Grand Canyon Education (LOPE) Q2 2025 earnings summary

Executive summary

• Service revenue for Q2 2025 rose 8.8% year-over-year to $247.5M, driven by a 10.3% increase in partner enrollments to 117,283, with GCU enrollments up 10.5%.

• Net income for Q2 2025 increased 19.1% to $41.5M, with diluted EPS at $1.48 and adjusted non-GAAP diluted EPS at $1.53, $0.16 above consensus.

• Online enrollment grew 10.1% year-over-year, hybrid enrollment up 15.4% excluding closed/teach-out sites, and ground campus new enrollments projected up 10% for fall 2025.

• The company expanded its university partner base, opening two new off-campus sites in the first half of 2025, totaling 45 sites.

• GCU remains the largest partner, accounting for 89.4% of total service revenue for the six months ended June 30, 2025.

Financial highlights

• Operating income for Q2 2025 was $51.8M (20.9% margin), up from $42.7M (18.8%) in Q2 2024.

• Six-month service revenue reached $536.8M, up 6.9% year-over-year; six-month net income was $113.2M, up 10.0%.

• Effective tax rate for Q2 2025 was 24.5%, down from 25.5% in Q2 2024; six-month rate was 22.7%.

• CapEx for Q2 2025 was $8.6M (3.5% of service revenue); full-year CapEx expected at $30–$40M.

• Cash, cash equivalents, and investments totaled $373.9M as of June 30, 2025, up from $324.6M at year-end.

Outlook and guidance

• Full-year 2025 guidance raised for revenue and earnings, with service revenue projected at $1,100.3M–$1,107.3M and diluted EPS at $8.75–$8.90.

• Online new enrollments expected to grow mid to high single digits in H2 2025; hybrid pillar growth in mid to high teens.

• Q3 2025 service revenue expected between $258.5M–$260.5M; Q4 2025 between $305.0M–$310.0M.

• Effective tax rate for 2025 lowered to 22.3% due to contributions in lieu of state income taxes.

• Management anticipates continued growth in technology, academic, and marketing expenses as new sites open and enrollment grows.