Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Entity File Number | 001-34211 | |
Entity Registrant Name | GRAND CANYON EDUCATION, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-3356009 | |
Entity Address, Address Line One | 2600 W. Camelback Road | |
Entity Address, City or Town | Phoenix | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85017 | |
City Area Code | 602 | |
Local Phone Number | 247-4400 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | LOPE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,010,536 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001434588 | |
Amendment Flag | false |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Consolidated Income Statements | ||||
Service revenue | $ 221,913 | $ 208,720 | $ 682,615 | $ 652,606 |
Costs and expenses: | ||||
Technology and academic services | 39,174 | 37,641 | 115,643 | 112,136 |
Counseling services and support | 73,824 | 67,235 | 219,565 | 200,773 |
Marketing and communication | 53,097 | 50,651 | 156,797 | 151,237 |
General and administrative | 12,175 | 15,576 | 32,838 | 35,323 |
Amortization of intangible assets | 2,105 | 2,105 | 6,315 | 6,315 |
Total costs and expenses | 180,375 | 173,208 | 531,158 | 505,784 |
Operating income | 41,538 | 35,512 | 151,457 | 146,822 |
Interest expense | (1) | (27) | (5) | |
Investment interest and other | 2,739 | 745 | 7,482 | 1,294 |
Income before income taxes | 44,276 | 36,257 | 158,912 | 148,111 |
Income tax expense | 8,537 | 6,249 | 34,636 | 34,463 |
Net income | $ 35,739 | $ 30,008 | $ 124,276 | $ 113,648 |
Earnings per share: | ||||
Basic income per share | $ 1.20 | $ 0.96 | $ 4.12 | $ 3.48 |
Diluted income per share | $ 1.19 | $ 0.96 | $ 4.10 | $ 3.47 |
Basic weighted average shares outstanding | 29,776 | 31,302 | 30,138 | 32,623 |
Diluted weighted average shares outstanding | 29,912 | 31,387 | 30,277 | 32,709 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 56,871 | $ 120,409 |
Investments | 97,553 | 61,295 |
Accounts receivable, net | 104,475 | 77,413 |
Income tax receivable | 3,770 | 2,788 |
Other current assets | 12,069 | 11,368 |
Total current assets | 274,738 | 273,273 |
Property and equipment, net | 164,638 | 147,504 |
Right-of-use assets | 90,393 | 72,719 |
Amortizable intangible assets, net | 170,485 | 176,800 |
Goodwill | 160,766 | 160,766 |
Other assets | 2,136 | 1,687 |
Total assets | 863,156 | 832,749 |
Current liabilities | ||
Accounts payable | 23,696 | 20,006 |
Accrued compensation and benefits | 25,446 | 36,412 |
Accrued liabilities | 33,527 | 22,473 |
Income taxes payable | 91 | 12,167 |
Deferred revenue | 6,237 | |
Current portion of lease liability | 10,518 | 8,648 |
Total current liabilities | 99,515 | 99,706 |
Deferred income taxes, noncurrent | 26,694 | 26,195 |
Other long-term liability | 416 | 436 |
Lease liability, less current portion | 86,001 | 68,793 |
Total liabilities | 212,626 | 195,130 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $0.01 par value, 100,000 shares authorized; 53,970 and 53,830 shares issued and 30,092 and 31,058 shares outstanding at September 30, 2023 and December 31, 2022, respectively | 540 | 538 |
Treasury stock, at cost, 23,878 and 22,772 shares of common stock at September 30, 2023 and December 31, 2022, respectively | (1,832,686) | (1,711,423) |
Additional paid-in capital | 319,266 | 309,310 |
Accumulated other comprehensive loss | (593) | (533) |
Retained earnings | 2,164,003 | 2,039,727 |
Total stockholders' equity | 650,530 | 637,619 |
Total liabilities and stockholders' equity | $ 863,156 | $ 832,749 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Consolidated Balance Sheets | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 53,970 | 53,830 |
Common stock, shares outstanding | 30,092 | 31,058 |
Treasury stock, common shares | 23,878 | 22,772 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Consolidated Statements of Other Comprehensive Income | ||||
Net Income (Loss) | $ 35,739 | $ 30,008 | $ 124,276 | $ 113,648 |
Other comprehensive income, net of tax: | ||||
Unrealized gains (losses) on available-for-sale securities, net of taxes of $30 and $8 for the three months ended September 30, 2023 and 2022, respectively, and $19 and $131 for the nine months ended September 30, 2023 and 2022, respectively | 97 | (19) | (60) | (417) |
Comprehensive income | $ 35,836 | $ 29,989 | $ 124,216 | $ 113,231 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Consolidated Statements of Other Comprehensive Income | ||||
Unrealized gains (losses) on available for sale securities, taxes | $ 30 | $ 8 | $ 19 | $ 131 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury stock, common | Total |
Beginning Balance at Dec. 31, 2021 | $ 536 | $ 296,670 | $ 1,855,052 | $ (1,107,211) | $ 1,045,047 | |
Beginning Balance ( In Shares) at Dec. 31, 2021 | 53,637 | |||||
Beginning Balance, treasury shares at Dec. 31, 2021 | 15,915 | |||||
Comprehensive income | $ (323) | 58,078 | 57,755 | |||
Common stock purchased for treasury | $ (394,930) | (394,930) | ||||
Common stock acquired, shares | 4,575 | |||||
Restricted shares forfeited, shares | 6 | |||||
Share-based compensation | $ 2 | 3,188 | $ (4,625) | (1,435) | ||
Share-based compensation, shares | 189 | 52 | ||||
Ending Balance at Mar. 31, 2022 | $ 538 | 299,858 | (323) | 1,913,130 | $ (1,506,766) | 706,437 |
Ending Balance ( In shares ) at Mar. 31, 2022 | 53,826 | |||||
Ending Balance, treasury shares at Mar. 31, 2022 | 20,548 | |||||
Beginning Balance at Dec. 31, 2021 | $ 536 | 296,670 | 1,855,052 | $ (1,107,211) | 1,045,047 | |
Beginning Balance ( In Shares) at Dec. 31, 2021 | 53,637 | |||||
Beginning Balance, treasury shares at Dec. 31, 2021 | 15,915 | |||||
Comprehensive income | 113,231 | |||||
Ending Balance at Sep. 30, 2022 | $ 538 | 306,152 | (417) | 1,968,700 | $ (1,683,417) | 591,556 |
Ending Balance ( In shares ) at Sep. 30, 2022 | 53,830 | |||||
Ending Balance, treasury shares at Sep. 30, 2022 | 22,453 | |||||
Beginning Balance at Mar. 31, 2022 | $ 538 | 299,858 | (323) | 1,913,130 | $ (1,506,766) | 706,437 |
Beginning Balance ( In Shares) at Mar. 31, 2022 | 53,826 | |||||
Beginning Balance, treasury shares at Mar. 31, 2022 | 20,548 | |||||
Comprehensive income | (75) | 25,562 | 25,487 | |||
Common stock purchased for treasury | $ (128,457) | (128,457) | ||||
Common stock acquired, shares | 1,319 | |||||
Share-based compensation | 3,171 | 3,171 | ||||
Share-based compensation, shares | 4 | |||||
Ending Balance at Jun. 30, 2022 | $ 538 | 303,029 | (398) | 1,938,692 | $ (1,635,223) | 606,638 |
Ending Balance ( In shares ) at Jun. 30, 2022 | 53,830 | |||||
Ending Balance, treasury shares at Jun. 30, 2022 | 21,867 | |||||
Comprehensive income | (19) | 30,008 | 29,989 | |||
Common stock purchased for treasury | $ (48,194) | (48,194) | ||||
Common stock acquired, shares | 582 | |||||
Restricted shares forfeited, shares | 4 | |||||
Share-based compensation | 3,123 | 3,123 | ||||
Ending Balance at Sep. 30, 2022 | $ 538 | 306,152 | (417) | 1,968,700 | $ (1,683,417) | 591,556 |
Ending Balance ( In shares ) at Sep. 30, 2022 | 53,830 | |||||
Ending Balance, treasury shares at Sep. 30, 2022 | 22,453 | |||||
Beginning Balance at Dec. 31, 2022 | $ 538 | 309,310 | (533) | 2,039,727 | $ (1,711,423) | $ 637,619 |
Beginning Balance ( In Shares) at Dec. 31, 2022 | 53,830 | |||||
Beginning Balance, treasury shares at Dec. 31, 2022 | 22,772 | 22,772 | ||||
Comprehensive income | 119 | 59,564 | $ 59,683 | |||
Common stock purchased for treasury | $ (35,090) | (35,090) | ||||
Common stock acquired, shares | 310 | |||||
Restricted shares forfeited, shares | 5 | |||||
Share-based compensation | $ 2 | 3,367 | $ (6,331) | (2,962) | ||
Share-based compensation, shares | 136 | 56 | ||||
Ending Balance at Mar. 31, 2023 | $ 540 | 312,677 | (414) | 2,099,291 | $ (1,752,844) | 659,250 |
Ending Balance ( In shares ) at Mar. 31, 2023 | 53,966 | |||||
Ending Balance, treasury shares at Mar. 31, 2023 | 23,143 | |||||
Beginning Balance at Dec. 31, 2022 | $ 538 | 309,310 | (533) | 2,039,727 | $ (1,711,423) | $ 637,619 |
Beginning Balance ( In Shares) at Dec. 31, 2022 | 53,830 | |||||
Beginning Balance, treasury shares at Dec. 31, 2022 | 22,772 | 22,772 | ||||
Comprehensive income | $ 124,216 | |||||
Ending Balance at Sep. 30, 2023 | $ 540 | 319,266 | (593) | 2,164,003 | $ (1,832,686) | $ 650,530 |
Ending Balance ( In shares ) at Sep. 30, 2023 | 53,970 | |||||
Ending Balance, treasury shares at Sep. 30, 2023 | 23,878 | 23,878 | ||||
Beginning Balance at Mar. 31, 2023 | $ 540 | 312,677 | (414) | 2,099,291 | $ (1,752,844) | $ 659,250 |
Beginning Balance ( In Shares) at Mar. 31, 2023 | 53,966 | |||||
Beginning Balance, treasury shares at Mar. 31, 2023 | 23,143 | |||||
Comprehensive income | (276) | 28,973 | 28,697 | |||
Common stock purchased for treasury | $ (45,775) | (45,775) | ||||
Common stock acquired, shares | 419 | |||||
Restricted shares forfeited, shares | 10 | |||||
Share-based compensation | 3,253 | 3,253 | ||||
Share-based compensation, shares | 4 | |||||
Ending Balance at Jun. 30, 2023 | $ 540 | 315,930 | (690) | 2,128,264 | $ (1,798,619) | 645,425 |
Ending Balance ( In shares ) at Jun. 30, 2023 | 53,970 | |||||
Ending Balance, treasury shares at Jun. 30, 2023 | 23,572 | |||||
Comprehensive income | 97 | 35,739 | 35,836 | |||
Common stock purchased for treasury | $ (34,067) | (34,067) | ||||
Common stock acquired, shares | 306 | |||||
Share-based compensation | 3,336 | 3,336 | ||||
Ending Balance at Sep. 30, 2023 | $ 540 | $ 319,266 | $ (593) | $ 2,164,003 | $ (1,832,686) | $ 650,530 |
Ending Balance ( In shares ) at Sep. 30, 2023 | 53,970 | |||||
Ending Balance, treasury shares at Sep. 30, 2023 | 23,878 | 23,878 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows provided by operating activities: | ||
Net income | $ 124,276 | $ 113,648 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Share-based compensation | 9,958 | 9,484 |
Depreciation and amortization | 16,994 | 17,023 |
Amortization of intangible assets | 6,315 | 6,315 |
Deferred income taxes | 517 | 368 |
Other, including fixed asset impairments | (134) | 1,013 |
Changes in assets and liabilities: | ||
Accounts receivable from university partners | (27,062) | (31,107) |
Other assets | (1,154) | (1,288) |
Right-of-use assets and lease liabilities | 1,404 | 700 |
Accounts payable | 3,894 | (5,768) |
Accrued liabilities | (910) | 2,162 |
Income taxes receivable/payable | (13,058) | (8,172) |
Deferred revenue | 6,237 | 6,092 |
Net cash provided by operating activities | 127,277 | 110,470 |
Cash flows used in investing activities: | ||
Capital expenditures | (34,186) | (26,301) |
Additions of amortizable content | (809) | (294) |
Purchases of investments | (73,462) | (132,096) |
Proceeds from sale or maturity of investments | 37,927 | 63,373 |
Net cash used in investing activities | (70,530) | (95,318) |
Cash flows used in financing activities: | ||
Repurchase of common shares and shares withheld in lieu of income taxes | (120,285) | (576,206) |
Net cash used in financing activities | (120,285) | (576,206) |
Net decrease in cash and cash equivalents and restricted cash | (63,538) | (561,054) |
Cash and cash equivalents and restricted cash, beginning of period | 120,409 | 600,941 |
Cash and cash equivalents and restricted cash, end of period | 56,871 | 39,887 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 27 | 5 |
Cash paid for income taxes | 47,654 | 41,118 |
Supplemental disclosure of non-cash investing and financing activities | ||
Purchases of property and equipment included in accounts payable | 927 | 1,827 |
ROU Asset and Liability recognition | 17,674 | $ 17,434 |
Excise tax on treasury stock repurchases | $ 978 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2023 | |
Nature of Business | |
Nature of Business | 1. Nature of Business 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”), an Arizona non-profit corporation, a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across off-campus 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, which we acquired, by merger on January 22, 2019 (the “Acquisition”). Since the Acquisition, GCE, together with Orbis Education, has continued to add additional university partners. 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. In addition, we have provided certain services to a university partner to assist them in expanding their online graduate programs. As of September 30, 2023, GCE provides education services to university partners across the United States. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions have been eliminated in consolidation. Unaudited Interim Financial Information 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, 2022. They do not include all of the information and footnotes required by U.S. generally accepted accounting principles 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. Interim results are not necessarily indicative of results for a full year. 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, 2022 from which the December 31, 2022 balance sheet information was derived. Investments As of September 30, 2023 and December 31, 2022, the Company considered its investments in corporate bonds, agency bonds 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, with unrealized gains and losses, net of tax, reported as a separate component of other comprehensive income. Unrealized losses considered to be other-than-temporary are recognized currently in earnings. Amortization of premiums, accretion of discounts, interest and dividend income and realized gains and losses are included in interest and other income. 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 (the “Secured Note”) which was repaid by GCU in the fourth quarter of 2021. In connection therewith, Except for identified liabilities assumed by GCU, GCE retained responsibility for all liabilities of the business arising from pre-closing operations. Internally Developed Software The Company capitalizes certain costs related to internal-use software, primarily consisting of direct labor associated with creating the software. Software development projects generally include three stages: the preliminary project stage (all costs are expensed as incurred), the application development stage (certain costs are capitalized and certain costs are expensed as incurred) and the post-implementation or operation stage (all costs are expensed as incurred). Costs capitalized in the application development stage include costs of design, coding, integration, and testing of the software developed. Capitalization of costs requires judgment in determining when a project has reached the application development stage and the period over which we expect to benefit from the use of that software. Once the software is placed in service, these costs are amortized straight-line over the estimated useful life of the software, which is generally three years . These assets are a component of our property and equipment, net in our consolidated balance sheets. Capitalized Content Development The Company capitalizes certain costs to fulfill a contract related to the development and digital creation of content on a course-by-course basis for each university partner, many times in conjunction with faculty and subject matter experts. The Company is responsible for the conversion of instructional materials to an on-line format, including outlines, quizzes, lectures, and articles in accordance with the educational guidelines provided to us by our university partners, prior to the respective course commencing. We also capitalize the creation of learning objects which are digital assets such as online demonstrations, simulations, and case studies used to obtain learning objectives. 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 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. Capitalized content development assets are included in other assets in our consolidated balance sheets. 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 which corresponds with course’s review and major revision cycle. As of September 30, 2023 and December 31, 2022, Long-Lived Assets The Company evaluates the recoverability of its long-lived assets for impairment, other than goodwill, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. 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 assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Leases The Company determines if an arrangement is a lease at inception and evaluates the lease agreement to determine whether the lease is a finance or operating lease. 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. 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 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. Leases primarily consist of off-campus classroom and laboratory site locations and office space. Business Combinations The purchase price of an acquisition is allocated to the assets acquired, including tangible and intangible assets, and liabilities assumed, based on their respective fair values at the acquisition date. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred. The determination of the fair value and useful lives of the intangible assets acquired involves certain judgments and estimates. These judgements can include, but are not limited to, the cash flows that an asset is expected to generate in the future and the appropriate weighted average cost of capital. The net assets and result of operations of an acquired entity are included in the Company’s consolidated financial statements from the acquisition date. Goodwill and Amortizable Intangible Assets Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the tangible and intangible assets acquired and liabilities assumed. Goodwill is assessed at least annually for impairment during the fourth quarter, or more frequently if circumstances indicate potential impairment. Goodwill is allocated to our reporting unit at the education services segment, which is the same as the entity as a whole (entity level reporting unit). The Company has concluded there is reporting unit for goodwill impairment consideration. The Financial Accounting Standards Board has issued guidance that permits an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. The Company reviews goodwill at least annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Finite-lived intangible assets that are acquired in a business combination are recorded at fair value on their acquisition dates and are amortized using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or on a straight-line basis over the estimated useful life of the intangible asset if the pattern of economic benefit cannot be reliability determined. Finite-lived intangible assets consist of university partner relationships and trade names. 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, 2023. 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, 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 The Company measures and recognizes compensation expense for share-based payment awards made to employees and directors. 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. The Company recognizes forfeitures as they occur. Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and benefits and accrued liabilities expenses approximate their fair value based on the liquidity or the short-term maturities of these instruments. The fair value of investments was 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. The unit of account used for valuation is the individual underlying security. -Level 1 – inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. -Level 2 – inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in non-active markets; and model-derived valuations whose inputs are observable or whose significant valuation drivers are observable. -Level 3 – unobservable inputs that are not corroborated by market data. Investments are comprised of corporate bonds, commercial paper and agency bonds. Revenue Recognition 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 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). Service revenue is recognized over time using the output method of measuring progress towards complete satisfaction of the single performance obligation. The output method provides a faithful depiction of the performance toward complete satisfaction of the performance obligation and can be tied to the time elapsed which is consumed evenly over the service period and is a direct measurement of the value provided to our partners. The service fees received from our partners over the term of the agreement are variable in nature in that they are dependent upon the number of students attending the university partner’s program and revenues generated from those students during the service period. Due to the variable nature of the consideration over the life of the service arrangement, the Company considered forming an expectation of the variable consideration to be received over the service life of this one performance obligation. However, since the performance obligation represents a series of distinct services, the Company recognizes the variable consideration that becomes known and billable because these fees relate to the distinct service period in which the fees are earned. The Company meets the criteria in the standard and exercises the practical expedient to not disclose the aggregate amount of the transaction price allocated to the single performance obligation that is unsatisfied as of the end of the reporting period. 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. There are no refunds or return rights under the Services Agreements. The Company’s receivables represent unconditional rights to consideration from our Services Agreements with our university partners. Accounts receivable, net is stated at net realizable value and contains billed and unbilled revenue. The Company utilizes the allowance method to provide for doubtful accounts based on its evaluation of the expected credit losses. There have been reserves established as of September 30, 2023. The Company will continue to review and revise its allowance methodology based on its collection experience with its partners. For our partners with unbilled revenue, revenue recognition occurs in advance of billings. Billings for some university partners do not occur until after the service period has commenced and final enrollment information is available. Our unbilled revenue of $7,778 and $5,560 as of September 30, 2023 and December 31, 2022, 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. We generally receive payments for our services billed within 30 days of invoice. These payments are recorded as deferred revenue until the services are delivered and revenue is recognized. Allowance for Credit Losses 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. 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 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. The Company monitors the impact of other factors on expected credit losses. Technology and Academic Services Technology and academic services consist primarily of costs related to ongoing maintenance of educational infrastructure, including online course delivery and management, student records, assessment, customer relations management and other internal administrative systems. This also includes costs to provide support for content development, faculty training, development and other faculty support, technology support, rent and occupancy costs for university partners’ off-campus classroom and laboratory sites, and assistance with state compliance. This expense category includes salaries, benefits and share-based compensation, information technology costs, amortization of content development costs and other costs associated with these support services. This category also includes an allocation of depreciation, amortization, and occupancy costs attributable to the provision of certain services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations. Counseling Services and Support Counseling services and support consist primarily of costs including team-based counseling and other support to prospective and current students as well as financial aid processing. This expense category includes salaries, benefits and share-based compensation, and other costs such as dues, fees and subscriptions and travel costs. This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of certain services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations. Marketing and Communication Marketing and communication includes lead acquisition, digital communication strategies, brand identity advertising, media planning and strategy, video, data science and analysis, marketing to potential students and other promotional and communication services. This expense category includes salaries, benefits and share-based compensation for marketing and communication personnel, brand advertising, marketing leads and other promotional and communication expenses. This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of certain services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations. Advertising costs are expensed as incurred. General and Administrative General and administrative expenses include salaries, benefits and share-based compensation of employees engaged in corporate management, finance, human resources, compliance, and other corporate functions. 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. Commitments and Contingencies The Company accrues for contingent obligations when it is probable that a liability has been incurred and the amount is reasonably estimable. When the Company becomes aware of a claim or potential claim, the likelihood of any loss exposure is assessed. If it is probable that a loss will result and the amount of the loss is estimable, the Company records a liability for the estimated loss. If the loss is not probable or the amount of the potential loss is not estimable, the Company will disclose the claim if the likelihood of a potential loss is reasonably possible and the amount of the potential loss could be material. Estimates that are particularly sensitive to future changes include tax, legal, and other regulatory matters, which are subject to change as events evolve, and as additional information becomes available during the administrative and litigation process. The Company expenses legal fees as incurred. Concentration of Credit Risk 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, 2023 and December 31, 2022 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. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash balances, which are primarily invested in money market funds or on deposit at high credit quality financial institutions in the U.S. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2023 and December 31, 2022, the Company had $56,119 and $119,639, 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, with 87.0% and 84.9% of total service revenue for the nine-month periods ended September 30, 2023 and 2022, 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. Actual results could differ from those estimates. Segment Information 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. Recent Accounting Pronouncements 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. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2023 | |
Investments | |
Investments | 3. Investments As of September 30, 2023 and December 31, 2022, the Company had investments of $97,553 and $61,295 , respectively, classified as available-for-sale securities. As of September 30, 2023, the Company had available-for-sale investments comprised of the following: As of September 30, 2023 Gross Gross Adjusted Unrealized Unrealized Estimated Cost Gains (Losses) Fair Value Corporate bonds $ 74,323 $ — $ (742) $ 73,581 Commercial Paper 4,988 — (1) 4,987 Agency bonds 19,020 — (35) 18,985 Total investments $ 98,331 $ — $ (778) $ 97,553 For the nine months ended September 30, 2023 and 2022, the net unrealized losses were $60 and $417 , respectively, net of taxes. Available-for-sale debt securities are carried at fair value on the consolidated balance sheets. The Company estimates the lifetime expected credit losses for all available-for sale debt securities in an unrealized loss position. 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. The Company has the ability and intent to hold these investments until recovery or maturity. Available-for-sale securities maturing as of December 31: 2023 $ 25,659 2024 39,002 2025 24,366 2026 5,844 2027 2,682 Total $ 97,553 |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Sep. 30, 2023 | |
Net Income Per Common Share | |
Net Income Per Common Share | 4. Net Income Per Common Share Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the assumed conversion of all potentially dilutive securities, consisting of restricted stock awards, for which the estimated fair value exceeds the exercise price, less shares which could have been purchased with the related proceeds, unless anti-dilutive. For employee equity awards, repurchased shares are also included for any unearned compensation adjusted for tax. The table below reflects the calculation of the weighted average number of common shares outstanding, on an as if converted basis, used in computing basic and diluted earnings per common share. Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Denominator: Basic weighted average shares outstanding 29,776 31,302 30,138 32,623 Effect of dilutive stock options and restricted stock 136 85 139 86 Diluted weighted average shares outstanding 29,912 31,387 30,277 32,709 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, 2023 and 2022, approximately 2 and 25, respectively, and for the nine-month periods ended September 30, 2023 and 2022, approximately 70 and 77, 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. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2023 | |
Property and Equipment | |
Property and Equipment | 5. Property and Equipment Property and equipment consist of the following: September 30, December 31, 2023 2022 Land $ 5,098 $ 5,098 Land improvements 2,242 2,242 Buildings 51,399 51,399 Buildings and leasehold improvements 30,389 21,911 Computer equipment 133,391 119,316 Furniture, fixtures and equipment 25,361 21,323 Internally developed software 67,626 58,904 Construction in progress 13,238 16,336 328,744 296,529 Less accumulated depreciation and amortization (164,106) (149,025) Property and equipment, net $ 164,638 $ 147,504 |
Amortizable Intangible Assets
Amortizable Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Amortizable Intangible Assets | |
Amortizable Intangible Assets | 6. Amortizable Intangible Assets In January 2019, GCE completed the Acquisition. The Acquisition was accounted for in accordance with the acquisition method of accounting. Under this method the cost of the target is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Identified intangible assets of . The fair value of university partner relationships was determined using the multiple-period excess earnings method. Amortizable intangible assets consist of the following as of: September 30, 2023 Estimated Gross Net Average Useful Carrying Accumulated Carrying Life (in years) Amount Amortization Amount University partner relationships 25 $ 210,000 $ (39,515) $ 170,485 Trade names 1 280 (280) — Total amortizable intangible assets, net $ 210,280 $ (39,795) $ 170,485 Amortization expense for university partner relationships and trade names for the years ending December 31: 2023 $ 2,104 2024 8,419 2025 8,419 2026 8,419 2027 8,419 Thereafter 134,705 $ 170,485 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Leases | 7. Leases 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 months to 10 years and eight months. At lease inception, we determine the lease term by assuming 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 we recognize lease expense for these leases on a straight-line basis over the lease term. The Company had operating lease costs of As of September 30, 2023, the Company had $24,077 of non-cancelable operating lease commitments for four off-campus classroom and laboratory sites and $192 for optical fiber communication lines that had not yet commenced. The Company’s weighted-average remaining lease term relating to its operating leases is . As of September 30, 2023, the Company had financing leases. Future payment obligations with respect to the Company’s operating leases, which were existing at September 30, 2023, by year and in the aggregate, are as follows: Year Ending December 31, Amount 2023 $ 2,990 2024 14,102 2025 14,015 2026 13,992 2027 13,385 Thereafter 54,657 Total lease payments $ 113,141 Less interest 16,622 Present value of lease liabilities $ 96,519 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies Legal Matters From time to time, the Company is a party to various lawsuits, claims, and other legal proceedings that arise in the ordinary course of business, some of which are covered by insurance. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company records a liability for the loss. 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 could be material. 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. Management does not believe that any such charges would, individually or in the aggregate, have a material adverse effect on the Company’s financial condition, results of operations or cash flows. 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. Bachus. 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. The Company believes that plaintiffs’ claims are without merit and it intends to defend itself in this legal proceeding vigorously. 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. Other Matters In May 2022, we received a civil investigative demand (“CID”) from the Federal Trade Commission (“FTC”) related to the marketing services that we provide on behalf of GCU, and related activities. The CID requests the production of documents and answers to written questions. In January 2023, we received a further CID from the FTC requesting testimony on the same topic. We are cooperating with the FTC in connection with each of these CIDs. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Compensation | |
Share-Based Compensation | 9. Share-Based Compensation Incentive Plan 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, 2023, 1,081 shares were available for grants under the 2017 Plan. Restricted Stock During the nine months ended September 30, 2023, the Company granted 136 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 with the first installment on the restricted stock vesting dates. In June 2023, following the annual stockholders meeting, the Company granted 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 A summary of the activity related to restricted stock granted under the Company’s Incentive Plan since December 31, 2022 is as follows: Weighted Average Total Grant Date Shares Fair Value per Share Outstanding as of December 31, 2022 476 $ 85.32 Granted 140 $ 112.60 Vested (147) $ 86.94 Forfeited, canceled or expired (15) $ 85.90 Outstanding as of September 30, 2023 454 $ 93.18 Share-based Compensation Expense The table below outlines share-based compensation expense for the nine months ended September 30, 2023 and 2022 related to restricted stock granted: 2023 2022 Technology and academic services $ 1,814 $ 1,812 Counseling services and support 5,155 4,720 Marketing and communication 143 114 General and administrative 2,846 2,838 Share-based compensation expense included in operating expenses 9,958 9,484 Tax effect of share-based compensation (2,489) (2,371) Share-based compensation expense, net of tax $ 7,469 $ 7,113 |
Treasury Stock
Treasury Stock | 9 Months Ended |
Sep. 30, 2023 | |
Equity Transactions | |
Treasury Stock | 10. Treasury Stock On October 25, 2023, the Board of Directors increased the authorization under its existing stock repurchase program by $200,000 reflecting an aggregate authorization for share repurchases since the initiation of our program of $2,045,000. The expiration date on the repurchase authorization is March 1, 2025. 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. 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, 2023 the Company repurchased 1,035 shares of common stock, at an aggregate cost of $113,954 . As of September 30, 2023, there remained in October 2023). 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 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions | |
Related Party Transactions | 11. Related Party Transactions Related party transactions include transactions between the Company and certain of its affiliates. The following transactions were in the normal course of operations and were measured at the exchange amount, which was the amount of consideration established and agreed to by the parties. As of and for the nine months ended September 30, 2023 and 2022, related party transactions consisted of the following: Affiliates 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. 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 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions have been eliminated in consolidation. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information 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, 2022. They do not include all of the information and footnotes required by U.S. generally accepted accounting principles 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. Interim results are not necessarily indicative of results for a full year. 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, 2022 from which the December 31, 2022 balance sheet information was derived. |
Investments | Investments As of September 30, 2023 and December 31, 2022, the Company considered its investments in corporate bonds, agency bonds 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, with unrealized gains and losses, net of tax, reported as a separate component of other comprehensive income. Unrealized losses considered to be other-than-temporary are recognized currently in earnings. Amortization of premiums, accretion of discounts, interest and dividend income and realized gains and losses are included in interest and other income. |
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 (the “Secured Note”) which was repaid by GCU in the fourth quarter of 2021. In connection therewith, Except for identified liabilities assumed by GCU, GCE retained responsibility for all liabilities of the business arising from pre-closing operations. |
Internally Developed Software | Internally Developed Software The Company capitalizes certain costs related to internal-use software, primarily consisting of direct labor associated with creating the software. Software development projects generally include three stages: the preliminary project stage (all costs are expensed as incurred), the application development stage (certain costs are capitalized and certain costs are expensed as incurred) and the post-implementation or operation stage (all costs are expensed as incurred). Costs capitalized in the application development stage include costs of design, coding, integration, and testing of the software developed. Capitalization of costs requires judgment in determining when a project has reached the application development stage and the period over which we expect to benefit from the use of that software. Once the software is placed in service, these costs are amortized straight-line over the estimated useful life of the software, which is generally three years . These assets are a component of our property and equipment, net in our consolidated balance sheets. |
Capitalized Content Development | Capitalized Content Development The Company capitalizes certain costs to fulfill a contract related to the development and digital creation of content on a course-by-course basis for each university partner, many times in conjunction with faculty and subject matter experts. The Company is responsible for the conversion of instructional materials to an on-line format, including outlines, quizzes, lectures, and articles in accordance with the educational guidelines provided to us by our university partners, prior to the respective course commencing. We also capitalize the creation of learning objects which are digital assets such as online demonstrations, simulations, and case studies used to obtain learning objectives. 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 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. Capitalized content development assets are included in other assets in our consolidated balance sheets. 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 which corresponds with course’s review and major revision cycle. As of September 30, 2023 and December 31, 2022, |
Long-Lived Assets | Long-Lived Assets The Company evaluates the recoverability of its long-lived assets for impairment, other than goodwill, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. 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 assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. |
Leases | Leases The Company determines if an arrangement is a lease at inception and evaluates the lease agreement to determine whether the lease is a finance or operating lease. 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. 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 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. Leases primarily consist of off-campus classroom and laboratory site locations and office space. |
Business Combinations | Business Combinations The purchase price of an acquisition is allocated to the assets acquired, including tangible and intangible assets, and liabilities assumed, based on their respective fair values at the acquisition date. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred. The determination of the fair value and useful lives of the intangible assets acquired involves certain judgments and estimates. These judgements can include, but are not limited to, the cash flows that an asset is expected to generate in the future and the appropriate weighted average cost of capital. The net assets and result of operations of an acquired entity are included in the Company’s consolidated financial statements from the acquisition date. |
Goodwill and Amortizable Intangible Assets | Goodwill and Amortizable Intangible Assets Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the tangible and intangible assets acquired and liabilities assumed. Goodwill is assessed at least annually for impairment during the fourth quarter, or more frequently if circumstances indicate potential impairment. Goodwill is allocated to our reporting unit at the education services segment, which is the same as the entity as a whole (entity level reporting unit). The Company has concluded there is reporting unit for goodwill impairment consideration. The Financial Accounting Standards Board has issued guidance that permits an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. The Company reviews goodwill at least annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Finite-lived intangible assets that are acquired in a business combination are recorded at fair value on their acquisition dates and are amortized using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or on a straight-line basis over the estimated useful life of the intangible asset if the pattern of economic benefit cannot be reliability determined. Finite-lived intangible assets consist of university partner relationships and trade names. 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, 2023. 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, 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 | The Company measures and recognizes compensation expense for share-based payment awards made to employees and directors. 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. The Company recognizes forfeitures as they occur. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and benefits and accrued liabilities expenses approximate their fair value based on the liquidity or the short-term maturities of these instruments. The fair value of investments was 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. The unit of account used for valuation is the individual underlying security. -Level 1 – inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. -Level 2 – inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in non-active markets; and model-derived valuations whose inputs are observable or whose significant valuation drivers are observable. -Level 3 – unobservable inputs that are not corroborated by market data. Investments are comprised of corporate bonds, commercial paper and agency bonds. |
Revenue Recognition | Revenue Recognition 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 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). Service revenue is recognized over time using the output method of measuring progress towards complete satisfaction of the single performance obligation. The output method provides a faithful depiction of the performance toward complete satisfaction of the performance obligation and can be tied to the time elapsed which is consumed evenly over the service period and is a direct measurement of the value provided to our partners. The service fees received from our partners over the term of the agreement are variable in nature in that they are dependent upon the number of students attending the university partner’s program and revenues generated from those students during the service period. Due to the variable nature of the consideration over the life of the service arrangement, the Company considered forming an expectation of the variable consideration to be received over the service life of this one performance obligation. However, since the performance obligation represents a series of distinct services, the Company recognizes the variable consideration that becomes known and billable because these fees relate to the distinct service period in which the fees are earned. The Company meets the criteria in the standard and exercises the practical expedient to not disclose the aggregate amount of the transaction price allocated to the single performance obligation that is unsatisfied as of the end of the reporting period. 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. There are no refunds or return rights under the Services Agreements. The Company’s receivables represent unconditional rights to consideration from our Services Agreements with our university partners. Accounts receivable, net is stated at net realizable value and contains billed and unbilled revenue. The Company utilizes the allowance method to provide for doubtful accounts based on its evaluation of the expected credit losses. There have been reserves established as of September 30, 2023. The Company will continue to review and revise its allowance methodology based on its collection experience with its partners. For our partners with unbilled revenue, revenue recognition occurs in advance of billings. Billings for some university partners do not occur until after the service period has commenced and final enrollment information is available. Our unbilled revenue of $7,778 and $5,560 as of September 30, 2023 and December 31, 2022, 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. We generally receive payments for our services billed within 30 days of invoice. These payments are recorded as deferred revenue until the services are delivered and revenue is recognized. |
Allowance for Credit Losses | Allowance for Credit Losses 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. 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 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. The Company monitors the impact of other factors on expected credit losses. |
Technology and Academic Services | Technology and Academic Services Technology and academic services consist primarily of costs related to ongoing maintenance of educational infrastructure, including online course delivery and management, student records, assessment, customer relations management and other internal administrative systems. This also includes costs to provide support for content development, faculty training, development and other faculty support, technology support, rent and occupancy costs for university partners’ off-campus classroom and laboratory sites, and assistance with state compliance. This expense category includes salaries, benefits and share-based compensation, information technology costs, amortization of content development costs and other costs associated with these support services. This category also includes an allocation of depreciation, amortization, and occupancy costs attributable to the provision of certain services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations. |
Counseling Services and Support | Counseling Services and Support Counseling services and support consist primarily of costs including team-based counseling and other support to prospective and current students as well as financial aid processing. This expense category includes salaries, benefits and share-based compensation, and other costs such as dues, fees and subscriptions and travel costs. This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of certain services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations. |
Marketing and Communication | Marketing and Communication Marketing and communication includes lead acquisition, digital communication strategies, brand identity advertising, media planning and strategy, video, data science and analysis, marketing to potential students and other promotional and communication services. This expense category includes salaries, benefits and share-based compensation for marketing and communication personnel, brand advertising, marketing leads and other promotional and communication expenses. This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of certain services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations. Advertising costs are expensed as incurred. |
General and Administrative | General and Administrative General and administrative expenses include salaries, benefits and share-based compensation of employees engaged in corporate management, finance, human resources, compliance, and other corporate functions. 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. |
Commitments and Contingencies | Commitments and Contingencies The Company accrues for contingent obligations when it is probable that a liability has been incurred and the amount is reasonably estimable. When the Company becomes aware of a claim or potential claim, the likelihood of any loss exposure is assessed. If it is probable that a loss will result and the amount of the loss is estimable, the Company records a liability for the estimated loss. If the loss is not probable or the amount of the potential loss is not estimable, the Company will disclose the claim if the likelihood of a potential loss is reasonably possible and the amount of the potential loss could be material. Estimates that are particularly sensitive to future changes include tax, legal, and other regulatory matters, which are subject to change as events evolve, and as additional information becomes available during the administrative and litigation process. The Company expenses legal fees as incurred. |
Concentration of Credit Risk | Concentration of Credit Risk 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, 2023 and December 31, 2022 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. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash balances, which are primarily invested in money market funds or on deposit at high credit quality financial institutions in the U.S. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2023 and December 31, 2022, the Company had $56,119 and $119,639, 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, with 87.0% and 84.9% of total service revenue for the nine-month periods ended September 30, 2023 and 2022, 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 | 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. Actual results could differ from those estimates. |
Segment Information | Segment Information 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments | |
Schedule of reconciliation of available-for-sale investments from cost basis to fair value | As of September 30, 2023 Gross Gross Adjusted Unrealized Unrealized Estimated Cost Gains (Losses) Fair Value Corporate bonds $ 74,323 $ — $ (742) $ 73,581 Commercial Paper 4,988 — (1) 4,987 Agency bonds 19,020 — (35) 18,985 Total investments $ 98,331 $ — $ (778) $ 97,553 |
Schedule of available-for-sale securities maturities | Available-for-sale securities maturing as of December 31: 2023 $ 25,659 2024 39,002 2025 24,366 2026 5,844 2027 2,682 Total $ 97,553 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Net Income Per Common Share | |
Schedule of weighted average number of common shares outstanding | Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Denominator: Basic weighted average shares outstanding 29,776 31,302 30,138 32,623 Effect of dilutive stock options and restricted stock 136 85 139 86 Diluted weighted average shares outstanding 29,912 31,387 30,277 32,709 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property and Equipment | |
Schedule of property and equipment | September 30, December 31, 2023 2022 Land $ 5,098 $ 5,098 Land improvements 2,242 2,242 Buildings 51,399 51,399 Buildings and leasehold improvements 30,389 21,911 Computer equipment 133,391 119,316 Furniture, fixtures and equipment 25,361 21,323 Internally developed software 67,626 58,904 Construction in progress 13,238 16,336 328,744 296,529 Less accumulated depreciation and amortization (164,106) (149,025) Property and equipment, net $ 164,638 $ 147,504 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Amortizable Intangible Assets | |
Summary of amortizable intangible assets | September 30, 2023 Estimated Gross Net Average Useful Carrying Accumulated Carrying Life (in years) Amount Amortization Amount University partner relationships 25 $ 210,000 $ (39,515) $ 170,485 Trade names 1 280 (280) — Total amortizable intangible assets, net $ 210,280 $ (39,795) $ 170,485 |
Schedule of amortization expense for university partner relationships and trade names | Amortization expense for university partner relationships and trade names for the years ending December 31: 2023 $ 2,104 2024 8,419 2025 8,419 2026 8,419 2027 8,419 Thereafter 134,705 $ 170,485 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Schedule of future payment obligations with respect to operating leases | Year Ending December 31, Amount 2023 $ 2,990 2024 14,102 2025 14,015 2026 13,992 2027 13,385 Thereafter 54,657 Total lease payments $ 113,141 Less interest 16,622 Present value of lease liabilities $ 96,519 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Compensation | |
Schedule of activity related to restricted stock granted under company's incentive plan | Weighted Average Total Grant Date Shares Fair Value per Share Outstanding as of December 31, 2022 476 $ 85.32 Granted 140 $ 112.60 Vested (147) $ 86.94 Forfeited, canceled or expired (15) $ 85.90 Outstanding as of September 30, 2023 454 $ 93.18 |
Schedule of share-based compensation expense | 2023 2022 Technology and academic services $ 1,814 $ 1,812 Counseling services and support 5,155 4,720 Marketing and communication 143 114 General and administrative 2,846 2,838 Share-based compensation expense included in operating expenses 9,958 9,484 Tax effect of share-based compensation (2,489) (2,371) Share-based compensation expense, net of tax $ 7,469 $ 7,113 |
Nature of Business (Details)
Nature of Business (Details) | 9 Months Ended |
Sep. 30, 2023 item | |
Nature Of Operations | |
Number of off-campus classroom and laboratory sites | 4 |
Number of university partners | 25 |
Grand Canyon University [Member] | |
Nature Of Operations | |
Number of colleges operated | 9 |
Number of off-campus classroom and laboratory sites | 6 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||
Jul. 01, 2018 USD ($) | Sep. 30, 2023 USD ($) item | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment item | Sep. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Summary Of Significant Accounting Policies | |||||||||||
Investments | $ 97,553 | $ 97,553 | $ 61,295 | ||||||||
Other assets | $ 2,136 | $ 2,136 | 1,687 | ||||||||
Number of operating segments | segment | 1 | ||||||||||
Number of reporting units | segment | 1 | ||||||||||
Number of university partners | item | 25 | 25 | |||||||||
Goodwill | $ 160,766 | $ 160,766 | 160,766 | ||||||||
Unbilled revenue | 7,778 | 7,778 | 5,560 | ||||||||
Amounts written off | 0 | ||||||||||
Allowance for doubtful accounts | 0 | 0 | |||||||||
Stockholders equity | 650,530 | $ 591,556 | 650,530 | $ 591,556 | $ 645,425 | $ 659,250 | 637,619 | $ 606,638 | $ 706,437 | $ 1,045,047 | |
Income tax expense | 8,537 | $ 6,249 | 34,636 | $ 34,463 | |||||||
Cash in excess of FDIC insured limits | $ 56,119 | $ 56,119 | 119,639 | ||||||||
Revenue Benchmark | Customer Concentration Risk | Grand Canyon University | |||||||||||
Summary Of Significant Accounting Policies | |||||||||||
Concentration risk percentage | 87% | 84.90% | |||||||||
Computer Software | |||||||||||
Summary Of Significant Accounting Policies | |||||||||||
Estimated average useful life | 3 years | 3 years | |||||||||
Capitalized Content Development | |||||||||||
Summary Of Significant Accounting Policies | |||||||||||
Estimated average useful life | 4 years | 4 years | |||||||||
Other assets | $ 906 | $ 906 | $ 910 | ||||||||
University partner relationships | |||||||||||
Summary Of Significant Accounting Policies | |||||||||||
Estimated average useful life | 25 years | 25 years | |||||||||
Minimum | |||||||||||
Summary Of Significant Accounting Policies | |||||||||||
Initial contract terms of service agreements | 7 years | ||||||||||
Maximum | |||||||||||
Summary Of Significant Accounting Policies | |||||||||||
Initial contract terms of service agreements | 15 years | ||||||||||
Grand Canyon University | |||||||||||
Summary Of Significant Accounting Policies | |||||||||||
Purchase price of assets | $ 870,097 | ||||||||||
Master Services Agreement | Grand Canyon University | |||||||||||
Summary Of Significant Accounting Policies | |||||||||||
Percentage of tuition and fee revenue used for closing of purchase agreement | 60% |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Investments | |||
Investments - Available-for-sale | $ 97,553 | $ 61,295 | |
Available-for-sale investments | |||
Adjusted Cost | 98,331 | ||
Gross Unrealized (Losses) | (778) | ||
Estimated Fair Value | 97,553 | ||
Net unrealized loss on available-for-sale debt securities | 60 | $ 417 | |
Corporate bonds | |||
Available-for-sale investments | |||
Adjusted Cost | 74,323 | ||
Gross Unrealized (Losses) | (742) | ||
Estimated Fair Value | 73,581 | ||
Commercial paper | |||
Available-for-sale investments | |||
Adjusted Cost | 4,988 | ||
Gross Unrealized (Losses) | (1) | ||
Estimated Fair Value | 4,987 | ||
Agency bonds | |||
Available-for-sale investments | |||
Adjusted Cost | 19,020 | ||
Gross Unrealized (Losses) | (35) | ||
Estimated Fair Value | $ 18,985 |
Investments - Maturities of Ava
Investments - Maturities of Available-for-sale Investments (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Investments | |
2023 | $ 25,659 |
2024 | 39,002 |
2025 | 24,366 |
2026 | 5,844 |
2027 | 2,682 |
Total | $ 97,553 |
Net Income Per Common Share - S
Net Income Per Common Share - Summary of Weighted Average Number of Common Shares Outstanding (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Denominator: | ||||
Basic weighted average shares outstanding | 29,776 | 31,302 | 30,138 | 32,623 |
Effect of dilutive stock options and restricted stock | 136 | 85 | 139 | 86 |
Diluted weighted average shares outstanding | 29,912 | 31,387 | 30,277 | 32,709 |
Net Income Per Common Share - A
Net Income Per Common Share - Additional Information (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restricted Stock Grants | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Stock awards outstanding excluded from the calculation of diluted earnings | 2 | 25 | 70 | 77 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property and Equipment | ||
Property and equipment | $ 328,744 | $ 296,529 |
Less accumulated depreciation and amortization | (164,106) | (149,025) |
Property and equipment, net | 164,638 | 147,504 |
Land | ||
Property and Equipment | ||
Property and equipment | 5,098 | 5,098 |
Land Improvements | ||
Property and Equipment | ||
Property and equipment | 2,242 | 2,242 |
Buildings | ||
Property and Equipment | ||
Property and equipment | 51,399 | 51,399 |
Buildings and Leasehold Improvements | ||
Property and Equipment | ||
Property and equipment | 30,389 | 21,911 |
Computer Equipment | ||
Property and Equipment | ||
Property and equipment | 133,391 | 119,316 |
Furniture, Fixtures and Equipment | ||
Property and Equipment | ||
Property and equipment | 25,361 | 21,323 |
Internally Developed Software | ||
Property and Equipment | ||
Property and equipment | 67,626 | 58,904 |
Construction in Progress | ||
Property and Equipment | ||
Property and equipment | $ 13,238 | $ 16,336 |
Amortizable Intangible Assets -
Amortizable Intangible Assets - Net Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jan. 31, 2019 |
Intangible Assets | ||
Gross Carrying Amount | $ 210,280 | |
Accumulated Amortization | (39,795) | |
Net Carrying Amount | $ 170,485 | |
Orbis Education | ||
Intangible Assets | ||
Intangible assets | $ 210,280 | |
University partner relationships | ||
Intangible Assets | ||
Estimated average useful life | 25 years | |
Gross Carrying Amount | $ 210,000 | |
Accumulated Amortization | (39,515) | |
Net Carrying Amount | $ 170,485 | |
University partner relationships | Orbis Education | ||
Intangible Assets | ||
Intangible assets | $ 210,000 | |
Trade names | ||
Intangible Assets | ||
Estimated average useful life | 1 year | |
Gross Carrying Amount | $ 280 | |
Accumulated Amortization | $ (280) |
Amortizable Intangible Assets_2
Amortizable Intangible Assets - Amortization Expense for Developed Curricula and Student Relationships (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Amortization expense | |
2023 | $ 2,104 |
2024 | 8,419 |
2025 | 8,419 |
2026 | 8,419 |
2027 | 8,419 |
Thereafter | 134,705 |
Net Carrying Amount | $ 170,485 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) lease item | Sep. 30, 2022 USD ($) | |
Leases | ||||
Lessee, Operating Lease, Existence of Option to Extend [true false] | false | |||
Operating lease costs | $ 3,525 | $ 2,789 | $ 9,695 | $ 7,596 |
Non-cancelable operating lease commitments not yet commenced | 24,077 | $ 24,077 | ||
Number of off-campus classroom and laboratory sites | item | 4 | |||
Optical fiber communication lines not yet commenced | $ 192 | $ 192 | ||
Weighted-average remaining lease term | 7 years 11 months 26 days | 7 years 11 months 26 days | ||
Weighted-average discount rate of operating leases | 3.78% | 3.78% | ||
Number of financing leases | lease | 0 | |||
Minimum | ||||
Leases | ||||
Term of operating leases | 8 months | 8 months | ||
Maximum | ||||
Leases | ||||
Term of operating leases | 10 years 8 months | 10 years 8 months |
Leases - Future Payment Obligat
Leases - Future Payment Obligations (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases | |
2023 | $ 2,990 |
2024 | 14,102 |
2025 | 14,015 |
2026 | 13,992 |
2027 | 13,385 |
Thereafter | 54,657 |
Total lease payments | 113,141 |
Less interest | 16,622 |
Present value of lease liabilities | $ 96,519 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) shares in Thousands, $ in Thousands | 1 Months Ended | 9 Months Ended |
Jun. 30, 2023 shares | Sep. 30, 2023 USD ($) item shares | |
2017 Plan | ||
Share-based Compensation | ||
Shares available for grant | 1,081 | |
Maximum | 2017 Plan | ||
Share-based Compensation | ||
Shares available for grant | 3,000 | |
Restricted Stock Grants | ||
Share-based Compensation | ||
Shares granted | 140 | |
Shares withheld for taxes | 56 | |
Common stock in lieu of taxes | $ | $ 6,331 | |
Restricted Stock Grants | Share-based Payment Arrangement, Nonemployee | ||
Share-based Compensation | ||
Shares granted | 4 | |
Vesting period | 1 year | |
Restricted Stock Grants | 2008 Plan | ||
Share-based Compensation | ||
Shares granted | 136 | |
Vesting period | 5 years | |
Number of anniversaries of the vesting date following the date of grant | item | 4 | |
Restricted Stock Grants | Share-based Compensation Award, Tranche One | 2008 Plan | ||
Share-based Compensation | ||
Vesting right percentage | 20% | |
Restricted Stock Grants | Share-based Compensation Award, Tranche Two | 2008 Plan | ||
Share-based Compensation | ||
Vesting right percentage | 20% | |
Restricted Stock Grants | Share-based Compensation Award, Tranche Three | 2008 Plan | ||
Share-based Compensation | ||
Vesting right percentage | 20% | |
Restricted Stock Grants | Share-based Compensation Award Tranche Four | 2008 Plan | ||
Share-based Compensation | ||
Vesting right percentage | 20% | |
Restricted Stock Grants | Share-based Compensation Award Tranche Five | 2008 Plan | ||
Share-based Compensation | ||
Vesting right percentage | 20% |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Activity Related to Restricted Stock Granted under Company's Incentive Plan (Details) - Restricted Stock Grants shares in Thousands | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Total Shares | |
Total Shares, Outstanding, Beginning Balance | shares | 476 |
Total Shares, Granted | shares | 140 |
Total Shares, Vested | shares | (147) |
Total Shares, Forfeited, canceled or expired | shares | (15) |
Total Shares, Outstanding, Ending Balance | shares | 454 |
Weighted Average Grant Date | |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 85.32 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 112.60 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 86.94 |
Weighted Average Grant Date Fair Value, Forfeited, canceled or expired | $ / shares | 85.90 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 93.18 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Expense | ||
Share-based compensation expense | $ 9,958 | $ 9,484 |
Tax effect of share-based compensation | (2,489) | (2,371) |
Share-based compensation expense, net of tax | 7,469 | 7,113 |
Technology and academic services | ||
Share-based Compensation Expense | ||
Share-based compensation expense | 1,814 | 1,812 |
Counseling services and support | ||
Share-based Compensation Expense | ||
Share-based compensation expense | 5,155 | 4,720 |
Marketing and communication | ||
Share-based Compensation Expense | ||
Share-based compensation expense | 143 | 114 |
General and administrative | ||
Share-based Compensation Expense | ||
Share-based compensation expense | $ 2,846 | $ 2,838 |
Treasury Stock (Details)
Treasury Stock (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Oct. 25, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Oct. 31, 2023 | |
Treasury Stock | |||||||||
Common stock acquired, cost | $ 34,067 | $ 45,775 | $ 35,090 | $ 48,194 | $ 128,457 | $ 394,930 | |||
Excise tax on treasury stock repurchases | $ 978 | ||||||||
Common stock repurchase authorization | |||||||||
Treasury Stock | |||||||||
Common stock acquired, shares | 1,035 | ||||||||
Common stock acquired, cost | $ 113,954 | ||||||||
Remaining authorized repurchase amount | $ 81,892 | 81,892 | |||||||
Excise tax on treasury stock repurchases | $ 978 | ||||||||
Common stock repurchase authorization | Subsequent Event | |||||||||
Treasury Stock | |||||||||
Increase in stock repurchase plan authorized | $ 200,000 | ||||||||
Authorized amount for repurchase of common stock | $ 281,892 | ||||||||
Common stock repurchase authorization | Maximum | Subsequent Event | |||||||||
Treasury Stock | |||||||||
Authorized amount for repurchase of common stock | $ 2,045,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - Related Party - GCE Community Fund - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Related party transactions | ||
Contributions | $ 700 | $ 200 |
Due to GCECF | $ 0 | $ 0 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 35,739 | $ 30,008 | $ 124,276 | $ 113,648 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |