Grand Canyon Education, Inc. (LOPE) Income Statement

The revenue trajectory shows a consistent mid-single-digit growth rate, with quarterly fluctuations driven by the academic calendar. The 6.7% growth in Q2 2026 aligns with the prior quarter's 6.7%, indicating no acceleration or deceleration. This stability is supported by the recurring nature of the GCU partnership, though the FAFSA rollout issues may pose a near-term risk to new student starts.

Gross margins exhibit a clear seasonal pattern, peaking in Q1 and Q4 (around 55-57%) and troughing in Q2 and Q3 (around 49-50%). This is consistent with the academic calendar, where fixed costs are spread over higher revenue in peak quarters. The stability of gross margins year-over-year suggests that LOPE has maintained pricing power and cost discipline, despite potential increases in marketing and counseling costs.

The operating margin swings from 20.9% in Q2 2025 to 35.1% in Q4 2025, highlighting the high fixed-cost nature of the business. SG&A expenses remain relatively stable in absolute terms, allowing revenue growth to drop to the bottom line. However, the Q3 2025 net income was unusually low at $16.3M, likely due to a one-time item, which warrants monitoring for recurring impact.

SG&A expenses have grown modestly from $60.2M in Q4 2024 to $70.1M in Q2 2026, a 16% increase over six quarters, slightly outpacing revenue growth. This suggests rising marketing and counseling costs, which could pressure margins if not offset by enrollment growth. The absence of R&D line item implies that technology development is embedded in SG&A or COGS, which is typical for OPM providers.