What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-06 compared with 2024-05-07 · 114 added, 55 removed, 123 unchanged (58% of the section changed)

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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 wo rk 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 wo rk 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.

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 2023 Form 10-K for the fiscal year ended December 31, 2023.

During the three months ended March 31, 2024, there were no significant changes in our critical accounting policies.

During the six months ended June 30, 2024, there were no significant changes in our critical accounting policies.

Results of Operations

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Three Months Ended

Six Months Ended

Costs and expenses

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General and administrative

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Service revenue .

Our service revenue for the three months ended March 31, 2024 was $274.7 million, an increase of $24.6 million, or 9.8%, as compared to service revenue of $250.1 million for the three months ended March 31, 2023.

The increase year over year in service revenue was primarily due to an increase in GCU enrollments to 116,952 at March 31, 2024, an increase of 7.7% over enrollments at March 31, 2023 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 first quarter of 2024 as compared to the prior year period .

Our service revenue for the three months ended June 30, 2024 was $227.5 million, an increase of $16.9 million, or 8.0%, as compared to service revenue of $210.6 million for the three months ended June 30, 2023.

The increase year over year in service revenue was primarily due to an increase in GCU enrollments to 102,676 at June 30, 2024, an increase of 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 of 12.1% 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, 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, 2024 was also positively 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, 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 in service revenue from the second quarter of 2024 to the first quarter of 2024 in comparison to the prior year.

In addition, contract modifications for some of our university partners in which the revenue share percentage was reduced in exchange for us no longer reimbursing the partner for certain faculty costs and the termination of one university partner contract at the end of the Spring 2024 semester had the effect of reducing revenue per student.

Partner enrollments totaled 106,307 at June 30, 2024 as compared to 99,526 at June 30, 2023.

Although partner enrollments at our off-campus classroom and laboratory sites returned to year over year growth in 2024, some existing partners continue to experience reduced incoming cohort sizes which has slowed the growth.

We believe the growth in the number of ABSN students is 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 completed bachelor’s degree to enter their programs.

The majority of those partners that have made the adjustment to admit students without a completed bachelor’s degree had new enrollment growth on a year over year basis in the Spring and Summer 2024 semesters.

We opened five sites in the year ended December 31, 2023 and four sites in the six months ended June 30, 2024 increasing the total number of these sites to 43 at June 30, 2024, which has also positively impacted the enrollment growth.

Enrollments for GCU ground students were 7,397 at June 30, 2024 up from 7,327 at June 30, 2023 primarily due to the increase in ABSN students between years.

GCU online enrollments were 95,279 at June 30, 2024, up from

88,645 at June 30, 2023, an increase of 7.5% between years.

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 June 30, 2024 were $41.0 million, an increase of $2.0 million, or 5.2%, as compared to technology and academic services expenses of $39.0 million for the three months ended June 30, 2023.

This increase was primarily due to increases in occupancy and depreciation and in other technology and academic costs of $1.5 million and $1.3 million, respectively, partially offset by a decrease in employee compensation and related expenses, including share-based compensation of $0.8 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 22 university partners, and their increased enrollment growth.

The decrease in employee compensation and related expenses is primarily due to decreased faculty reimbursements due to changes in our agreements with certain university partners whereby we no longer reimburse these partners for their faculty costs and the decline in some of our other partners’ enrollments partially offset by increased headcount to support our 22 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 by 0.5% to 18.0% for the three months ended June 30, 2024, from 18.5% for the three months ended June 30, 2023.

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 continue to increase in the future as we open more off-site classroom and laboratory sites although these increases might be offset by lower faculty reimbursements if more partners choose to adjust their contracts.

Counseling services and support .

Our counseling services and support expenses for the three months ended June 30, 2024 were $78.1 million, an increase of $5.7 million, or 7.9%, as compared to counseling services and support expenses of $72.4 million for the three months ended June 30, 2023.

This increase was primarily attributable to increases in employee compensation and related expenses including share-based compensation, in occupancy and depreciation costs and in other counseling services and support expenses of $4.4 million, $1.1 million and $0.2 million, respectively.

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 occupancy and depreciation is primarily related to higher depreciation expense associated with our continued enhancements to IT infrastructure and internal-use software development.

The increase in other counseling services and support expenses is primarily the result of increased travel costs in support of servicing our 22 university partners.

Our counseling services and support expenses as a percentage of revenue decreased by 0.1% to 34.3% for the three months ended June 30, 2024, from 34.4% for the three months ended June 30, 2023 primarily due our ability to leverage our counseling services and support expenses across an increasing revenue base.

We anticipate that counseling services and support expense will continue to increase in the future as we continue to invest to meet our partners’ needs.

Marketing and communication .

Our marketing and communication expenses for the three months ended June 30, 2024 were $52.9 million, an increase of $2.1 million, or 4.1%, as compared to marketing and communication expenses of $50.8 million for the three months ended June 30, 2023.

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 $1.7 million, increased employee compensation, including share-based compensation of $0.2 million, an increase in occupancy and depreciation of $0.1 million and an increase in other marketing and communication expenses of $0.1 million.

Our marketing and communication expenses as a percentage of revenue decreased by 0.8% to 23.3% for the three months ended June 30, 2024, from 24.1% for the three months ended June 30, 2023, primarily due to our ability to leverage our marketing and communication expenses across an increasing revenue base.

Although we will continue to invest heavily in this area, we are hopeful that we will see leverage in marketing and communication costs in 2024.

General and administrative .

Our general and administrative expenses for the three months ended June 30, 2024 were $10.6 million, a decrease of $0.3 million, or 2.2%, as compared to general and administrative expenses of $10.9 million for the three months ended June 30, 2023.

This decrease was primarily attributable to a decrease in professional fees, primarily lower legal costs, and in other administrative expenses, primarily lower travel and charitable

contributions of $0.8 million and $0.8 million, respectively.

These decreases were partially offset by an increase in employee compensation, including share-based compensation of $1.3 million, which includes $1.1 million in severance costs recorded in the second quarter of 2024 related to an executive that resigned effective June 30, 2024.

Our general and administrative expenses as a percentage of revenue decreased by 0.5% to 4.7% for the three months ended June 30, 2024, from 5.2% for the three months ended June 30, 2023, primarily due to our ability to leverage our general and administrative expenses across an increasing revenue base and the lower professional fees partially offset by the severance costs.

General and administrative expenses as a percentage of revenue could increase in 2024 if legal costs rise in the second half of the year.

Amortization of intangible assets .

Amortization of intangible assets for the three months ended June 30, 2024 and 2023 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, 2024 was $4.1 million, as compared to investment interest and other for the three months ended June 30, 2023 of $2.6 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, 2024 was $12.0 million, an increase of $2.9 million, or 32.0%, as compared to income tax expense of $9.1 million for the three months ended June 30, 2023.

Our effective tax rate was 25.5% during the second quarter of 2024 compared to 23.8% during the second quarter of 2023.

The effective tax rate increased year over year due to higher state income taxes.

Our net income for the three months ended June 30, 2024 was $34.9 million, an increase of $5.9 million, or 20.4%, as compared to $29.0 million for the three months ended June 30, 2023, due to the factors discussed above.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Service revenue .

Our service revenue for the six months ended June 30, 2024 was $502.1 million, an increase of $41.4 million, or 9.0%, as compared to service revenue of $460.7 million for the six months ended June 30, 2023.

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 .

The additional day for leap year in 2024 added additional service revenue of $1.5 million as compared to the prior year.

Partner enrollments totaled 120,788 at March 31, 2024 as compared to 112,588 at March 31, 2023.

University partner enrollments at our off-campus classroom and laboratory sites were 4,486, an increase of 4.0% over enrollments at March 31, 2023, which includes 650 and 360 GCU students at March 31, 2024 and 2023, respectively.

Although partner enrollments at our off-campus classroom and laboratory sites returned to year over year growth this quarter, some existing partners continue to experience reduced incoming cohort sizes which has slowed the growth.

Contract modifications for some of our university partners in which the revenue share percentage was reduced in exchange for us no longer reimbursing the partner for certain faculty costs and the termination of one university partner contract at the end of the Spring 2024 semester had the effect of reducing revenue per student.

Partner enrollments totaled 106,307 at June 30, 2024 as compared to 99,526 at June 30, 2023.

The majority of those partners that have made the adjustment to admit students without a completed bachelor’s degree had new enrollment growth on a year over year basis in the Spring 2023 semester.

We opened five sites in the year ended December 31, 2023 and two sites in the three months ended March 31, 2024 increasing the total number of these sites to 42 at March 31, 2024, which has also positively impacted the enrollment growth.

Enrollments for GCU ground students were 22,965 at March 31, 2024 up from 22,568 at March 31, 2023.

GCU online enrollments were 93,987 at March 31, 2024, up from 86,065 at March 31, 2023, an increase of 9.2% between years.

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 of 7.5% between years.

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, 2024 were $39.1 million, an increase of $1.6 million, or 4.3%, as compared to technology and academic

services expenses of $37.5 million for the three months ended March 31, 2023.

Our technology and academic services expenses for the six months ended June 30, 2024 were $80.1 million, an increase of $3.6 million, or 4.8%, as compared to technology and academic services expenses of $76.5 million for the six months ended June 30, 2023.

This increase was primarily due to increases in occupancy and depreciation and in other technology and academic costs of $2.8 million and $2.4 million, respectively, partially offset by a decrease in employee compensation and related expenses, including share-based compensation of $1.6 million.

The decrease in employee compensation and related expenses is primarily due to decreased faculty reimbursements due to the decline in some of our other partners’ enrollments and changes in our agreements with certain university partners whereby we no longer reimburse these partners for their faculty costs partially offset by increased headcount to support our 23 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 by 0.8% to 14.2% for the three months ended March 31, 2024, from 15.0% for the three months ended March 31, 2023.

The decrease in employee compensation and related expenses is primarily due to decreased faculty reimbursements due to changes in our agreements with certain university partners whereby we no longer reimburse these partners for their faculty costs and the decline in some of our other partners’ enrollments partially offset by increased headcount to support our 22 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 by 0.6% to 16.0% for the six months ended June 30, 2024, from 16.6% for the six months ended June 30, 2023.

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

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Counseling services and support .

Our counseling services and support expenses for the three months ended March 31, 2024 were $82.9 million, an increase of $9.6 million, or 13.0%, as compared to counseling services and support expenses of $73.3 million for the three months ended March 31, 2023.

Our counseling services and support expenses for the six months ended June 30, 2024 were $161.0 million, an increase of $15.3 million, or 10.5%, as compared to counseling services and support expenses of $145.7 million for the six months ended June 30, 2023.

This increase was primarily attributable to increases in employee compensation and related expenses including share-based compensation and benefits, in other counseling services and support expenses and in occupancy and depreciation costs of $11.6 million, $2.0 million and $1.7 million, respectively.

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The increase in occupancy and depreciation is primarily related to higher depreciation expense associated with our continued enhancements to IT infrastructure and internal-use software development.

Our counseling services and support expenses as a percentage of revenue increased by 0.9% to 30.2% for the three months ended March 31, 2024, from 29.3% for the three months ended March 31, 2023 primarily due to the significant increase year over year in travel expenses and headcount.

We anticipate that counseling services and support expense will continue to increase in the future as we continue to invest to meet our partners’ needs but are hopeful that we will see leverage in counseling services and support expenses as a percentage of revenue in 2024.

Our counseling services and support expenses as a percentage of revenue increased by 0.5% to 32.1% for the six months ended June 30, 2024, from 31.6% for the six months ended June 30, 2023 primarily due to the significant increase year over year in travel expenses and headcount.

We anticipate that counseling services and support expense will continue to increase in the future as we continue to invest to meet our partners’ needs.

Marketing and communication .

Our marketing and communication expenses for the three months ended March 31, 2024 were $55.4 million, an increase of $2.5 million, or 4.6%, as compared to marketing and communication expenses of $52.9 million for the three months ended March 31, 2023.

Our marketing and communication expenses for the six months ended June 30, 2024 were $108.2 million, an increase of $4.5 million, or 4.4%, as compared to marketing and communication expenses of $103.7 million for the six months ended June 30, 2023.

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 $3.8 million, increased employee compensation, including share-based compensation and benefits of $0.2 million, an increase in occupancy and depreciation of $0.2 million and an increase in other marketing and communication expenses of $0.3 million.

Our marketing and communication expenses as a percentage of revenue decreased by 0.9% to 20.2% for the three months ended March 31, 2024, from 21.1% for the three months ended March 31, 2023, primarily due to our ability to leverage our marketing and communication expenses across an increasing revenue base.

Our marketing and communication expenses as a percentage of revenue decreased by 0.9% to 21.6% for the six months ended June 30, 2024, from 22.5% for the six months ended June 30, 2023, primarily due to our ability to leverage our marketing and communication expenses across an increasing revenue base.

Although we will continue to invest heavily in this area, we are hopeful that we will see leverage in marketing and communication costs in 2024.

General and administrative .

Our general and administrative expenses for the three months ended March 31, 2024 were $10.7 million, an increase of $0.9 million, or 9.6%, as compared to general and administrative expenses of $9.8 million for the three months ended March 31, 2023.

This increase was primarily attributable to an increase in professional fees and an increase in employee compensation, including share-based compensation and benefits of $0.8 million and $0.2 million respectively.

These increases were partially offset by a decrease in other administrative expenses of $0.1 million.

Our professional fees increased between years primarily due to higher legal costs.

Our general and administrative expenses as a percentage of revenue stayed flat at 3.9% for both of the three months ended March 31, 2024 and 2023 due to our ability to leverage our general and administrative expenses across an increasing revenue base.

General and administrative expenses as a percentage of revenue could increase in 2024 due to higher expected legal costs.

Our general and administrative expenses for the six months ended June 30, 2024 were $21.4 million, an increase of $0.7 million, or 3.4%, as compared to general and administrative expenses of $20.7

million for the six months ended June 30, 2023.

This increase was primarily attributable to an increase in employee compensation, including share-based compensation and benefits of $1.6 million, which includes $1.1 million in severance costs recorded for an executive that resigned June 30, 2024.

These increases were partially offset by a decrease in other administrative expenses of $0.9 million primarily due to lower travel and timing on charitable contributions.

Our general and administrative expenses as a percentage of revenue decreased by 0.2% to 4.3% for the six months ended June 30, 2024, as compared to 4.5% for the six months ended June 30, 2023 due to our ability to leverage our general and administrative expenses across an increasing revenue base partially offset by the severance costs.

General and administrative expenses as a percentage of revenue could increase in 2024 if legal costs rise in the second half of 2024.

Amortization of intangible assets .

Amortization of intangible assets for the three months ended March 31, 2024 and 2023 were $2.1 million for both periods.

Amortization of intangible assets for the six months ended June 30, 2024 and 2023 were $4.2 million for both periods.

Investment interest and other .

Investment interest and other for the three months ended March 31, 2024 was $3.7 million, as compared to investment interest and other for the three months ended March 31, 2023 of $2.2 million due to higher investment balances and higher returns on those balances.

Investment interest and other for the six months ended June 30, 2024 was $7.8 million, as compared to investment interest and other for the six months ended June 30, 2023 of $4.7 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, 2024 was $20.2 million, an increase of $3.2 million, or 18.5%, as compared to income tax expense of $17.0 million for the three months ended March 31, 2023.

Our effective tax rate was 22.9% during the first quarter of 2024 compared to 22.3% during the first quarter of 2023.

In the first quarter of 2024, the effective tax rate was favorably impacted by excess tax benefits of $1.5 million as compared to $0.9 million in the first quarter of 2023.

The effective tax rate increased year over year due to higher taxable income and in the first quarter of 2023 the effective tax rate was favorably impacted by state income tax refunds.

Our net income for the three months ended March 31, 2024 was $68.0 million, an increase of $8.4 million, or 14.2%, as compared to $59.6 million for the three months ended March 31, 2023, due to the factors discussed above.

Income tax expense for the six months ended June 30, 2024 was $32.1 million, an increase of $6.0 million, or 23.2%, as compared to income tax expense of $26.1 million for the six months ended June 30, 2023.

Our effective tax rate was 23.8% during the six months ended June 30, 2024 compared to 22.8% during the six months ended June 30, 2023.

In the six months ended June 30, 2024, the effective tax rate was favorably impacted by excess tax benefits of $1.5 million as compared to $0.9 million in the six months ended June 30, 2023.

The effective tax rate increased year over year due to higher state income taxes.

Our net income for the six months ended June 30, 2024 was $102.9 million, an increase of $14.4 million, or 16.2%, as compared to $88.5 million for the six months ended June 30, 2023, 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 $46.2 million between December 31, 2023 and March 31, 2024, which was largely attributable to cash flows from operations during the three months ended March 31, 2024 exceeding share repurchases, changes in our investment balances and capital expenditures.

Our liquidity position, as measured by cash and cash equivalents and investments increased by $97.3 million between December 31, 2023 and June 30, 2024, which was largely attributable to cash flows from operations during the six months ended June 30, 2024 exceeding share repurchases, changes in our investment balances and capital expenditures.

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 and investments, 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 increase in cash generated from operating activities between the three months ended March 31, 2023 and the three months ended March 31, 2024 was primarily due to increased income and changes in working capital balances, primarily accounts payable, accrued liabilities and accounts receivable.

Accounts payable increased between December 31, 2023 and March 31, 2024 by $10.0 million more than it did between December 31, 2022 and March 31, 2023 due to the timing of check runs during those periods and accrued liabilities decreased by $6.2 million less than it did between December 31, 2022 and March 31, 2023 due to the timing of payroll disbursements.

Accounts receivable increased by $7.7 million more than it did between December 31, 2022 and March 31, 2023 due primarily to higher revenues between periods.

The increase in cash generated from operating activities between the six months ended June 30, 2023 and the six months ended June 30, 2024 was primarily due to increased income and changes in working capital balances, primarily accrued liabilities, income taxes receivable/payable and accounts receivable.

Accrued liabilities increased between December 31, 2023 and June 30, 2024 by $8.8 million more than it did between December 31, 2022 and June 30, 2023 due to the timing of payroll disbursements.

Income taxes receivable/payable increased between December 31, 2023 and June 30, 2024 by $4.0 million more than it did between December 31, 2022 and June 30, 2023 due to timing of income tax payments.

These increases were partially offset by accounts receivable decreasing by $3.4 million more than it did between December 31, 2022 and June 30, 2023 due primarily to timing of the collections of our other university partners.

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 $5.3 million of cash in the three months ended March 31, 2024 compared to $37.1 million in the three months ended March 31, 2023.

In the first three months of 2024 and 2023 cash used in investing activities included capital expenditures totaling $9.0 million and $8.6 million, respectively.

Investing activities consumed $20.0 million of cash in the six months ended June 30, 2024 compared to $48.1 million in the six months ended June 30, 2023.

In the first six months of 2024 and 2023 cash used in investing activities included capital expenditures totaling $17.9 million and $17.6 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 used in investing activities also includes net investment activity.

In the first three months of 2024, proceeds, net of purchases of available-for sale securities were $3.8 million, while in the first three months of 2023 the purchase of available-for-sale securities, net of proceeds from the sale of investments of $28.3 million.

In the six months ended June 30, 2024 and 2023, the purchase of available-for-sale securities, net of proceeds from the sale of investments were $1.9 million and $30.0 million, respectively.

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 $30.0 million of cash in the three months ended March 31, 2024 compared to $41.2 million in the three months ended March 31, 2023.

During the three months ended March 31, 2024 and 2023, $22.6 million and $34.9 million, respectively was used to purchase treasury stock in accordance with GCE’s share repurchase program.

Financing activities consumed $68.7 million of cash in the six months ended June 30, 2024 compared to $86.6 million in the six months ended June 30, 2023.

During the six months ended June 30, 2024 and 2023, $61.3 million and $80.3 million, respectively was used to purchase treasury stock in accordance with GCE’s share repurchase program.

In 2024 and 2023, $7.4 million and $6.3 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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Share Repurchase Program

The Board of Directors has authorized under its existing stock repurchase program, an aggregate authorization for share repurchases since the initiation of the program of $2,045.0 million.

The current expiration date on the repurchase authorization by our Board of Directors 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 by our Board of

Directors is March 1, 2025.

Repurchases occur at the Company’s discretion and the Company may modify, suspend or discontinue the repurchase authorization at any time.

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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 171,670 shares of common stock in the three months ended March 31, 2024.

At March 31, 2024, there remains $242.5 million available under our share repurchase authorization .

We repurchased 452,684 shares of common stock in the six months ended June 30, 2024.

At June 30, 2024, there remains $203.8 million available under our share repurchase authorization .

Off-Balance Sheet Arrangements

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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