What changed in this filing

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Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 79 added, 55 removed, 445 unchanged (23% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands, except per share data)

24 unchanged sentences

Accounts receivable, net

Insurance receivable

Income tax receivable

20 unchanged sentences

Preferred stock, $ 0.01 par value, 10,000 shares authorized;

0 shares issued and outstanding at March 31, 2024 and December 31, 2023

0 shares issued and outstanding at June 30, 2024 and December 31, 2023

Common stock, $ 0.01 par value, 100,000 shares authorized;

54,087 and 53,970 shares issued and 29,839 and 29,953 shares outstanding at March 31, 2024 and December 31, 2023, respectively

Treasury stock, at cost, 24,248 and 24,017 shares of common stock at March 31, 2024 and December 31, 2023, respectively

54,090 and 53,970 shares issued and 29,549 and 29,953 shares outstanding at June 30, 2024 and December 31, 2023, respectively

Treasury stock, at cost, 24,541 and 24,017 shares of common stock at June 30, 2024 and December 31, 2023, respectively

( 1,918,810 )

9 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands)

Other comprehensive income, net of tax:

Unrealized (losses) gains on available-for-sale securities, net of taxes of $ 18 and $ 37 for the three months ended March 31, 2024 and 2023, respectively

Unrealized losses on available-for-sale securities, net of taxes of $ 4 and $ 86 for the three months ended June 30, 2024 and 2023, respectively, and $ 22 and $ 49 for the six months ended June 30, 2024 and 2023, respectively

Comprehensive income

3 unchanged sentences

(In thousands)

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Treasury Stock

8 unchanged sentences

( 1,879,697 )

Three Months Ended March 31, 2023

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at June 30, 2024

( 1,918,810 )

Six Months Ended June 30, 2023

Treasury Stock

8 unchanged sentences

( 1,752,844 )

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at June 30, 2023

( 1,798,619 )

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

(In thousands)

23 unchanged sentences

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents and restricted cash

Net increase in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash, beginning of period

5 unchanged sentences

Purchases of property and equipment included in accounts payable

Insurance receivable for litigation settlement to be paid by insurance

ROU Asset and Liability recognition

Excise tax on treasury stock repurchases

9 unchanged sentences

We also provide education services to numerous university partners across the United States.

GCE has continued to add additional university partners.

In the healthcare field, we work in partnership with a growing number of top universities and healthcare networks across the country, offering healthcare-related academic programs at off-campus classroom and laboratory sites located near healthcare providers and developing high-quality, career-ready graduates who enter the workforce ready to meet the demands of the healthcare industry.

In the healthcare field, we work in partnership with a number of top universities and healthcare networks, offering healthcare-related academic programs at off-campus classroom and laboratory sites located near healthcare providers and developing high-quality, career-ready graduates who enter the workforce ready to meet the demands of the healthcare industry.

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

As of March 31, 2024, GCE provides education services to 23 university partners across the United States.

As of June 30, 2024, GCE provides education services to 22 university partners across the United States.

Summary of Significant Accounting Policies

10 unchanged sentences

These consolidated financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 from which the December 31, 2023 balance sheet information was derived.

As of March 31, 2024 and December 31, 2023, the Company considered its investments in corporate bonds, agency bonds and commercial paper as available-for-sale securities based on the Company’s intent for the respective securities.

As of June 30, 2024 and December 31, 2023, the Company considered its investments in corporate bonds, agency bonds, treasury bills and commercial paper as available-for-sale securities based on the Company’s intent for the respective securities.

Available-for-sale securities are carried at fair value, determined using Level 1 and Level 2 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets.

3 unchanged sentences

Insurance Receivable

The Company recorded a insurance receivable on March 31, 2024 for $ 25,500 for the Shareholder Litigation matter discussed in detail in Note 8 of the consolidated financial statements.

The Company’s insurance carriers will fund the entire settlement amount.

The Company recorded an insurance receivable on March 31, 2024 for $ 25,500 for the Shareholder Litigation matter discussed in detail in Note 8 of the consolidated financial statements.

The Company’s insurance carriers have funded the entire settlement amount as of June 30, 2024 and the receivable has been removed from the consolidated financial statements.

Grand Canyon Education, Inc.

22 unchanged sentences

The Company has concluded that the most appropriate method to amortize the deferred content assets is on a straight-line basis over the estimated life of the course, which is generally four years which corresponds with course’s review and major revision cycle.

As of March 31, 2024 and December 31, 2023, $ 726 and $ 746 , respectively, net of amortization, of deferred content assets are included in other assets, long-term in the Company’s consolidated balance sheets and amortization is included in technical and academic services where the costs originated.

As of June 30, 2024 and December 31, 2023, $ 728 and $ 746 , respectively, net of amortization, of deferred content assets are included in other assets, long-term in the Company’s consolidated balance sheets and amortization is included in technical and academic services where the costs originated.

Long-Lived Assets

22 unchanged sentences

The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable.

There were no indicators that the carrying amount of the finite-lived intangible assets were impaired as of March 31, 2024.

There were no indicators that the carrying amount of the finite-lived intangible assets were impaired as of June 30, 2024.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets.

36 unchanged sentences

The Company utilizes the allowance method to provide for doubtful accounts based on its evaluation of the expected credit losses.

There have been no amounts written off and no reserves established as of March 31, 2024.

There have been no amounts written off and no reserves established as of June 30, 2024.

The Company will continue to review and revise its allowance methodology based on its collection experience with its partners.

1 unchanged sentence

Billings for some university partners do not occur until after the service period has commenced and final enrollment information is available.

Given that the Fall semester has ended as of December 31 of each year unbilled revenue is low at year end whereas at the end of each fiscal quarter a semester is ongoing and thus unbilled revenue is higher.

Our unbilled revenue of $ 2,956 and $ 188 as of March 31, 2024 and December 31, 2023, respectively, are included in accounts receivable in our consolidated balance sheets.

Deferred revenue represents the excess of amounts received as compared to amounts recognized in revenue on our consolidated statements of income as of the end of the reporting period, and such amounts

Given that the Fall semester ends on December 31 of each year unbilled revenue is low at year end (whereas a semester is ongoing at the end of each other fiscal quarter, and unbilled revenue is thus higher at the end of our first three quarters).

Our unbilled revenue of $ 10,055 and $ 188 as of June 30, 2024 and December 31, 2023, respectively, are included in accounts receivable in our consolidated balance sheets.

Deferred revenue represents the excess of amounts received as compared to amounts recognized in revenue on our consolidated statements of income as of the end of the

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

are reflected as a current liability on our consolidated balance sheets.

reporting period, and such amounts are reflected as a current liability on our consolidated balance sheets.

We generally receive payments for our services billed within 30 days of invoice.

37 unchanged sentences

The Company believes the credit risk related to cash equivalents and investments is limited due to its adherence to an investment policy that requires investments to have a minimum BBB rating, depending on the type of security, by at least one major rating agency at the time of purchase.

All of the Company’s cash equivalents and investments as of March 31, 2024 and December 31, 2023 consist of investments rated BBB or higher by at least one rating agency.

All of the Company’s cash equivalents and investments as of June 30, 2024 and December 31, 2023 consist of investments rated BBB or higher by at least one rating agency.

Additionally, the Company utilizes at least one financial institution to conduct initial and ongoing credit analysis on its investment portfolio to monitor and lower the potential impact of market risk associated with its cash equivalents and investment portfolio.

1 unchanged sentence

Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.

At March 31, 2024 and December 31, 2023, the Company had $ 195,207 and $ 145,474 , respectively, in excess of the FDIC insured limit.

At June 30, 2024 and December 31, 2023, the Company had $ 240,317 and $ 145,474 , respectively, in excess of the FDIC insured limit.

The Company is also subject to credit risk for its accounts receivable balance.

Our dependence on our most significant university partner, with 89.7 % and 88.5 % of total service revenue for the three-month periods ended March 31, 2024 and 2023, respectively, subjects us to the risk that declines in our customer’s operations would result in a sustained reduction in service revenue for the Company.

Our dependence on our most significant university partner, with 88.4 % and 87.2 % of total service revenue for the six-month periods ended June 30, 2024 and 2023, respectively, subjects us to the risk that declines in our customer’s operations would result in a sustained reduction in service revenue for the Company.

Use of Estimates

9 unchanged sentences

Improvements to Reportable Segment Disclosure,” effective for fiscal years beginning after December 15, 2023, with early adoption permitted.

The ASU adds disclosure requirements for segment expense information.

The ASU clarifies that single reportable segment entities are subject to Topic 280 in its entirety.

This ASU adds disclosure requirements for segment expense information and clarifies that single reportable segment entities are subject to Topic 280 in its entirety.

The Company adopted this standard effective January 1, 2024 and the adoption of this guidance did not have a material impact on the Company’s financial condition, results of operations or statements of cash flows.

1 unchanged sentence

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

Improvements to Income Tax Disclosures.” This ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied either prospectively or retrospectively.

4 unchanged sentences

(In thousands, except per share data)

As of March 31, 2024 and December 31, 2023, the Company had investments of $ 94,485 and $ 98,031 , respectively, classified as available-for-sale securities.

As of March 31, 2024, the Company had available-for-sale investments comprised of the following:

As of March 31, 2024

As of June 30, 2024 and December 31, 2023, the Company had investments of $ 100,498 and $ 98,031 , respectively, classified as available-for-sale securities.

As of June 30, 2024, the Company had available-for-sale investments comprised of the following:

As of June 30, 2024

Corporate bonds

Treasury bills

Total investments

For the three months ended March 31, 2024 and 2023, the net unrealized losses and gains were $ 56 and $ 119 , respectively, net of taxes.

For the six months ended June 30, 2024 and 2023, the net unrealized losses were $ 69 and $ 157 , respectively, net of taxes.

Available-for-sale debt securities are carried at fair value on the consolidated balance sheets.

9 unchanged sentences

Three Months Ended

Six Months Ended

Basic weighted average shares outstanding

2 unchanged sentences

Diluted weighted average shares outstanding excludes the incremental effect of unvested restricted stock in accordance with the treasury stock method.

For the three-month periods ended March 31, 2024 and 2023, approximately 78 and 100 , respectively, of the Company’s restricted stock awards outstanding were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive.

These restricted stock awards could be dilutive in the future.

For the three-month periods ended June 30, 2024 and 2023, approximately nil and 107 , respectively, and for the six-month periods ended June 30, 2024 and 2023, approximately 39 and 103 , respectively, of the Company’s restricted stock awards outstanding were excluded from the calculation of diluted

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

earnings per share as their inclusion would have been anti-dilutive.

These restricted stock awards could be dilutive in the future.

Property and Equipment

11 unchanged sentences

Amortizable intangible assets consist of the following as of:

March 31, 2024

June 30, 2024

Average Useful

4 unchanged sentences

The Company has operating leases for off-campus classroom and laboratory sites, office space, office equipment, and optical fiber communication lines.

These leases have remaining lease terms that range from two months to 10 years and one month.

These leases have remaining lease terms that range from one month to 10 years and 8 months.

At lease inception, we determine the lease term by assuming no exercises of renewal options due to the Company’s constantly changing geographical needs for its university partners.

Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets and we recognize lease expense for these leases on a straight-line basis over the lease term.

The Company had operating lease costs of $ 3,877 and $ 3,018 for the three-month periods ended March 31, 2024 and 2023, respectively.

Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets and we recognize lease expense for these leases on

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

As of March 31, 2024, the Company had $ 29,578 of non-cancelable operating lease commitments for five off-campus classroom and laboratory sites that had not yet commenced.

a straight-line basis over the lease term.

The Company had operating lease costs of $ 8,037 and $ 6,170 for the six-month periods ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, the Company had $ 18,281 of non-cancelable operating lease commitments for three off-campus classroom and laboratory sites that had not yet commenced.

The Company’s weighted-average remaining lease term relating to its operating leases is 7.93 years, with a weighted-average discount rate of 4.14 % .

The cash paid for operating lease liabilities was $ 3,541 and $ 2,600 for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, the Company had no financing leases.

Future payment obligations with respect to the Company’s operating leases, which were existing at March 31, 2024, by year and in the aggregate, are as follows:

The cash paid for operating lease liabilities was $ 7,279 and $ 5,389 for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, the Company had no financing leases.

Future payment obligations with respect to the Company’s operating leases, which were existing at June 30, 2024, by year and in the aggregate, are as follows:

Year Ending December 31,

22 unchanged sentences

Both complaints alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder and sought unspecified monetary relief, interest, and attorneys’ fees.

On August 13, 2020, the two cases were consolidated and the Fire and Police Association of Colorado, the Oakland County Employees’ Retirement System and the Oakland County Voluntary Employees’ Beneficiary

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

Association Trust were appointed as lead plaintiffs.

Thereafter, the plaintiffs filed a consolidated amended complaint on October 20, 2020, and the Company filed a motion to dismiss on December 21, 2020.

10 unchanged sentences

The defendants filed a motion to dismiss the complaint on April 15, 2024.

The plaintiffs are required to either file a response opposing the motion to dismiss or submit an amended complaint by no later than June 12, 2024.

In response, Plaintiff will be filing an amended complaint on or before August 12, 2024 and Defendants’ motion to dismiss Plaintiff’s amended complaint is due on October 11, 2024.

False Claims Act Matter .

28 unchanged sentences

The Company makes equity incentive grants pursuant to our 2017 Equity Incentive Plan (the “2017 Plan”) under which a maximum of 3,000 shares may be granted.

As of March 31, 2024, 965 shares were available for grants under the 2017 Plan.

As of June 30, 2024, 962 shares were available for grants under the 2017 Plan.

Restricted Stock

During the three months ended March 31, 2024, the Company granted 117 shares of common stock with a service vesting condition to certain of its executives, officers and employees.

During the six months ended June 30, 2024, the Company granted 117 shares of common stock with a service vesting condition to certain of its executives, officers and employees.

The restricted shares have voting rights and vest in five annual installments of 20 %, with the first installment vesting in March of the calendar year following the date of grant (the “first vesting date”) and subsequent installments vesting on each of the four anniversaries of the first vesting date.

Upon vesting, shares will be withheld in lieu of taxes equivalent to the minimum statutory tax withholding required to be paid when the restricted stock vests.

During the three months ended March 31, 2024, the Company withheld 55 shares of common stock in lieu of taxes at a cost of $ 7,446 on the restricted stock vesting dates.

During the six months ended June 30, 2024, the Company withheld 55 shares of common stock in lieu of taxes at a cost of $ 7,446 on the restricted stock vesting dates.

In April 2024, a new non-employee director was appointed to the Board and was granted an initial award of shares pursuant to the Company’s compensation program.

The initial award of shares that were granted to such newly appointed director have voting rights and vest on the one-year anniversary of the date of grant.

In June 2024, following the annual stockholders meeting, the Company granted 3 shares of common stock to the non-employee members of the Company’s Board of Directors.

The restricted shares granted to these directors have voting rights and vest on the earlier of (a) the one-year anniversary of the date of grant or (b) immediately prior to the next annual stockholders meeting.

On June 30, 2024, a named executive officer resigned for “good reason” which resulted in an acceleration of the next tranche of restricted stock awards that would have vested on March 1, 2025.

As a result, the incremental share-based compensation expense from the modification on five restricted stock awards for the accelerated vesting date was $ 558 and is included in the general and administrative expenses in the Company’s consolidated income statement.

In July, 5 shares vested and 2 shares were withheld in lieu of taxes at a cost of $ 324 on the accelerated vesting date.

A summary of the activity related to restricted stock granted under the Company’s Incentive Plan since December 31, 2023 is as follows:

3 unchanged sentences

Forfeited, canceled or expired

Outstanding as of March 31, 2024

Outstanding as of June 30, 2024

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Share-based Compensation Expense

The table below outlines share-based compensation expense for the three months ended March 31, 2024 and 2023 related to restricted stock granted:

The table below outlines share-based compensation expense for the six months ended June 30, 2024 and 2023 related to restricted stock granted:

Technology and academic services

6 unchanged sentences

Treasury Stock

The Board of Directors has authorized under its existing stock repurchase program, an aggregate authorization for share repurchases since the initiation of our program of $ 2,045,000 .

The expiration date on the repurchase authorization is March 1, 2025.

The Board of Directors has authorized share repurchases of up to $ 2,045,000 since the initiation of the Company’s stock repurchase program.

The expiration date on the current repurchase authorization is March 1, 2025.

Repurchases occur at the Company’s discretion.

1 unchanged sentence

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

During the three months ended March 31, 2024 the Company repurchased 172 shares of common stock, at an aggregate cost of $ 22,524 .

As of March 31, 2024, there remained $ 242,530 available under its current share repurchase authorization.

During the six months ended June 30, 2024 the Company repurchased 453 shares of common stock, at an aggregate cost of $ 61,249 .

As of June 30, 2024, there remained $ 203,804 available under its current share repurchase authorization.

Shares repurchased in lieu of taxes are not included in the repurchase plan totals as they were approved in conjunction with the restricted share awards.

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 1. Financial Statements