What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-02-19 compared with 2024-02-13 · 121 added, 182 removed, 557 unchanged (35% of the section changed)

2 unchanged sentences

As of December 31, 2024, we have no derivative financial instruments or derivative commodity instruments.

We invest cash in excess of current operating requirements in short term certificates of deposit and money market instruments, municipal bond portfolios, or municipal mutual funds at multiple financial institutions.

Although we do not currently have any investments, we have historically, and may in the future invest cash in excess of current operating requirements in short term certificates of deposit and money market instruments, municipal bond portfolios, or municipal mutual funds at multiple financial institutions.

Interest rate risk .

1 unchanged sentence

Our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities before their maturity date that have declined in market value due to changes in interest rates.

At December 31, 2023, a 10% increase or decrease in interest rates would not have a material impact on our future earnings, fair values, or cash flows.

At December 31, 2024, we do not currently have any investments, and therefore a 10% increase or decrease in interest rates would not have a material impact on our future earnings, fair values, or cash flows.

Consolidated Financial Statements and Supplementary Data

67 unchanged sentences

Income taxes payable

Deferred revenue

Current portion of lease liability

29 unchanged sentences

General and administrative

Impairment and other

Amortization of intangible assets

1 unchanged sentence

Operating income

Interest income on Secured Note

Interest expense

13 unchanged sentences

Other comprehensive income, net of tax:

Realized gains on available-for-sale securities, net of taxes of $ 17 for the year ended December 31, 2024

Unrealized gains (losses) on available-for-sale securities, net of taxes of $ 151 and $ 168 for the years ended December 31, 2023 and 2022, respectively

8 unchanged sentences

Balance at December 31, 2021

( 1,107,211 )

Comprehensive income

25 unchanged sentences

Share-based compensation

Reversal of credit loss reserve

Depreciation and amortization

1 unchanged sentence

Deferred income taxes

Other, including fixed asset disposals

Other, including impairment and fixed asset disposals

Changes in assets and liabilities:

6 unchanged sentences

Net cash provided by operating activities

Cash flows used in investing activities:

Cash flows provided by (used in) investing activities:

Capital expenditures

Additions of amortizable content

Funding to GCU

Repayment by GCU

Purchases of investments

Proceeds from sale or maturity of investments

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash flows used in financing activities:

Principal payments on notes payable

Repurchase of common shares and shares withheld in lieu of income taxes

Net proceeds from exercise of stock options

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

8 unchanged sentences

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

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Nature of Business

2 unchanged sentences

GCE has developed significant technological solutions, infrastructure and operational processes to provide services to these institutions on a large scale.

GCE’s most significant university partner is Grand Canyon University (“GCU”), an Arizona non-profit corporation that operates a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across ten colleges both online, on ground at its campus in Phoenix, Arizona and at six off-site classroom and laboratory sites.

In January 2019, GCE began providing education services to numerous university partners across the United States, through our wholly owned subsidiary, Orbis Education.

GCE, together with Orbis Education, has continued to add additional university partners.

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

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.

17 unchanged sentences

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

As of December 31, 2023 and 2022, the Company considered investments in corporate bonds, commercial paper, municipal securities, asset backed securities, municipal bonds, and collateralized mortgage obligations as available-for-sale securities based on the Company’s intent for the respective securities.

Available-for-sale securities are

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

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

As of December 31, 2024 the Company had no investments.

As of December 31, 2023 the Company considered 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 quoted market prices and inputs other than quoted prices that are observable for the assets.

Unrealized investment gains and losses, net of tax, are reported as a separate component of other comprehensive income.

6 unchanged sentences

Expenditures that materially extend the useful life of an asset are capitalized.

Construction in progress represents items not yet placed in service and are not depreciated.

Construction in progress represents items not yet placed in service and are not

Depreciation is provided using the straight-line method over the estimated useful lives of the assets.

2 unchanged sentences

Land improvements and buildings are depreciated over lives ranging from 10 to 40 years .

Transaction and Arrangements with GCU

Arrangements with GCU

On July 1, 2018, the Company consummated an Asset Purchase Agreement (the “Asset Purchase Agreement”) with GCU.

In conjunction with the Asset Purchase Agreement, we received a secured note from GCU as consideration for the transferred assets in the initial principal amount of $ 870,097 (the “Secured Note”) which was repaid by GCU in the fourth quarter of 2021.

In connection therewith, the Company and GCU entered into a long-term master services agreement (the “Master Services Agreement”) pursuant to which the Company provides identified technology and academic services, counseling services and support, marketing and communication services, and several back-office services to GCU in return for 60 % of GCU’s tuition and fee revenue.

In conjunction with the Asset Purchase Agreement, the Company and GCU entered into a long-term master services agreement pursuant to which the Company provides identified technology and academic services, counseling services and support, marketing and communication services, and several back-office services to GCU in return for 60 % of GCU’s tuition and fee revenue.

Except for identified liabilities assumed by GCU, GCE retained responsibility for all liabilities of the business arising from pre-closing operations.

12 unchanged sentences

Costs that are capitalized include payroll and payroll-related costs for employees who are directly associated and spend time producing content and payments to faculty and subject matter experts involved in the process.

The Company starts capitalizing content costs when it begins to develop or to convert a particular course, resources have

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

been assigned and a timeline has been set.

The Company starts capitalizing content costs when it begins to develop or to convert a particular course, resources have been assigned and a timeline has been set.

The content asset is placed in service when all work is complete and the curriculum could be used for instruction.

8 unchanged sentences

Right-of-use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

The Company uses its incremental borrowing rate based on the information available at the commencement to determine the present value of lease payments over the lease term.

The Company uses

its incremental borrowing rate based on the information available at the commencement to determine the present value of lease payments over the lease term.

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

15 unchanged sentences

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.

If such intangible assets are not recoverable,

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

a potential impairment loss is recognized to the extent the carrying amounts of the assets exceeds the fair value of the assets.

If such intangible assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amounts of the assets exceeds the fair value of the assets.

Share-Based Compensation

1 unchanged sentence

The fair value of the Company’s restricted stock awards is based on the market price of its common stock on the date of grant.

Stock-based compensation expense related to restricted stock grants is expensed over the vesting period using the straight-line method for Company employees and the Company’s board of directors.

Stock-based compensation expense related to restricted stock grants is expensed over the vesting period using the straight-line method for Company employees and the Company’s board of directors (the “Board of Directors”).

The Company recognizes forfeitures as they occur.

18 unchanged sentences

Realization of the deferred tax assets is principally dependent upon achievement of projected future taxable income.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Commitments and Contingencies

17 unchanged sentences

The Company does not disclose the value of unsatisfied performance obligations because the directly allocable variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation.

The service fees are calculated and settled per the terms of the Services Agreements and result in a settlement duration of less than one year for all partners.

The service fees are calculated and settled per the terms of the Services

Agreements and result in a settlement duration of less than one year for all partners.

There are no refunds or return rights under the Services Agreements.

2 unchanged sentences

The Company utilizes the allowance method to provide for doubtful accounts based on its evaluation of the collectability of the amounts due.

There have been no amounts written off and no reserves established as of December 31, 2023 given historical collection experience.

There have been no amounts written off and no reserves established as of December 31, 2024 given historical collection experience and an evaluation of reasonable and supportable forecasts of economic conditions and other pertinent factors affecting the Company’s customers such as known credit risk or industry trends.

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

2 unchanged sentences

Our unbilled revenue of $ 115 and $ 188 as of December 31, 2024 and 2023, respectively, are included in accounts receivable in our consolidated balance sheets.

Deferred revenue represents the excess of amounts received as

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

compared to amounts recognized in revenue on our consolidated statements of income as of the end of the reporting period, and such amounts are reflected as a current liability on 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 are reflected as a current liability on our consolidated balance sheets.

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

1 unchanged sentence

Allowance for Credit Losses

The Company records its accounts receivable and previously had recorded its Secured Note receivable at the net amount expected to be collected.

The Company records its accounts receivable at the net amount expected to be collected.

Our accounts receivable are derived through education services provided to university partners.

Our Secured Note receivable was derived through the sale of university-related assets to our most significant university partner, GCU.

The Company maintains an allowance for credit losses resulting from our university partners not making payments.

The Company determines the adequacy of the allowance by periodically evaluating each university partner’s balance, considering their financial condition and credit history, and considering current and forecasted economic conditions.

In the first quarter of 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses:

Measurement of Credit Losses on Financial Instruments using a modified retrospective approach.

This model requires consideration of a broader range of reasonable and supportable information and requires the Company to estimate expected credit losses including a measure of the expected risk of credit loss even if that risk is remote over the lifetime of the asset.

Upon adoption, the Company recorded a reserve of $ 5,000 on its long-term Secured Note receivable.

The cumulative effect for the Company upon adoption of this new standard was $ 3,832 , net of taxes of $ 1,168 .

Bad debt expense is recorded as a technology and academic services expense in the consolidated income statement.

In the fourth quarter of 2021, the Secured Note receivable was paid off in full and the credit loss reserve of $ 5,000 was reversed.

The Company will continue to actively monitor other factors on expected credit losses.

12 unchanged sentences

This category also includes an allocation of depreciation, amortization, lease expense, and

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

occupancy costs attributable to the provision of these services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations.

3 unchanged sentences

This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of these services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations.

Impairment and other

Impairment and other primarily includes the write-off of an internal use software project that has been terminated that it had been attempting to develop for its other university partners and costs relating to exiting from certain off-campus classroom and laboratory sites.

Insurance/Self-Insurance

18 unchanged sentences

The Company operates as a single education services company using a core infrastructure that serves the curriculum and educational delivery needs of its university partners.

The Company’s Chief Executive Officer manages the Company’s operations as a whole and no expense or operating income information is generated or evaluated on any component level.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

The Company’s Chief Executive Officer (the “Chief Operating Decision Maker” or “CODM”) manages the Company’s operations as a whole and no expense or operating income information is generated or evaluated on any component level other than consolidated net income.

The education services segment generates revenue through Service Agreements with its university partners, pursuant to which the Company provides integrated technology and academic services, marketing and communication services, and back-office services to its university partners in return for a percentage of tuition and fee revenue.

The accounting policies of the education services segment are the same as those described in the summary of significant accounting policies.

The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets.

The CODM uses consolidated net income to monitor budget versus actual results, which is used to evaluate headcount and compensation decisions.

Recent Accounting Pronouncements

In November 20233, the FASB issued ASU No.

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-07, “Segment Reporting (Topic 280):

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.

The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial condition, results of operations or statements of cash flows.

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.

In December 2023, the FASB issued ASU No.

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.

The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial condition, results of operations or statements of cash flows.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses”.

2024-03 does not change or remove existing expense disclosure requirements but requires disaggregated disclosures about certain expense categories and captions, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses.

2024-03 will become effective for us in fiscal 2027 and in the first quarter of fiscal 2028 for interim reporting.

Retrospective application is permitted.

The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial condition, results of operations or statements of cash flows.

The Company has determined that no other recent accounting pronouncements apply to its operations or could otherwise have a material impact on its consolidated financial statements.

As of December 31, 2024 and 2023, the Company had investments of $ 0 and $ 98,031 , respectively, classified as available-for sale securities.

As of December 31, 2023, the Company had available-for-sale investments comprised of the following:

As of December 31, 2023

Corporate bonds

Total investments

For the year ended December 31, 2023 and 2022, the net unrealized gains and losses were $ 476 and $ 533 , respectively, net of taxes.

The Company sold all its investments in the third quarter of 2024 and the proceeds were invested in cash and cash equivalents.

For the year ended December 31, 2024, the net realized gains were $ 57 and for the years ended December 31, 2023 and 2022, unrealized gains and losses were $ 476 and $ 533 , respectively, net of taxes.

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

1 unchanged sentence

If our assessment indicates that an expected credit loss exists, we determine the portion of the unrealized loss attributable to credit deterioration and record a reserve for the expected credit loss in the allowance for credit losses in technology and academic services in our consolidated income statements.

Available-for-sale securities maturing as of December 31:

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Allowance for Credit Losses

Transfers (3)

Allowance for credit losses

Year ended December 31, 2023

Year ended December 31, 2022

Year ended December 31, 2021

(1) Represents the cumulative effect of the adoption of ASU No.

2016-13 on the Secured Note receivable, which was recorded during the year ended December 31, 2020.

(2) In the fourth quarter of 2021, the Secured Note receivable was paid off in full and the credit loss reserve of $ 5,000 was reversed .

(3) Deductions represent accounts written off, net of recoveries.

Property and Equipment

11 unchanged sentences

Intangible Assets

Identified intangible assets of $ 210,280 consisted primarily of university partner relationships that were valued at $ 210,000 , which arose in connection with the 2019 Acquisition.

Identified intangible assets of $ 210,280 consisted primarily of university partner relationships that were valued at $ 210,000 , which arose in connection with the acquisition of Orbis Education in January 2019.

Amortizable intangible assets consist of the following as of:

4 unchanged sentences

Total amortizable intangible assets, net

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Amortization expense for university partner relationships and trade names for the years ending December 31:

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

These leases have terms that range from five months to 10 years and five months.

These leases have terms that range from one month to ten years and four 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.

1 unchanged sentence

The Company has operating lease costs of $ 16,694 , $ 13,496 and $ 10,666 for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2023, the Company had $ 23,758 of non-cancelable operating lease commitments for five off-campus classroom and laboratory sites and $ 192 for optical fiber communication lines that had not yet commenced.

As of December 31, 2024, the Company had $ 17,029 of non-cancelable operating lease commitments for four 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 7.62 years, with a weighted-average discount rate of 4.22 % .

The cash paid for operating lease liabilities was $ 11,391 for the year ended December 31, 2023.

The cash paid

for operating lease liabilities was $ 14,895 , $ 11,391 and $ 9,537 for the years ended December 31, 2024, 2023 and 2022, respectively.

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

10 unchanged sentences

If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the specific claim if the likelihood of a potential loss is reasonably possible and the amount involved is material.

With respect to the majority of

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

pending litigation matters, the Company’s ultimate legal and financial responsibility, if any, cannot be estimated with certainty and, in most cases, any potential losses related to those matters are not considered probable.

With respect to the majority of pending litigation matters, the Company’s ultimate legal and financial responsibility, if any, cannot be estimated with certainty and, in most cases, any potential losses related to those matters are not considered probable.

Upon resolution of any pending legal matters, the Company may incur charges in excess of presently established reserves.

1 unchanged sentence

Pending Litigation Matters

Shareholder Litigation.

On May 12, 2020, a securities class action complaint was filed in the U.S.

District Court for the District of Delaware by the City of Hialeah Employees’ Retirement System naming the Company, Brian E.

Mueller and Daniel E.

Bachus as defendants for allegedly making false and materially misleading statements regarding the circumstances surrounding the Company’s sale of Grand Canyon University (the “University”) to a non-profit entity on July 1, 2018 and the subsequent decision of the U.S.

Department of Education to continue to treat the University as a for-profit institution for education regulatory purposes (collectively, the “Conversion”).

The complaint asserted a putative class period stemming from January 5, 2018, the date when the Company announced that it had applied to the University’s accreditor for approval of the Conversion, to January 27, 2020, the date prior to the publication of a short-seller report focused on the Conversion.

A substantially similar complaint was filed in the same court by Grant Walsh on June 12, 2020 making similar allegations against the Company, Mr.

Mueller and Mr.

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 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.

On August 23, 2021, the Court granted the Company’s motion to dismiss in its entirety but permitted plaintiffs to file a further amended complaint to correct deficiencies in the initial complaint.

The plaintiffs filed further amended complaints on September 28, 2021 and January 21, 2022, and the Company filed a further motion to dismiss on March 15, 2022.

On March 28, 2023, the Company’s motion to dismiss was denied.

On January 5, 2024, plaintiffs moved for class certification and the briefing on plaintiffs’ motion is ongoing.

On December 22, 2023, the Company was named as a nominal defendant and certain of the Company’s current and former directors and officers were named as defendants in a shareholder derivative lawsuit filed in the Delaware Court of Chancery related to, among other things, the allegations in the aforementioned securities class action.

The complaint asserts claims for breach of fiduciary duty, unjust enrichment, aiding and abetting breach of fiduciary duty, and corporate waste against all defendants.

There is no pending deadline for Defendants to answer or move to dismiss the complaint.

The Company intends to defend itself in these legal proceedings vigorously.

The outcome of these legal proceedings is uncertain at this point.

At present, the Company cannot reasonably estimate a range of loss for these actions based on the information available to the Company.

Accordingly, the Company has not accrued any liability associated with these actions.

FTC Complaint.

On December 27, 2023, a complaint was filed in the U.S.

District Court for the District of Arizona by the Federal Trade Commission (“FTC”) naming GCU, GCE, and Brian E.

Mueller, our Chief Executive Officer, as defendants for allegedly (i) violating Section 5(a) of the FTC Act by making false and deceptive statements regarding GCU’s status as a non-profit university and the cost to complete certain of GCU’s doctoral programs, and (ii) violating the FTC’s Telemarketing Sales Rule by making the alleged false and deceptive statements in connection with the telemarketing of education services, and making telemarketing sales calls to persons who have opted out of receiving telemarketing sales calls from GCU or GCE or who are otherwise listed on the national “do not call” registry.

The complaint followed upon the previously disclosed civil investigative demands that that the FTC issued to the Company in May 2022 and January 2023 seeking information regarding our marketing services and related services that we provide to GCU.

The complaint seeks a permanent injunction against the defendants to prevent further violations of the

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

FTC Act and the Telemarketing Sales Rule, monetary civil penalties, and other relief.

The Company intends to defend itself vigorously in this legal proceeding.

The outcome of this legal proceeding is uncertain at this point.

At present, the Company cannot reasonably estimate a range of loss for this action based on the information available to the Company.

Accordingly, the Company has not accrued any liability associated with this action.

False Claims Act Matter .

In May 2020, we were served with a qui tam lawsuit that had been filed against us in 2019 in the U.S.

In May 2020, the Company was served with a qui tam lawsuit that had been filed against us in 2019 in the U.S.

District Court for the District of Massachusetts by a former employee on behalf of the federal government.

8 unchanged sentences

In September 2021, we filed a motion for summary judgment which the Massachusetts court denied in September 2022.

Subsequently, the matter was transferred to the Arizona court, and we filed a motion for reconsideration of the summary judgment ruling in September 2023;

Subsequently, the matter was transferred to the Arizona court and trial was scheduled for late April 2024.

In the interim, we filed a motion for reconsideration of the summary judgment ruling in September 2023;

that motion remains pending.

Subject to the ruling on our motion for reconsideration, the matter is scheduled to go to trial in late April 2024.

We believe that the compensation practices at issue in the complaint, which were developed with the guidance of outside regulatory counsel specifically to comply with Title IV and its regulations and relevant case law interpreting the incentive compensation rule, do not violate applicable law.

Prior to trial commencing, we and the relator reached an agreement to stay trial while the parties attempt to finalize the terms upon which the litigation could be concluded.

Having been unsuccessful in reaching terms with the relevant parties, which would have avoided litigation, the Court has rescheduled the trial for October 2025.

For any future settlement to be affected, all parties to the litigation will need to agree on acceptable terms, both monetary and non-monetary.

In this regard, because this matter involves claims under the False Claims Act, any such terms would also need to be approved by the applicable U.S.

government agencies.

incentive compensation rule, do not violate applicable law.

The Company intends to defend itself vigorously in this legal proceeding.

2 unchanged sentences

Accordingly, the Company has not accrued any liability associated with this action.

Matters Related to GCU Graduate Program Disclosures and Related Matters.

The Company is a party to several matters alleging that, in the performance of its marketing services provided on behalf of GCU, it made false or misleading representations regarding the time to complete and the costs associated with and/or accreditation issues related to certain Grand Canyon University graduate programs, and (in the case of the FTC matter noted below) also made false or misleading representations regarding Grand Canyon University’s non-profit status and made telemarketing calls to phone numbers on do not call lists.

These matters include:

● Smith and Wang v.

Grand Canyon Education, Inc.

This putative class action was filed in June 2024 in the United States District Court for the District of Arizona and asserts claims under the federal RICO statute as well as various claims for violations of state law consumer protection statutes.

On September 20, 2024, the plaintiffs amended their complaint, and on November 4, 2024, the Company moved to dismiss the case.

The motion to dismiss is pending with the court.

There is currently no trial date scheduled in this matter.

● Federal Trade Commission v.

Grand Canyon Education, Inc., et al .

This suit was filed in late December 2023 in United States District Court for the District of Arizona and asserts claims under the FTC Act and Telemarketing Sales Rule.

In February 2024, GCE filed a partial motion to dismiss, which was denied in August 2024.

Discovery in this matter has commenced and is ongoing, with fact and expert discovery scheduled to conclude in May 2025 and October 2025 respectively.

There is currently no trial date scheduled in this matter.

Grand Canyon Education, Inc., et al .

This putative class action was filed in May 2020 in federal district court in California and later transferred to United States District Court for the District of Arizona and asserts claims for violations of California’s False Advertising Law, Unfair Competition Law, Consumer Legal Remedies Act;

Unjust Enrichment;

and purported violations of the federal RICO statute, including a conspiracy claim.

The defendants include the Company along with our chief executive officer, chief operating officer and chief financial officer.

On May 27, 2022, after significant motions practice, the Company filed an amended motion to dismiss and a motion to strike certain allegations in Plaintiff’s amended complaint.

On August 8, 2023, the court presiding over the dispute entered two orders:

(1) an order granting in part the Company’s motion to dismiss as to Ogdon’s RICO claim from the case and to dismiss the individual Defendants;

and (2) an order granting in part the Company’s motion to strike scandalous and impertinent allegations in Ogdon’s complaint about our business.

Shortly thereafter on August 22, 2023, Plaintiff moved the court to reconsider its dismissal of the RICO claim.

Though discovery had commenced, and the Company substantially completed its discovery obligations on the state-law claims, discovery was stayed on March 18, 2024, pending mediation and the disposition of Ogdon’s motion for reconsideration.

On March 29, 2024, the court issued an order reinstating Plaintiff’s RICO claim.

On September 26, 2024, the court lifted the stay on discovery, and discovery resumed, with class certification briefing to conclude in September 2025.

There is currently no trial date scheduled in this matter.

● Valerio, et al.

Grand Canyon Education, Inc., et al.

This suit was filed on December 24, 2024, in Maricopa County, Arizona Superior Court on behalf of nearly 300 plaintiffs.

The plaintiffs assert various claims, including claims for violations of state law consumer protection statutes.

The Company’s response to the complaint is due on April 10, 2025.

There is currently no trial date scheduled in this matter.

We believe that the Company’s representations made in marketing materials or by our employees regarding Grand Canyon University’s non-profit status and doctoral program requirements were at all times accurate and not false or misleading, and thus did not violate applicable law.

In addition, to the extent the representations we made or actions we took that are at issue in these proceedings were done or taken after July 1, 2018 at the direction of GCU and/or based on written instructions, or advertising or web materials, provided to us for use by GCU, GCU has agreed to indemnify us in part under the terms of the Master Services Agreement for our losses and expenses arising from these matters.

regard to the FTC’s claims under the Telemarketing Sales Rule, we only make telemarketing calls to individuals who have demonstrated interest in speaking to us about educational opportunities at Grand Canyon University, which are permitted by the rule.

The Company intends to defend itself vigorously in each of these legal proceedings.

The outcome of these legal proceedings is uncertain at this point.

At present, the Company cannot estimate a range of loss for these actions based on the information available to the Company.

Accordingly, the Company has not accrued any liability associated with these actions.

Tax Reserves, Non-Income Tax Related

From time to time the Company has exposure to various non-income tax related matters that arise in the ordinary course of business.

At both December 31, 2023 and 2022, the Company has no reserve for tax matters where its ultimate exposure is considered probable and the potential loss can be reasonably estimated.

At both December 31, 2024 and 2023, the Company has no non-income tax related matters where exposure is considered probable and the potential loss can be reasonably estimated.

Earnings Per Share

7 unchanged sentences

Diluted weighted average shares outstanding

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Diluted weighted average shares outstanding excludes the incremental effect of unvested restricted stock and shares that would be issued upon the assumed exercise of stock options in accordance with the treasury stock method.

7 unchanged sentences

Treasury Stock

In January 2021, July 2021, January 2022, October 2022 and October 2023 the Board of Directors increased the authorization under its existing stock repurchase program by $ 100,000 , $ 970,000 , $ 175,000 , $ 200,000 and $ 200,000 , respectively, reflecting an aggregate authorization for share repurchases since the initiation of our program of $ 2,045,000 .

On January 29, 2025 the Board of Directors approved a $ 200,000 increase under its existing stock repurchase program reflecting an aggregate authorization for share repurchases since the initiation of the program of $ 2,245,000 .

The expiration date on the repurchase authorization is March 1, 2026 .

3 unchanged sentences

During the year ended December 31, 2024, the Company repurchased 1,142 shares of common stock at an aggregate cost of $ 165,405 .

As of December 31, 2023, there remained $ 265,053 available under its current share repurchase authorization.

As of December 31, 2024, there remained $ 99,648 available under its current share

repurchase authorization (which authorization was increased to $ 299,648 in January 2025).

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.

6 unchanged sentences

As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted though income tax expense.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

The components of income tax expense (benefit) are as follows:

22 unchanged sentences

Net deferred tax liability

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

The net deferred tax liability on the accompanying consolidated balance sheet is comprised of the following:

16 unchanged sentences

As of December 31, 2024 and 2023, the unrecognized tax benefit recorded of $ 14,626 and $ 13,631 , respectively, if reversed, would impact the effective tax rate.

At December 31, 2023 and 2022, the Company had accrued $ 0 and $ 93 , respectively, in interest and $ 0 and $ 112 , respectively, in penalties.

At both years ended December 31, 2024 and 2023 the Company had accrued $ 0 , in interest and $ 0 , in penalties.

It is reasonably possible that the amount of the unrecognized tax benefit will change during the next 12 months, however management does not expect the potential change to have a material effect on the results of operations or financial position.

5 unchanged sentences

As of December 31, 2024, 962 shares were available for grants under the 2017 Plan.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Restricted Stock

3 unchanged sentences

During the years ended December 31, 2024, 2023 and 2022, the Company withheld 55 , 56 , and 52 shares of common stock in lieu of taxes at a cost of $ 7,446 , $ 6,331 , and $ 4,625 , on the restricted stock vesting dates, respectively.

During 2023, 2022 and 2021, following the annual stockholders meeting, the Company granted 4 , 4 and 4 shares of common stock to the non-employee members of the Company’s Board of Directors.

In April 2024, a new non-employee director was appointed to the Board of Directors 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.

During 2024, 2023 and 2022, following the annual stockholders meeting, the Company granted 3 , 4 and 4 shares of common stock to the non-employee members of the 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 following year’s annual stockholders’ meeting.

Included in the 2021 amount is an initial award of shares that was granted to a newly appointed non-employee director pursuant to the Company’s compensation program.

The 2021 newly appointed non-employee director also received an annual grant of restricted shares.

The initial award of shares that were granted in 2021 to the newly appointed non-employee director have voting rights and vest on the one year anniversary of the date of grant.

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

As a result, the incremental share-based compensation expense from the modification on the 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 2024, 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 is as follows:

10 unchanged sentences

These costs are expected to be recognized over a weighted average period of 2.03 years.

Stock Options

No options were granted in 2023, 2022 and 2021.

Prior to 2012, the Company granted time vested options to purchase shares of common stock with an exercise price equal to the fair market value on the date of grant to employees.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

These time vested options vested ratably over a period of five years and expire ten years from the date of grant.

A summary of the activity related to stock options granted under the Company’s Incentive Plan is as follows:

Summary of Stock Options Outstanding

Outstanding as of December 31, 2020

Forfeited, canceled or expired

Outstanding as of December 31, 2021

Share-based Compensation

2 unchanged sentences

The fair value of the Company’s restricted stock awards is based on the market price of its common stock on the date of grant.

Stock-based compensation expense related to restricted stock grants is expensed over the vesting period using the straight-line method for Company employees and the Company’s board of directors.

Stock-based compensation expense related to restricted stock grants is expensed over the vesting period using the straight-line method for Company employees and the Board of Directors.

The Company recognizes forfeitures as they occur.

11 unchanged sentences

All employees over the age of 21 are eligible to participate in the Plan.

The Plan allows eligible employees to contribute to the Plan subject to Internal Revenue Code restrictions and the Plan allows the Company to make discretionary matching contributions.

The Plan allows eligible employees to contribute to the Plan subject to restrictions under the Internal Revenue Code of 1986 (the “Code”), and the Plan allows the Company to make discretionary matching contributions.

The Company plans to make a matching contribution to the Plan of approximately $ 3,092 for the year ended December 31, 2024.

The Company made discretionary matching contributions to the Plan of $ 2,951 and $ 2,744 for the years ended December 31, 2023 and 2022, respectively.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Related Party Transactions

3 unchanged sentences

GCE Community Fund (“GCECF”) - GCECF was initially formed in 2014.

GCECF makes grants for charitable, educational, literary, religious or scientific purposes within the meaning of Section 501(c ) (3) of the Internal Revenue Code (the “Code”), including for such purposes as the making of distributions to organizations that qualify as exempt organizations under Section 501 (c ) (3) of the Code.

GCECF makes grants for charitable, educational, literary, religious or scientific purposes within the meaning of Section 501(c ) (3) of the Code, including for such purposes as the making of distributions to organizations that qualify as exempt organizations under Section 501 (c ) (3) of the Code.

The Company’s Chief Executive Officer serves as the president of GCECF and GCECF’s board of directors is comprised entirely of Company executives.

The Company is not the primary beneficiary of GCECF, and accordingly, the Company does not consolidate GCECF’s activities with its financial results.

The Company made voluntary charitable contributions of $ 1,650 and $ 1,150 for each of the years ended December 31, 2023 and 2022, respectively, of which no amounts were owed as of December 31, 2023 and 2022.

No donations were made during the year ended December 31, 2024.

The Company made voluntary charitable contributions of $ 1,650 for the year ended December 31, 2023, of which no amounts were owed as of December 31, 2023.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk