Grand Canyon Education, Inc.

Previous wording

Grand Canyon Education, Inc. (together with its subsidiaries, the “Company” or “GCE”) is a publicly traded education services company dedicated to serving colleges and universities. 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”), a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across ten colleges both online and on ground at its campus in Phoenix, Arizona, and at 11 off-campus classroom and laboratory sites.

Current wording

Grand Canyon Education, Inc. (together with its subsidiaries, the “Company” or “GCE”) is a publicly traded education services company dedicated to serving colleges and universities. 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”), a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across ten colleges both online and on ground at its campus in Phoenix, Arizona, and at 12 off-campus classroom and laboratory sites.

Previous wording

Our critical accounting policies are disclosed in the 2025 Form 10-K for the fiscal year ended December 31, 2025. During the three months ended March 31, 2026, there were no significant changes in our critical accounting policies.

Current wording

Our critical accounting policies are disclosed in the 2025 Form 10-K for the fiscal year ended December 31, 2025. During the six months ended June 30, 2026, there were no significant changes in our critical accounting policies.

Previous wording

Service revenue. Our service revenue for the three months ended March 31, 2026 was $308.8 million, an increase of $19.5 million, or 6.7%, as compared to service revenue of $289.3 million for the three months ended March 31, 2025. The increase year over year in service revenue was primarily due to an increase in university partner enrollments of 7.1% to 136,884 at March 31, 2026 as compared to 127,779 at March 31, 2025. GCU enrollments increased to 132,354 at March 31, 2026, an increase of 6.9% over enrollments at March 31, 2025. University partner enrollments at our off-campus classroom and laboratory sites were 5,961, an increase of 18.6% over enrollments at March 31, 2025, which includes 1,431 and 1,021 GCU students at March 31, 2026 and 2025, respectively. Excluding sites that have been closed or are in teach out, total enrollments at our off-campus classroom and laboratory sites increased 20.3% between years. Revenue per student decreased slightly between years primarily due to contract modifications with some of our university partners in which our revenue share percentage was reduced in exchange for us no longer reimbursing these partners for certain faculty costs which had the effect of reducing revenue per student and a slight decline year over year in revenue per student for online students due to the continued mix shift to students that have a slightly lower net tuition rate and a slight decline year over year in ground students which generate a higher revenue per student than online students. These decreases were partially offset by an additional day of revenue for the ground campus due to the start date shifting one day of revenue from the second quarter to the first quarter in 2026 which had a $1.0 million impact and theservice revenue per student for accelerated Bachelor of Science in Nursing (“ABSN”) students at off-campus classroom and laboratory sites generating a significantly higher revenue per student than we earn under our agreement with GCU, as these agreements generally provide us with a higher revenue share percentage, the partners have higher tuition rates than GCU and the majority of our partners’ students take more credits on average per semester.

Current wording

Service revenue. Our service revenue for the three months ended June 30, 2026 was $264.0 million, an increase of $16.5 million, or 6.7%, as compared to service revenue of $247.5 million for the three months ended June 30, 2025. The increase year over year in service revenue was primarily due to an increase in university partner enrollments of 7.6% to 126,231 at June 30, 2026 as compared to 117,283 at June 30, 2025. GCU enrollments increased to 121,921 at June 30, 2026, an increase of 7.5% over enrollments at June 30, 2025. University partner enrollments at our off-campus classroom and laboratory sites were 5,829, an increase of 16.8% over enrollments at June 30, 2025, which includes 1,519 and 1,142 GCU students at June 30, 2026 and 2025, respectively. Excluding sites that have been closed or are in teach out, total enrollments at our off-campus classroom and laboratory sites increased 18.5% between years. Revenue per student decreased slightly between years primarily due to contract modifications with one of our university partners in which our revenue share percentage was reduced in exchange for us no longer reimbursing this partner for certain faculty costs which had the effect of reducing revenue per student and a slight decline year over year in revenue per student for online students due to the continued mix shift to students that have a slightly lower net tuition rate and a slight decline year over year in Spring semester ground traditional students which generate a higher revenue per student than online students. In addition there was one less day of revenue for the ground campus due to the start date shifting one day of revenue from the second quarter to the first quarter in 2026 which had a $1.0 million impact. These decreases were partially offset by theservice revenue per student for accelerated Bachelor of Science in Nursing (“ABSN”) students at off-campus classroom and laboratory sites generating a significantly higher revenue per student than we earn under our agreement with GCU, as these agreements generally provide us with a higher revenue share percentage, the partners have higher tuition rates than GCU and the majority of our partners’ students take more credits on average per semester.

Previous wording

Technology and academic services. Our technology and academic services expenses for the three months ended March 31, 2026 were $45.0 million, an increase of $3.3 million, or 8.1%, as compared to technology and academic

Current wording

Technology and academic services. Our technology and academic services expenses for the three months ended June 30, 2026 were $45.6 million, an increase of $2.5 million, or 5.8%, as compared to technology and academic services expenses of $43.1 million for the three months ended June 30, 2025. This increase was primarily due to increases in employee compensation and related expenses, including share-based compensation and benefit costs, in

Previous wording

services expenses of $41.7 million for the three months ended March 31, 2025. This increase was primarily due to increases in other technology and academic costs, in employee compensation and related expenses, including share-based compensation and benefit costs and in occupancy and depreciation costs of $1.6 million, $1.2 million and $0.5 million, respectively. The increases in other technology and academic costs and occupancy and depreciation were primarily due to the costs associated with the increased enrollment growth at our off-campus classroom and laboratory sites to support our 20 university partners as well as an increase in technology costs and curriculum cost reimbursements to our university partners. The increase in employee compensation and related expenses is primarily due to increased headcount to support our 20 university partners and their increased enrollment growth, tenure-based salary adjustments and a significant year-over-year increase in benefit costs. Our technology and academic services expenses as apercentage of revenue increased by 0.2% to 14.6% for the three months ended March 31, 2026, from 14.4% for the three months ended March 31, 2025. This increase was primarily due to the increased technology costs and curriculum cost reimbursements, partially offset by our ability to leverage our technology and academic service expenses across an increasing revenue base. We anticipate that technology and academic services expenses will increase in the future as we open more off-site classroom and laboratory sites and the growing technology costs and curriculum cost reimbursements and these costs as a percentage of revenue could increase in the future.

Current wording

other technology and academic costs, and in occupancy and depreciation costs of $0.9 million, $0.8 million and $0.8 million, respectively. The increase in employee compensation and related expenses is primarily due to increased headcount to support our 20 university partners and their increased enrollment growth, tenure-based salary adjustments and a significant year-over-year increase in benefit costs. The increases in other technology and academic costs and occupancy and depreciation were primarily due to the costs associated with the increased enrollment growth at our off-campus classroom and laboratory sites to support our 20 university partners as well as an increase in technology costs and curriculum cost reimbursements to our university partners. Our technology and academic services expenses as apercentage of revenue decreased by 0.1% to 17.3% for the three months ended June 30, 2026, from 17.4% for the three months ended June 30, 2025. This decrease was primarily due to our ability to leverage our technology and academic service expenses across an increasing revenue base offset by the increased technology costs and curriculum cost reimbursements. We anticipate that technology and academic services expenses will increase in the future as we open more off-site classroom and laboratory sites and technology costs continue to grow, partially offset by a decrease in curriculum cost reimbursements due to the Amended Master Services Agreement, and these costs as a percentage of revenue could increase in the future.

Previous wording

Counseling services and support. Our counseling services and support expenses for the three months ended March 31, 2026 were $91.9 million, an increase of $5.1 million, or 5.8%, as compared to counseling services and support expenses of $86.8 million for the three months ended March 31, 2025. This increase was primarily attributable to increases in employee compensation and related expenses including share-based compensation and benefits and in occupancy and depreciation costs of $4.7 million and $0.6 million, respectively, partially offset by a decrease in other counseling services and support expenses of $0.2 million. The increases in employee compensation including share-based compensation and benefits were primarily due to increased headcount to support our university partners, and their planned increases in enrollment, tenure-based salary adjustments and a significant year over year increase in benefit costs. The increase in occupancy and depreciation is primarily related to higher depreciation expense associated with our continued enhancements to technology infrastructure and internal-use software development. The decrease in other counseling services and support expenses is primarily the result of lower travel costs to service our 20 university partners. Our counseling services and support expenses as apercentage of revenue decreased 0.2% to 29.8% for the three months ended March 31, 2026, from 30.0% for the three months ended March 31, 2025 primarily due to our ability to leverage our counseling services and support expenses across an increasing revenue base. We anticipate that counseling services and support expense will increase in the future as we continue to invest to meet our partners’ needs and these costs as a percentage of revenue could increase in the future.

Current wording

Counseling services and support. Our counseling services and support expenses for the three months ended June 30, 2026 were $88.1 million, an increase of $5.1 million, or 6.1%, as compared to counseling services and support expenses of $83.0 million for the three months ended June 30, 2025. This increase was primarily attributable to increases in employee compensation and related expenses including share-based compensation and benefits and in occupancy and depreciation costs of $4.7 million and $0.6 million, respectively, partially offset by a decrease in other counseling services and support expenses of $0.2 million. The increases in employee compensation including share-based compensation and benefits were primarily due to increased headcount to support our university partners, and their planned increases in enrollment, tenure-based salary adjustments and a significant year over year increase in benefit costs. The increase in occupancy and depreciation is primarily related to the increased headcount and continued enhancements to technology infrastructure and internal-use software development for employees that service students. The decrease in other counseling services and support expenses is primarily the result of lower travel costs to service our 20 university partners. Our counseling services and support expenses as apercentage of revenue decreased 0.1% to 33.4% for the three months ended June 30, 2026, from 33.5% for the three months ended June 30, 2025 primarily due to our ability to leverage our counseling services and support expenses across an increasing revenue base offset by the increased costs described above. We anticipate that counseling services and support expense will increase in the future as we continue to invest to meet our partners’ needs and these costs as a percentage of revenue could increase in the future.

Previous wording

Marketing and communication. Our marketing and communication expenses for the three months ended March 31, 2026 were $64.0 million, an increase of $3.7 million, or 6.1%, as compared to marketing and communication expenses of $60.3 million for the three months ended March 31, 2025. This increase was primarily attributable to the increased cost to market our university partners’ programs and to the marketing of new locations which resulted in increased advertising of $3.1 million, increased employee compensation, including share-based compensation and benefits of $0.4 million, increased occupancy and depreciation expense of $0.1 million and increased other communication expenses of $0.1 million. Our marketing and communication expenses as apercentage of revenue decreased by 0.2% to 20.7% for the three months ended March 31, 2026, from 20.9% for the three months ended March 31 2025, primarily due to our ability to leverage our marketing and communication expenses across an increasing revenue base. We anticipate that marketing and communication expenses will increase in the future as we continue to invest to meet our partners’ needs and these costs as a percentage of revenue could increase in the future.

Current wording

Marketing and communication. Our marketing and communication expenses for the three months ended June 30, 2026 were $60.0 million, an increase of $4.0 million, or 7.0%, as compared to marketing and communication expenses of $56.0 million for the three months ended June 30, 2025. This increase was primarily attributable to the increased spend to market our university partners’ programs and due to the marketing of new locations which resulted in increased advertising of $3.6 million, increased employee compensation, including share-based compensation and benefits of $0.2 million, increased occupancy and depreciation expense of $0.1 million and increased other communication expenses of $0.1 million. Our marketing and communication expenses as apercentage of revenue increased by 0.1% to 22.7% for the three months ended June 30, 2026, from 22.6% for the three months ended June 30, 2025. We anticipate that marketing and communication expenses will increase in the future as we continue to invest to meet our partners’ needs and these costs as a percentage of revenue could increase in the future.

Previous wording

General and administrative. Our general and administrative expenses for the three months ended March 31, 2026 were $10.3 million, a decrease of $0.1 million, as compared to general and administrative expenses of $10.4 million for the three months ended March 31, 2025. This decrease was primarily attributable to a decrease in professional fees and in occupancy and depreciation expenses of $0.3 million and $0.1 million, respectively. These decreases were partially offset by increases in employee compensation, including share-based compensation and benefit costs and in other administrative expenses of $0.2 million and $0.1 million, respectively. The decrease in professional fees was primarily due to lower legal costs between years. Our general and administrative expenses as apercentage of revenue decreased by 0.3% to 3.3% for the three months ended March 31, 2026, from 3.6% for the three months ended March 31, 2025, primarily due to our ability to leverage our general and administrative expenses across an increasing revenue base. We anticipate that general and administrative expenses will increase in the future and these costs as a percentage of revenue could increase in the future.

Current wording

General and administrative. Our general and administrative expenses for the three months ended June 30, 2026 were $10.1 million, a decrease of $1.3 million, or 11.4%, as compared to general and administrative expenses of $11.4 million for the three months ended June 30, 2025. This decrease was primarily attributable to a decrease in professional fees, in other administrative expenses and in occupancy and depreciation expenses of $0.9 million, $0.4 million and $0.2 million, respectively. These decreases were partially offset by increases in employee compensation, including share-based compensation and benefit costs of $0.2 million. The decrease in professional fees was primarily due to lower legal costs between years. Our general and administrative expenses as apercentage of revenue decreased by 0.8% to 3.8% for the three months ended June 30, 2026, from 4.6% for the three months ended June 30, 2025, primarily due to the decreased legal fees and our ability to leverage our general and administrative expenses across an increasing revenue base. General and administrative expenses could increase in the future and these costs as a percentage of revenue could increase in the future.

Previous wording

Investment interest and other. Investment interest and other for the three months ended March 31, 2026 was $3.0 million, a decrease of $0.4 million, as compared to $3.4 million for the three months ended March 31, 2025 due to slightly lower returns and lower investment balances.

Current wording

Investment interest and other. Investment interest and other for the three months ended June 30, 2026 was $2.7 million, a decrease of $0.5 million, as compared to $3.2 million for the three months ended June 30, 2025 due to slightly lower returns and lower investment balances.

Previous wording

Net income. Our net income for the three months ended March 31, 2026 was $75.3 million, an increase of $3.7 million, or 5.2% as compared to $71.6 million for the three months ended March 31, 2025, due to the factors discussed above.

Current wording

Net income. Our net income for the three months ended June 30, 2026 was $45.9 million, an increase of $4.4 million, or 10.4% as compared to $41.5 million for the three months ended June 30, 2025, due to the factors discussed above.

Previous wording

Income tax expense. Income tax expense for the three months ended March 31, 2026 was $23.1 million, an increase of $3.3 million, or 16.9%, as compared to income tax expense of $19.8 million for the three months ended March 31, 2025. The increase in income tax expense is due to the increase in income before taxes and a higher effective tax rate. Our effective tax rate was 23.5% during the three months ended March 31, 2026 compared to 21.6% during the three months ended March 31, 2025. The effective tax rate increased year over year due to changes in state income taxes and a decrease in excess tax benefits of $1.4 million as compared to $2.7 million in the three months ended March 31, 2026 and 2025, respectively. The inclusion of excess tax benefits and deficiencies as a component of our income tax expense increases the volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from share-based compensation awards are dependent on our stock price at the date the restricted stock awards vest. Our restricted stock awards vest in March each year so any benefit or expense will primarily impact the first quarter each year.

Current wording

Income tax expense. Income tax expense for the six months ended June 30, 2026 was $38.1 million, an increase of $4.8 million, or 14.7%, as compared to income tax expense of $33.3 million for the six months ended June 30, 2025. The increase in income tax expense is due to the increase in income before taxes and a higher effective tax rate. Our effective tax rate was 23.9% during the six months ended June 30, 2026 compared to 22.7% during the six months ended June 30, 2025. The effective tax rate increased year over year due to changes in state income taxes and a decrease in excess tax benefits to $1.4 million in the six months ended June 30, 2026 due to the decline in our stock price as compared to $2.7 million in the six months ended June 30, 2025. The inclusion of excess tax benefits and deficiencies as a component of our income tax expense increases the volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from share-based compensation awards are dependent on our stock price at the date the restricted stock awards vest. Our restricted stock awards vest in March each year so any benefit or expense will primarily impact the first quarter each year.

Previous wording

Our liquidity position, as measured by cash and cash equivalents and investments decreased by $48.4 million between December 31, 2025 and March 31, 2026, which was largely attributable to cash expended for share repurchases and capital expenditures exceeding our cash provided by operations during the three months ended March 31, 2026.

Current wording

Our liquidity position, as measured by cash and cash equivalents and investments decreased by $25.6 million between December 31, 2025 and June 30, 2026, which was largely attributable to cash expended for share repurchases and capital expenditures exceeding our cash provided by operations during the six months ended June 30, 2026.

Previous wording

The increase in cash generated from operating activities between the three months ended March 31, 2025 and the three months ended March 31, 2026 was primarily due to increased income and changes in working capital balances. Accounts payable increased by $4.0 million between December 31, 2025 and March 31, 2026 compared to the decrease of $2.0 million between December 31, 2024 and March 31, 2025, an increase year over year in cash provided by operating activities of $6.0 million due to timing of vendor payments. Income tax receivable/payable amounts increased by $19.6 million between December 31, 2025 and March 31, 2026 compared to the increase of $16.0 million between December 31, 2024 and March 31, 2025, a $3.6 million increase year over year in cash provided by operating activities due to the increased taxable income. Accounts receivable increased $29.0 million between December 31, 2025 and March 31, 2026 compared to the increase of $32.7 million between December 31, 2024 and March 31, 2025, a $3.7 million increase year over year in cash provided by operating activities due to the timing of collections. Other assets increased $1.8 million between December 31, 2025 and March 31, 2026 compared to the increase of $4.4 million between December 31, 2024 and March 31, 2025, a $2.6 million increase year over year in cash provided by operating activities due to timing of payments. We define working capital as the assets and liabilities, other than cash, generated through the Company’s primary operating activities. Changes in these balances are included in the changes in assets and liabilities presented in the consolidated statement of cash flows.

Current wording

income. Accounts receivable increased $50.0 million between December 31, 2025 and June 30, 2026 compared to the increase of $55.2 million between December 31, 2024 and June 30, 2025, a $5.2 million decrease year over year in cash provided by operating activities due to the timing of collections. Accounts payable decreased by $7.8 million between December 31, 2025 and June 30, 2026 compared to the decrease of $2.6 million between December 31, 2024 and June 30, 2025, a decrease year over year in cash provided by operating activities of $5.2 million due to timing of vendor payments. We define working capital as the assets and liabilities, other than cash, generated through the Company’s primary operating activities. Changes in these balances are included in the changes in assets and liabilities presented in the consolidated statement of cash flows.

Previous wording

Investing activities provided $24.1 million of cash in the three months ended March 31, 2026 compared to consuming $169.9 million of cash in the three months ended March 31, 2025.

Current wording

Investing activities provided $65.6 million of cash in the six months ended June 30, 2026 compared to consuming $198.7 million of cash in the six months ended June 30, 2025.

Previous wording

Cash used in investing activities includes investment activity and the change between years in net investing activities is primarily due to investment activity. In the three months ended March 31, 2026, the proceeds from the sale of investments, net of purchases of available-for-sale securities were $32.1 million. In the three months ended March 31, 2025, the purchase of available-for-sale securities, net of proceeds from the sale of investments were $159.9 million.

Current wording

Cash used in investing activities includes investment activity and the change between years in net investing activities is primarily due to investment activity. In the six months ended June 30, 2026, the proceeds from the sale of investments, net of purchases of available-for-sale securities were $84.4 million. In the six months ended June 30, 2025, the purchase of available-for-sale securities, net of proceeds from the sale of investments were $180.7 million.

Previous wording

In the first three months of 2026 and 2025 cash used in investing activities also included capital expenditures totaling $8.1 million and $8.9 million, respectively. Capital expenditures for both periods primarily consisted of leasehold improvements and equipment for new off-campus classroom and laboratory sites, as well as purchases of computer equipment, internal use software projects and furniture and equipment to support our increasing employee headcount. The Company incurs upfront expenses and capital expenditures prior to an off-campus classroom and laboratory site being opened. The Company intends to continue to spend approximately $30.0 million to $35.0 million per year for capital expenditures.

Current wording

In the first six months of 2026 and 2025 cash used in investing activities also included capital expenditures totaling $18.9 million and $17.6 million, respectively. Capital expenditures for both periods primarily consisted of leasehold improvements and equipment for new off-campus classroom and laboratory sites, as well as purchases of computer equipment, internal use software projects and furniture and equipment to support our increasing employee headcount. The Company incurs upfront expenses and capital expenditures prior to an off-campus classroom and laboratory site being opened. The Company intends to continue to spend approximately $30.0 million to $35.0 million per year for capital expenditures.

Previous wording

Financing activities consumed $127.9 million of cash in the three months ended March 31, 2026 compared to $77.9 million in the three months ended March 31, 2025.

Current wording

Financing activities consumed $203.2 million of cash in the six months ended June 30, 2026 compared to $125.2 million in the six months ended June 30, 2025.

Previous wording

During the three months ended March 31, 2026 and 2025, $120.4 million and $68.4 million, respectively was used to purchase treasury stock in accordance with GCE’s share repurchase program. In 2026 and 2025, $7.5 million and $9.5 million, respectively, of cash was utilized to purchase common shares withheld in lieu of income taxes resulting from the vesting of restricted share awards. The Company intends to continue using a significant portion of its cash flows from operations to repurchase its shares.

Current wording

During the six months ended June 30, 2026 and 2025, $195.7 million and $115.7 million, respectively was used to purchase treasury stock in accordance with GCE’s share repurchase program. In 2026 and 2025, $7.5 million and $9.5 million, respectively, of cash was utilized to purchase common shares withheld in lieu of income taxes resulting from the vesting of restricted share awards. The Company intends to continue using a significant portion of its cash flows from operations to repurchase its shares.

Previous wording

We repurchased 724,408 shares of common stock in the three months ended March 31, 2026. At March 31, 2026, there remains $224.0 million available under our share repurchase authorization.

Current wording

We repurchased 1,195,897 shares of common stock in the six months ended June 30, 2026. At June 30, 2026, there remains $148.7 million available under our share repurchase authorization.