2023, from 16.8% for the six months ended June 30, 2022 due primarily to the decreased faculty reimbursements.

Counseling services and support .

Our counseling services and support expenses for the six months ended June 30, 2023 were $145.7 million, an increase of $12.2 million, or 9.1%, as compared to counseling services and support expenses of $133.5 million for the six months ended June 30, 2022.

This increase was primarily attributable to increases in employee compensation and related expenses including share-based compensation and in other counseling services and support expenses of $11.4 million and $1.6 million, respectively, partially offset by a decrease in occupancy and depreciation of $0.8 million.

The increases in employee compensation and related expenses were primarily due to increased headcount to support our university partners, and their planned increases in enrollment, tenure-based salary adjustments and the increased number of off-campus classroom and laboratory sites open year over year.

The increase in other counseling services and support expenses is primarily the result of increased travel costs for our 25 university partners.

Our counseling services and support expenses as a percentage of revenue increased 1.6% to 29.3% for the three months ended March 31, 2023, from 27.7% for the three months ended March 31, 2022 primarily due to the significant increase year over year in headcount and travel costs.

We anticipate that counseling services and support expense as a percentage of revenue will continue to be higher in 2023 than in 2022 as travel expenses continue to increase and we grow our employee base and their compensation to meet our university partners’ growth expectations and retain our employees.

Our counseling services and support expenses as a percentage of revenue increased 1.5% to 31.6% for the six months ended June 30, 2023, from 30.1% for the six months ended June 30, 2022 primarily due to the significant increase year over year in headcount and travel costs.

Marketing and communication .

Our marketing and communication expenses for the three months ended March 31, 2023 were $52.9 million, an increase of $2.0 million, or 4.0%, as compared to marketing and communication expenses of $50.9 million for the three months ended March 31, 2022.

Our marketing and communication expenses for the six months ended June 30, 2023 were $103.7 million, an increase of $3.1 million, or 3.1%, as compared to marketing and communication expenses of $100.6 million for the six months ended June 30, 2022.

This increase was primarily attributable to the increased cost to market our university partners’ programs and to the marketing of new university partners and new locations which resulted in increased advertising of $3.2 million and increased employee compensation, including share-based compensation of $0.4 million, partially offset by a decrease in other marketing and communication expenses of $0.5 million.

Our marketing and communication expenses as a percentage of revenue increased by 0.3% to 21.1% for

the three months ended March 31, 2023, from 20.8% for the three months ended March 31, 2022, primarily due to the number of university partners and their growth expectations and increased off-campus classroom and laboratory sites opened and sites planned to open in the next 12 months.

Our marketing and communication expenses as a percentage of revenue decreased by 0.2% to 22.5% for the six months ended June 30, 2023, from 22.7% for the six months ended June 30, 2022, primarily due to our ability to leverage our marketing and communication expenses across an increasing revenue base, partially offset by the number of university partners and their growth expectations and increased off-campus classroom and laboratory sites opened and sites planned to open in the next 12 months.

General and administrative .

Our general and administrative expenses for the three months ended March 31, 2023 were $9.8 million, a decrease of $0.1 million, or 1.1%, as compared to general and administrative expenses of $9.9 million for the three months ended March 31, 2022.

Our general and administrative expenses as a percentage of revenue decreased by 0.2% to 3.9% for the three months ended March 31, 2023, from 4.1% for the three months ended March 31, 2022 primarily due to our ability to leverage our other general and administrative expenses across an increasing revenue base.

Our general and administrative expenses for the six months ended June 30, 2023 were $20.7 million, an increase of $1.0 million, or 4.6%, as compared to general and administrative expenses of $19.7 million for the six months ended June 30, 2022.

This increase was primarily attributable to increased charitable contributions and increased professional fees of $0.8 million and $0.5 million, respectively, partially offset by a decrease in employee compensation, including share-based expenses of $0.3 million.

Our general and administrative expenses as a percentage of revenue increased by 0.1% to 4.5% for the six months ended June 30, 2023, from 4.4% for the six months ended June 30, 2022.

Amortization of intangible assets .

Amortization of intangible assets for the three months ended March 31, 2023 and 2022 were $2.1 million for both periods.

Amortization of intangible assets for the six months ended June 30, 2023 and 2022 were $4.2 million for both periods.

Investment interest and other .

Investment interest and other for the three months ended March 31, 2023 was $2.2 million, as compared to investment interest and other for the three months ended March 31, 2022 of $0.2 million due to higher investment balances and higher returns on those balances.

Investment interest and other for the six months ended June 30, 2023 was $4.7 million, as compared to investment interest and other for the six months ended June 30, 2022 of $0.5 million due to higher investment balances and higher returns on those balances.

Income tax expense .

Income tax expense for the three months ended March 31, 2023 was $17.0 million, a decrease of $2.6 million, or 13.0%, as compared to income tax expense of $19.6 million for the three months ended March 31, 2022.

This decrease was the result of a decrease in our effective tax rate between periods and a slight decrease in our taxable income.

Our effective tax rate was 22.3% during the first quarter of 2023 compared to 25.2% during the first quarter of 2022.

In the first quarter of 2023, the effective tax rate was impacted by excess tax benefits of $0.9 million as compared to only $0.1 million in the first quarter of 2022.

In the first quarter of 2023 the effective tax rate was favorably impacted by state income tax refunds, while in the first quarter of 2022 the effective tax rate was unfavorably impacted by state audits.

Our net income for the three months ended March 31, 2023 was $59.6 million, an increase of $1.5 million, or 2.6%, as compared to $58.1 million for the three months ended March 31, 2022, due to the factors discussed above.

Income tax expense for the six months ended June 30, 2023 was $26.1 million, a decrease of $2.1 million, or 7.5%, as compared to income tax expense of $28.2 million for the six months ended June 30, 2022.

This decrease was the result of a decrease in our effective tax rate between periods, partially offset by an increase in our taxable income.

Our effective tax rate was 22.8% during the six months ended June 30, 2023 compared to 25.2% during the six months ended June 30, 2022.

In the six months ended June 30, 2023, the effective tax rate was impacted by excess tax benefits of $0.9 million as compared to only $0.1 million in the six months ended June 30, 2022.

In the six months ended June 30, 2023 the effective tax rate was also favorably impacted by state income tax refunds and audits, while in the six months ended June 30, 2022 the effective tax rate was unfavorably impacted by an increase in the state income tax rate.

Our net income for the six months ended June 30, 2023 was $88.5 million, an increase of $4.9 million, or 5.9%, as compared to $83.6 million for the six months ended June 30, 2022, due to the factors discussed above.

Our net revenue and operating results normally fluctuate as a result of seasonal variations in our business, principally due to changes in our university partners’ enrollment.

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Liquidity and Capital Resources

As of March 31,

As of June 30,

As of December 31,

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Cash, cash equivalents and investments

Our liquidity position, as measured by cash and cash equivalents and investments increased by $12.8 million between December 31, 2022 and March 31, 2023, which was largely attributable to cash flows from operations exceeding share repurchases and capital expenditures during the three months ended March 31, 2023.

Our liquidity position, as measured by cash and cash equivalents and investments increased by $51.7 million between December 31, 2022 and June 30, 2023, which was largely attributable to cash flows from operations exceeding share repurchases and capital expenditures during the six months ended June 30, 2023.

Based on our current level of operations and anticipated growth, we believe that our cash flow from operations and other sources of liquidity, including cash and cash equivalents, will provide adequate funds for ongoing operations, planned capital expenditures, and working capital requirements for at least the next 24 months.

Cash Flows from Operating Activities

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

Net cash provided by operating activities

The decrease in cash generated from operating activities between the three months ended March 31, 2022 and the three months ended March 31, 2023 was primarily due to changes in working capital balances, primarily accounts receivable, accounts payable and accrued liabilities.

Accounts payable and accrued liabilities decreased by $12.1 million due to the timing of the payrolls and check runs each quarter.

This decrease was offset by an increase in account receivable of $6.8 million due to timing of payments from our university partners resulting in lower accounts receivable balances.

The increase in cash generated from operating activities between the six months ended June 30, 2022 and the six months ended June 30, 2023 was primarily due to increased income and changes in working capital balances, primarily accounts receivable, accounts payable, accrued liabilities and income taxes payable.

Accounts receivable decreased between December 31, 2022 and June 30, 2023 by $8.4 million more than it did between December 31, 2021 and June 30, 2022 due to the change between periods in the amount due from university partners.

Accounts payable increased between December 31, 2022 and June 30, 2023 by $8.6 million more than it did between December 31, 2021 and June 30, 2022 due to the timing of check runs during those periods.

These increases in working capital balances were partially offset by decrease in accrued liabilities and income taxes payable that were greater between December 31, 2022 and June 30, 2023 than between December 31, 2021 and June 30, 2022 of $6.0 million and $4.8 million, respectively, due to timing of payments.

We define working capital as the assets and liabilities, other than cash, generated through the Company’s primary operating activities.

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Cash Flows from Investing Activities

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

Net cash used in investing activities

Investing activities consumed $37.1 million of cash in the three months ended March 31, 2023 compared to $69.7 million in the three months ended March 31, 2022.

In the first three months of 2023 and 2022 cash used in investing activities consisted of the purchase of available-for-sale securities, net of proceeds from the sale of investments of $28.3 million and $62.8 million, respectively.

In the first three months of 2023 and 2022 cash used in investing activities also included capital expenditures totaling $8.6 million and $6.8 million, respectively.

Investing activities consumed $48.1 million of cash in the six months ended June 30, 2023 compared to $79.6 million in the six months ended June 30, 2022.

In the first six months of 2023 and 2022 cash used in investing activities consisted of the purchase of available-for-sale securities, net of proceeds from the sale of investments of $30.0 million and $64.4 million, respectively.

In the first six months of 2023 and 2022 cash used in investing activities also included capital expenditures totaling $17.6 million and $15.1 million, respectively.

Capital expenditures for both periods primarily consisted of leasehold improvements and equipment for new off-campus classroom and laboratory sites, as well as purchases of computer equipment, internal use software projects and furniture and equipment to support our increasing employee headcount.

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Cash Flows from Financing Activities

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

Net cash used in financing activities

Financing activities consumed $41.2 million of cash in the three months ended March 31, 2023 compared to $399.6 million in the three months ended March 31, 2022.

During the three months ended March 31, 2023 and 2022, $34.9 million and $394.9 million, respectively was used to purchase treasury stock in accordance with GCE’s share repurchase program.

Financing activities consumed $86.6 million of cash in the six months ended June 30, 2023 compared to $528.0 million in the six months ended June 30, 2022.

During the six months ended June 30, 2023 and 2022, $80.3 million and $523.4 million, respectively was used to purchase treasury stock in accordance with GCE’s share repurchase program.

In 2023 and 2022, $6.3 million and $4.6 million, respectively, of cash was utilized to purchase common shares withheld in lieu of income taxes resulting from the vesting of restricted share awards.

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The amount and timing of future share repurchases, if any, will be made as market and business conditions warrant.

We repurchased 309,978 shares of common stock in the three months ended March 31, 2023.

At March 31, 2023, there remains $160.9 million available under our share repurchase authorization .

We repurchased 728,410 shares of common stock in the six months ended June 30, 2023.

At June 30, 2023, there remains $115.6 million available under our share repurchase authorization .

Off-Balance Sheet Arrangements

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis