What changed in this filing

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Item 1. Financial Statements

2025-05-06 compared with 2024-11-06 · 109 added, 170 removed, 416 unchanged (40% of the section changed)

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

(In thousands, except per share data)

20 unchanged sentences

Consolidated Balance Sheets

September 30,

(In thousands, except par value)

24 unchanged sentences

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

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

0 shares issued and outstanding at March 31, 2025 and December 31, 2024

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

54,090 and 53,970 shares issued and 29,274 and 29,953 shares outstanding at September 30, 2024 and December 31, 2023, respectively

Treasury stock, at cost, 24,816 and 24,017 shares of common stock at September 30, 2024 and December 31, 2023, respectively

54,176 and 54,090 shares issued and 28,496 and 28,858 shares outstanding at March 31, 2025 and December 31, 2024, respectively

Treasury stock, at cost, 25,680 and 25,232 shares of common stock at March 31, 2025 and December 31, 2024, respectively

( 2,102,760 )

9 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

Other comprehensive income, net of tax:

Realized gains on available-for-sale securities, net of taxes of $ 39 for the three months ended September 30, 2024, and $ 17 for the nine months ended September 30, 2024

Unrealized gains (losses) on available-for-sale securities, net of taxes of $ 30 for the three months ended September 30, 2023, and $ 19 for the nine months ended September 30, 2023

Unrealized losses on available-for-sale securities, net of taxes of $ 1 and $ 18 for the three months ended March 31, 2025 and 2024, respectively

Comprehensive income

3 unchanged sentences

(In thousands)

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Treasury Stock

8 unchanged sentences

( 2,102,760 )

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at June 30, 2024

( 1,918,810 )

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at September 30, 2024

( 1,958,837 )

GRAND CANYON EDUCATION, INC.

Consolidated Statement of Stockholders’ Equity

(In thousands)

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Treasury Stock

8 unchanged sentences

( 1,879,697 )

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at June 30, 2023

( 1,798,619 )

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at September 30, 2023

( 1,832,686 )

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

1 unchanged sentence

Consolidated Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

(In thousands)

14 unchanged sentences

Net cash provided by operating activities

Cash flows provided by (used in) investing activities:

Cash flows used in investing activities:

Capital expenditures

Additions of amortizable content

Purchase of equity investment

Purchases of investments

Proceeds from sale or maturity of investments

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows used in financing activities:

1 unchanged sentence

Net cash used in financing activities

Net increase in cash and cash equivalents and restricted cash

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

Cash and cash equivalents and restricted cash, beginning of period

15 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, 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 eight off-campus classroom and laboratory sites.

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

1 unchanged sentence

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

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

As of March 31, 2025, GCE provides education services to 22 university partners across the United States.

Summary of Significant Accounting Policies

4 unchanged sentences

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with U.S.

generally accepted accounting principles and pursuant to the rules and regulations of the United States Securities and Exchange Commission and the instructions to Form 10-Q and Article 10, consistent in all material respects with those applied in its financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

They do not include all of the information and footnotes required by U.S.

generally accepted accounting principles for complete financial statements.

generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission and the instructions to Form 10-Q and Article 10, consistent in all material respects with those applied in its financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

They do not include all of the information and footnotes required by GAAP for complete financial statements.

Such interim financial information is unaudited but reflects all adjustments that in the opinion of management are necessary for the fair presentation of the interim periods presented.

1 unchanged sentence

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, 2024 from which the December 31, 2024 balance sheet information was derived.

As of September 30, 2024 the Company had no investments.

As of 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.

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

As of March 31, 2025, 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.

4 unchanged sentences

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

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 %

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

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

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.

Internally Developed Software

15 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 September 30, 2024 and December 31, 2023, $ 676 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 March 31, 2025 and December 31, 2024, $ 596 and $ 658 , 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

6 unchanged sentences

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.

Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets and are recognized as

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

The Company has lease agreements with lease and non-lease

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

lease expense on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, and the non-lease components are accounted for separately and not included in our ROU assets and lease liabilities.

components, and the non-lease components are accounted for separately and not included in our ROU assets and lease liabilities.

Leases primarily consist of off-campus classroom and laboratory site locations and office space.

9 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 September 30, 2024.

There were no indicators that the carrying amount of the finite-lived intangible assets were impaired as of March 31, 2025.

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.

21 unchanged sentences

The Company generates all of its revenue through services agreements with its university partners (“Services Agreements”), 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 Company’s Services Agreements have initial terms ranging from 7 - 15 years , subject to renewal options, although certain agreements may give the university partners the right to terminate early if certain conditions are met.

The Company’s Services Agreements have a single performance obligation, as the promises to provide the identified services are not distinct within the context of these agreements.

The Services Agreements have initial terms ranging from 7 - 15 years , subject to renewal options, although certain agreements may give the university partners the right to terminate early if certain conditions are met.

The Services Agreements have a single performance obligation, as the promises to provide the identified services are not distinct within the context of these agreements.

The single performance obligation is delivered as our partners receive and consume benefits, which occurs ratably over a series of distinct service periods (daily or semester).

11 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 September 30, 2024.

There have been no amounts written off and no reserves established as of March 31, 2025 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

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 $ 8,351 and $ 188 as of September 30, 2024 and December 31, 2023, respectively, are included in accounts receivable in our consolidated balance sheets.

Our unbilled revenue of $ 3,880 and $ 115 as of March 31, 2025 and December 31, 2024, 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 are reflected as a current liability on our consolidated balance sheets.

4 unchanged sentences

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

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

The Company determines the adequacy of

The Company maintains an allowance

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

the allowance by periodically evaluating each university partners balance, considering their financial condition and credit history, and considering current and forecasted economic conditions.

for credit losses resulting from our university partners not making payments.

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

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

29 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 September 30, 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 March 31, 2025 and December 31, 2024 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 September 30, 2024 and December 31, 2023, the Company had $ 262,584 and $ 145,474 , respectively, in excess of the FDIC insured limit.

At March 31, 2025 and December 31, 2024, the Company had $ 143,509 and $ 323,124 , 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, GCU, with 88.3 % and 87.0 % of total service revenue for the nine-month periods ended September 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.

Our dependence on our most significant university partner, GCU, with 90.4 % and 89.7 % of total service revenue for the three-month periods ended March 31, 2025 and 2024, 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

The preparation of consolidated financial statements in conformity with U.S.

generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes.

Actual results could differ from those estimates.

1 unchanged sentence

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 other than consolidated net income.

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 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.

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.

3 unchanged sentences

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 September 30, 2024 and December 31, 2023, the Company had investments of $ 0 and $ 98,031 , respectively, classified as available-for-sale securities.

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

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.” ASU No.

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 year 2027 and in the first quarter of fiscal year 2028 for interim reporting.

Retrospective application is permitted.

The Company does not

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

For the nine months ended September 30, 2024 and 2023, the net realized gains and unrealized losses were $ 57 and $ 60 , respectively, net of taxes.

expect the adoption of this guidance to have a material impact on the Company’s financial condition, results of operations or 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 March 31, 2025 the Company had investments of $ 160,144 classified as available-for-sale securities.

The Company had no investments at December 31, 2024 as it sold all its investments in the third quarter of 2024 and the proceeds were invested in cash and cash equivalents.

As of March 31, 2025

Corporate bonds

Commercial paper

Treasury bills

Total investments

For the three months ended March 31, 2025 and 2024, the net unrealized losses were $ 7 and $ 56 , respectively, net of taxes.

Available-for-sale debt 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:

Net Income Per Common Share

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Basic weighted average shares outstanding

1 unchanged sentence

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 in accordance with the treasury stock method.

For the three-month periods ended September 30, 2024 and 2023, approximately nil and 2 , respectively, and for the nine-month periods ended September 30, 2024 and 2023, approximately 26 and 70 , 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.

For the three-month periods ended March 31, 2025 and 2024, approximately 60 and 78 , 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.

1 unchanged sentence

Property and equipment consist of the following:

September 30,

Land improvements

6 unchanged sentences

Property and equipment, net

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Amortizable 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 of Orbis Education Services LLC (“Orbis Education”).

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:

September 30, 2024

March 31, 2025

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 four months to 10 years and five 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.

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

At lease inception, we determine the lease term by assuming no exercises of renewal

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

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 $ 12,350 and $ 9,695 for the nine-month periods ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, the Company had $ 22,204 of non-cancelable operating lease commitments for four off-campus classroom and laboratory sites that had not yet commenced.

The Company had operating lease costs of $ 4,339 and $ 3,877 for the three-month periods ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, 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 7.44 years, with a weighted-average discount rate of 4.24 % .

The cash paid for operating lease liabilities was $ 11,054 and $ 8,339 for the nine months ended September 30, 2024 and 2023, respectively.

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

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

The cash paid for operating lease liabilities was $ 4,053 and $ 3,541 for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, the Company had no financing leases.

Future payment obligations with respect to the Company’s operating leases, which were existing at March 31, 2025, by year and in the aggregate, are as follows:

Year Ending December 31,

2 unchanged sentences

Present value of lease liabilities

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Commitments and Contingencies

8 unchanged sentences

Pending Litigation Matters

Shareholder Litigation.

As previously disclosed, on May 12, 2020, a securities class action complaint was filed in the U.S.

District Court for the District of Delaware alleging claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, against the Company, Brian E.

Mueller, and Daniel E.

Bachus, for allegedly making false and materially misleading statements regarding the circumstances surrounding the Company’s 2018 sale of Grand Canyon University (the “University”) to a non-profit entity 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.

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

On March 25, 2024, the parties executed a Stipulation and Agreement of Settlement to resolve the action.

On August 22, 2024 the Court held a final fairness hearing and entered an order granting final approval of the settlement, and no appeals were taken.

The Company’s insurance carriers have funded the entire settlement amount.

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 asserted claims for breach of fiduciary duty and related claims.

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

On August 22, 2024, Plaintiff filed a motion requesting that the Court voluntarily dismiss the claims without prejudice.

On September 5, 2024, the Court granted Plaintiff’s motion and issued an order dismissing the claims without prejudice.

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.

7 unchanged sentences

In December 2020, the court granted our motion to dismiss as to one of three counts and granted the motion to transfer but only upon conclusion of pretrial proceedings.

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

In September 2021, we filed

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

a motion for summary judgment which the Massachusetts court denied in September 2022.

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

2 unchanged sentences

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.

For any future settlement to be affected, all parties to the litigation will need to

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

agree on acceptable terms, both monetary and non-monetary.

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.

1 unchanged sentence

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.

If a future settlement is not finalized on terms acceptable to all parties in interest, the Company intends to defend itself vigorously in this legal proceeding.

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

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

2 unchanged sentences

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.

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 GCU graduate programs, and (in the case of the FTC matter noted below) also made false or misleading representations regarding GCU’s non-profit status and made telemarketing calls to phone numbers on do not call lists.

These matters include:

9 unchanged sentences

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 a fact and expert discovery scheduled to conclude in May 2025 and October 2025 respectively.

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.

10 unchanged sentences

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.

On March 29, 2024, the

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

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, then we believe we have the right to be indemnified by GCU under the terms of the Master Services Agreement for all losses and expenses arising from these matters.

With 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.

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 May 12, 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 GCU’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.

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

5 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 September 30, 2024, 962 shares were available for grants under the 2017 Plan.

As of March 31, 2025, 875 shares were available for grants under the 2017 Plan.

Restricted Stock

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

During the three months ended March 31, 2025, the Company granted 86 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 nine months ended September 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 Company’s 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.

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, 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.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

During the three months ended March 31, 2025, the Company withheld 53 shares of common stock in lieu of taxes at a cost of $ 9,463 on the restricted stock vesting dates.

A summary of the activity related to restricted stock granted under the 2017 Plan since December 31, 2024 is as follows:

3 unchanged sentences

Forfeited, canceled or expired

Outstanding as of September 30, 2024

Outstanding as of March 31, 2025

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 nine months ended September 30, 2024 and 2023 related to restricted stock granted:

The table below outlines share-based compensation expense for the three months ended March 31, 2025 and 2024 related to restricted stock granted:

Technology and academic services

9 unchanged sentences

Repurchases occur at the Company’s discretion.

Repurchases may be made in the open market or in privately negotiated transactions, pursuant to the applicable Securities and Exchange Commission rules.

Repurchases may be made in the open market or in privately negotiated transactions, pursuant to the applicable SEC rules.

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

During the nine months ended September 30, 2024 the Company repurchased 726 shares of common stock, at an aggregate cost of $ 100,559 .

As of September 30, 2024, there remained $ 164,494 available under its current share repurchase authorization.

During the three months ended March 31, 2025 the Company repurchased 395 shares of common stock, at an aggregate cost of $ 68,394 .

As of March 31, 2025, there remained $ 231,255 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.

Excise taxes of $ 533 are not included in the repurchase plan totals but are included in the total cost of net share repurchases in the consolidated statement of stockholders’ equity.

Subsequent Event

On October 1, 2024, GCU entered into certain loan agreements (the “Loan Agreements”) with MidFirst Bank, a federally chartered savings association (“MidFirst”), and Zions Bancorporation, N.A., dba National Bank of Arizona, (“NBAZ” and, together with MidFirst, the “Banks”), pursuant to which each Bank made loans to GCU in the original amount of $ 250.0 million ( $ 500.0 million in the aggregate) (each, a “Loan” and, collectively, the “Loans”).

The proceeds of the Loans were used by GCU to refinance outstanding bonds originally issued in 2021.

The stated maturity date under the MidFirst Loan Agreement is October 1, 2026 and under the NBAZ Loan Agreement is April 1, 2025.

The Loan Agreements provide for customary events of default and remedies.

As a condition to the making of the Loans, each Bank required GCU to provide cash collateral in an amount equal to the principal balance of the Loan it provided.

At the time of the making of the Loans, GCU provided $ 300.0 million of its cash as collateral and the Company offered to use some of its cash to provide the remaining collateral

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

necessary for GCU to secure the Loans.

Accordingly, on October 1, 2024, the Company entered into (i) a Pledge and Security Agreement, by and between the Company and MidFirst, and (ii) a Security Agreement, by and between the Company and Zions (collectively, the “Pledge Agreements”), pursuant to which, among other things, the Company agreed to pledge to each of MidFirst and Zions $ 100.0 million of the Company’s available cash in order to partially secure the obligations of GCU under each Loan Agreement.

The Pledge Agreements generally require that, so long as the time for payment of the indebtedness incurred by GCU under the Loan Agreements has not been stayed, enjoined or prevented for any reason, each Bank will exhaust its rights and remedies against GCU prior to exercising its rights against the Company’s collateral under the Pledge Agreement s.

The Pledge Agreements will terminate upon the earlier of (a) in the case of the MidFirst Loan, repayment by GCU of at least $ 100.0 million of the Loan or GCU’s pledge of $ 100.0 million in cash collateral in substitution of the Company’s cash collateral, and (b) in the case of NBAZ, payment in full of all indebtedness due and owing under Loan Agreement or GCU’s pledge of $ 100.0 million in cash collateral in substitution of the Company’s cash collateral .

All income earned on the Company’s cash collateral under the Pledge Agreements will be for the benefit of the Company.

GCU has agreed to indemnify the Company for any claims, losses, liabilities and expenses arising out of Pledge Agreements (including the value of any collateral against which MidFirst or NBAZ has exercised remedies, out of pocket expenses, costs and disbursements and reasonable and documented attorney’s fees), except to the extent the claims, liabilities or expenses are finally judicially determined by a court of competent jurisdiction to have resulted from the Company’s or any of its affiliates’ gross negligence or willful misconduct.

In the event that the terms of any of the Loan Agreements or Pledge Agreements prevent GCU from making any indemnity payment required by the preceding sentence, GCU shall make such payment immediately upon the removal of such restriction.

The foregoing description of the Pledge Agreements does not purport to be complete and is qualified in its entirety by the full text of the Pledge Agreements, copies of which will be timely filed as an exhibit to the Company’s upcoming Annual Report on Form 10-K in accordance with applicable rules and regulations of the Securities and Exchange Commission.

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