Q3 2024 Grand Canyon Education Inc Earnings Call
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Speaker Change: Good day and thank you for standing by. Welcome to the Q3 2024 Grand Canyon Education earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone.
Speaker Change: You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded.
Speaker Change: I would now like to hand the conference over to your first speaker today. Dan Bachus, CFO, please go ahead.
Dan Bachus: Joining me on today's calls our chairman and CEO Brian Mueller. Please note that many of our comments today will contain forward-looking statements that involve risks and uncertainties. Spares factors could cause our actual results to be materially different from any future results expressed or implied by such statements.
Dan Bachus: These factors are discussed in our SEC filings including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.
Speaker Change: We undertake no obligation to provide updates with regard to the forward-looking statements made during this call, and we recommend that all investors review these reports thoroughly before taking a position in GCE.
Speaker Change: And with that, I will turn the call over to Brian.
Brian Mueller: Good afternoon and thank you for joining Grand Canyon Education's third quarter 2004 conference call. GCE had another solid quarter, producing online enrollment growth of 5.8% and hybrid growth excluding the closed site and those in teach-out of 12.6%.
Speaker Change: Although we are disappointed that ground enrollment is down slightly year-over-year, this was not unexpected given the widely reported challenges faced industry-wide. We also continue to produce strong retention rates while investing heavily in initiatives for our university partners.
Speaker Change: The investment GCE and its 22 partner institutions are making are based on the belief that there is a vast amount of untapped potential in today's workforce.
Speaker Change: Many recent high school graduates did not go to college this year because of exorbitant tuition rates, potentially exorbitant debt levels, and difficulty managing the FAFSA site. Many older students who could benefit from higher education are not attending because of the lack of creative delivery models that do not take into account their life situations.
Speaker Change: Grand Canyon Education will continue to grow at our stated goals over the long run because we are addressing those challenges in ways that work for students and employers.
Speaker Change: With that, I would like to review the results of the four delivery platforms at GCE.
Speaker Change: First, the online campus at Grand Canyon University. New starts were up again in the third quarter of 2024, and total enrollment growth met our long-term objectives, up 5.8% over the prior year.
Speaker Change: The new start growth rate in the low single digits in the third quarter was slightly lower than we had expected, but as we have discussed previously, the year-over-year comp was extremely tough, given growth in the third quarter of 2023 significantly exceeded our long-term objectives.
Speaker Change: and which was made more difficult given the third quarter is the largest start quarter of the year.
Speaker Change: We still anticipate starts for the fourth quarter to be up in the mid single digits even with what continues to be challenging comps
Speaker Change: There are many reasons for this but I want to highlight four. One, we continue to stay hyper focused on opportunities that exist in today's labor market and since the beginning of the pandemic, GCU has rolled out 148 new programs, emphases, and certificates across the ten colleges.
Speaker Change: These programs are tied directly to labor market opportunities for students. One of the responses of universities to the declining enrollments during the pandemic was to reduce the number of programs they offered.
Speaker Change: Two, we continue to work with employers directly to address their workforce shortages. This effort is focused on the industries of education, healthcare, technology, public safety, and the military. In the third quarter, new starts from this work increased 7.5% year over year.
Speaker Change: Number three, the retention of students in the third quarter remains strong, which we believe continues because of the relevancy of the programs the students are entering and their direct tie to the students career aspirations.
Speaker Change: 4. GCU has resisted responding to the slower growth during the pandemic by raising tuition significantly, which many institutions have done. Online net tuition increases since 2018 have averaged approximately 1% per year.
Speaker Change: The reason Grand Canyon Education and its largest partner Grand Canyon University has produced consistent results over the last 16 years is that we stay focused on programs that are of real benefit to students and employers.
Speaker Change: I want to reiterate that the low single-digit new online start number was due to the above-average growth rates one year ago.
Speaker Change: Again, we will continue to stay focused on our stated growth plan and believe new start growth will return to mid-single-digit rates in the fourth quarter and continue at that level into next year.
Speaker Change: Second, the GCU ground campus for traditional students. New and total traditional campus enrollment was down slightly year over year. Although this is a disappointing result, this is equal to or better than what is occurring nationwide.
Speaker Change: Department of Education's FAFSA issues in which processing problems and glitches caused major delays in universities receiving the FAFSA data from eligible students, and once they did, millions of forms were found to have errors and needed to be reprocessed, forcing a lot of universities to push back deadlines.
Speaker Change: As a result of these delays, the number of FAFSA completions among high school seniors is down significantly, including at GCU.
Speaker Change: According to preliminary data released recently by the National Student Clearinghouse Research Center, freshman enrollment dropped more than five percent from last year at colleges and universities.
Speaker Change: and that at both public and private four-year schools that admit the largest share of students receiving Pell Grants, freshman enrollment dropped by more than 10% from 2022-2023 levels.
Speaker Change: Our percentage of ground traditional students that receive Pell Grants is comparable to state universities.
Speaker Change: GCU ended its recruiting cycle up year over year as was expected in applications and registrations with students that did not complete a FASFA but was down in applications and registrations with students that completed the FASFA.
Speaker Change: GCU will be able to reaccelerate growth on the ground campus because of GCU's significant advantages including a very low price point, very low average debt levels, percent of students completing in less than four years, and the relevancy of GCU academic programs.
Speaker Change: We anticipate that GCU will benefit from from both trends.
Speaker Change: We will continue to focus on meeting GCU's growth goals for traditional students attending on GCU's campus, with GCU's goal still being 50,000 and focus on traditional age students across the country who want to do their academic work from home.
Speaker Change: It is our understanding that the Department of Education continues to work on fixes to the FAFSA issues and that the initial results have been positive.
Speaker Change: We believe that this, along with a number of strategy changes
Speaker Change: To address this specific challenge for 2025-26 that we have made will help us meet the university's new enrollment growth goals of a 15% increase in new enrollments over 2024-25.
Speaker Change: Third, Grand Canyon Education's hybrid campus had an increase in enrollment year-over-year of 8.1 percent in the third quarter.
Speaker Change: Excluding the closed site and those that are on teach-out, enrollment increased 12.6 percent year-over-year.
Speaker Change: New fall enrollments, excluding the closed site, and those that are on Teach Out were up approximately 10% year-over-year, which was slightly better than our projected mid to high single-digit growth year-over-year expectation.
Speaker Change: We expect a new enrollment growth rate in the spring of 2025 to show similar growth on a year-over-year basis.
Speaker Change: There are two main reasons for this continued growth. Number one, almost all of our active ABSN partners have responded to the younger students interested in ABSN programs by admitting advanced standing students or are in the process of making that change.
Speaker Change: Students with partially completed degrees haven't accumulated.
Speaker Change: a great deal of debt and are very interested in nursing careers but didn't have an efficient way to earn the prerequisite science coursework.
Speaker Change: GCU created the science courses and some other Gen Ed courses so they could be delivered online in eight weeks.
Speaker Change: Students can access these courses from anywhere in the world.
Speaker Change: There are start opportunities almost every week.
Speaker Change: These courses have been made very affordable, are taught by experienced faculty, class sizes are low, and there's a tremendous amount of academic support, including an artificial intelligence project that went live in October 2023, which provides students 24-7 access to tutoring.
Speaker Change: Since implementing these courses, we have already enrolled approximately 11,522 students.
Speaker Change: We have a waterfall report that allows us to know how students are progressing through their prereq courses and when they will be eligible to start at one of our ABSN sites.
Speaker Change: The success rate of students who successfully enter the ABS-N program is in the high 80s, and the first-time pass rate on the NCLEX exam is approximately 90%.
Speaker Change: We now have an extremely efficient way to get students academically eligible and prepared to enter the program.
Speaker Change: These positive results, we anticipate, will continue. There has never been greater interest among potential students for entering the healthcare professions, and specifically nursing.
Speaker Change: Because of the low unemployment rate, the interest has shifted to these younger students who haven't accumulated a great deal of debt, completing a bachelor's degree in another area, and are currently underemployed.
Speaker Change: Nearly all our partners have responded positively to the changes needed to serve the advanced scanning student.
Speaker Change: Our goal is to still have 80 locations with our partners, with 40 of those locations being GCU locations.
Speaker Change: Fourth, the Center for Workforce Development at Grand Canyon University. In the 2022-23 school year, we started 80 students in GCU's electricians pre-apprenticeship program in partnership with companies that are experiencing labor shortages in that area and are excited about hiring GCU's graduates.
Speaker Change: The program consists of four four-credit courses and runs one semester
Speaker Change: 74 students successfully completed the program in the first year.
Speaker Change: This past school year we started 233 students in the program. 123 students completed this program in the fall and 82 in the spring of 2024.
Speaker Change: GCU has 164 students enrolled in this program in the fall of 2024, including 23 in Austin, Texas.
Speaker Change: A year ago, GCU also started 19 students in a manufacturing certificate program and has 23 students in that program this fall.
Speaker Change: GCU is running a small parts manufacturing business on campus. It is doing work for some of the major companies in Arizona. These students are attending school for 20 hours a week and then work in the facility as a paid employee for 20 hours.
Speaker Change: At the end of the semester, they receive a manufacturing certificate and become eligible for employment in Arizona's fast-growing manufacturing industry.
Speaker Change: GCU's growing engineering college also has students assisting with this project.
Speaker Change: Once this concept has been successfully proved out, we expect to work with GCU to scale this program and then add others.
Speaker Change: I started out talking about the relevant programs and creative delivery models that GCE has implemented with its 22 partner institutions.
Speaker Change: In the six plus years since GCE has become a service provider, it has helped its partners accomplish the following.
Speaker Change: In that time, GCE has helped Grand Canyon University graduate 175,209 students.
Speaker Change: 47,419 in education, including 22,492 first-time teachers at a time when teacher shortages have created a national crisis.
Speaker Change: 47,615 in nursing and healthcare professions, including 2,594 pre-licensure nurses at a time when there was a huge shortage of nurses.
Speaker Change: 35,211 in the College of Humanities and Social Sciences, including thousands in counseling and social work, where there are also huge shortages.
Speaker Change: College of Business has become one of the largest business schools in America and has produced 30,577 graduates.
Speaker Change: The College of Science, Engineering and Technology has grown by 218% and provided 7,127 graduates.
Speaker Change: The Doctoral College, Honors College, and the College of Theology also continue to grow. In addition, GCE has helped its other partners graduate 17,644 pre-licensure nurses and occupational therapist assistants.
Speaker Change: The numbers that I have just cited have all happened in the past six plus years since the GCU-GCE transaction and since GCE has become an education services provider.
Speaker Change: Service revenue was $238.3 million for the third quarter of 2024, an increase of $16.4 million or 7.4 percent as compared to $221.9 million for the third quarter of 2023.
Speaker Change: The increase year-over-year in service revenue is primarily due to an increase in GCU enrollments of 4%,
Speaker Change: operating income for the three months that ended September 30th 2024 was 48.2 million, an increase of 6.7 million as compared to 41.5 million for the same period in 2023.
Speaker Change: The operating margin for the three months ended September 30, 2024 was 20.2%, as compared to 18.7% for the three months ended September 30, 2023.
Speaker Change: Net income increased 16% to $41.5 million for the third quarter of 2024, compared to $35.7 million for the same period in 2023.
Speaker Change: Gap diluted income per share for the three months that ended September 30th 2024 is $1.42
Speaker Change: As adjusted, non-GAAP diluted income per share for the three months ended September 30th, 2023 is $1.48.
Brian Mueller: With that, I would like to turn it over to Dan Bachus, our CFO, to give a little more color on our 2024 third quarter, talk about changes in the income statements, balance sheet, and other items, as well as to discuss the updated 2024 guidance.
Dan Bachus: Thanks, Brian. Including our Form 8K filed with the SEC, we have included non-GAAP net income and non-GAAP diluted income per share for the three months ended September 30th, 2024 and 2023.
Speaker Change: The non-GAAP amounts exclude the tax-affected amount of the amortization of intangible assets of $2.1 million in the third quarters of both 2024 and 2023, and the tax-affected amount of the losses on fixed-asset disposals
Speaker Change: of $0.4 million for the three months ended September 30th, 2023.
Speaker Change: We believe the non-GAAP financial information allows investors to develop a more meaningful understanding of the company's performance over time. As adjusted, non-GAAP diluted income per share for the three months ended September 30, 2024 and 2023 is $1.48 and $1.26 respectively.
Speaker Change: Service revenue was slightly lower than our expectations in the third quarter of 2024, primarily due to lower than expected revenue per student and slightly lower than expected enrollments. As Brian discussed earlier, online and ground traditional enrollments were slightly less than we expected, while hybrid was slightly higher than we expected.
Speaker Change: We continue to see a decline in professional study students, working adult students, attending GCU's ground traditional campus in the evening. These enrollments are included in the ground enrollment number reported in our filings.
Speaker Change: Although revenue per student continues to grow on a year-over-year basis, primarily due to the growth in hybrid ABSN students,
Speaker Change: as these students generate a significantly higher revenue per student than we earn on the other students.
Speaker Change: as these agreements generally provide us with a higher revenue share percentage.
Speaker Change: are in accelerated programs, the growth was slightly less than we expected in the third quarter for two primary reasons. First, the net tuition rate for GCU's ground traditional campus was slightly less than we expected as scholarships were higher than expected. And second, ancillary revenues were less than expected.
Speaker Change: Residential enrollment was slightly less than expected, but in the third quarter we also saw a decline in student spend, which we believe is the result of inflationary pressures.
Speaker Change: As was expected, the increase in revenue per student was also due to the timing of the fall semester for the ground traditional campus.
Speaker Change: The fall semester started two days earlier in 2024 than in 2023, which had the effect of shifting $2.2 million in service revenue from the fourth quarter of 2024 to the third quarter of 2024.
Speaker Change: In addition, contract modifications for some of our university partners in which the revenue share percentage was reduced in exchange for us no longer reimbursing the partner for certain faculty costs had the effect of reducing revenue per student.
Speaker Change: Our operating margin in the third quarter of 2024 was higher than our expectations, primarily due to lower spend than expected. Although we continue to invest to meet our clients growth goals, headcount and certain other spend were less than projected.
Speaker Change: The third quarter operating margin was also positively impacted on a year-over-year basis due to the timing of the fall semester start and contract modifications.
Speaker Change: You know what?
Speaker Change: Our effective tax rate for the third quarter of 2024 was 20.8% compared to 19.3% in the third quarter of 2023 and our guidance of 20.8%.
Speaker Change: The effective tax rate increased year-over-year due to higher state income taxes partially offset by higher contributions in lieu of state income taxes year-over-year.
Speaker Change: Contributions in lieu of state income taxes of 4.5 million were made in July 2024. These contributions have the effect of increasing G&A expense in the third quarter by this amount and decreasing the effective tax rate in the third and fourth quarters by this amount, roughly three quarters in the third quarter and a quarter in the fourth quarter.
Speaker Change: Excluding the impact of the contributions in lieu of state income taxes, our effective tax rate would have been 24.9% in the third quarter of 2024 and 23% in the third quarter of 2023.
Speaker Change: We repurchased 272,497 shares of our common stock in the third quarter of 2024 at a cost of approximately $39.3 million.
Speaker Change: and another 133,792 shares were repurchased since September 30th, 2024.
Speaker Change: We have $146.4 million remaining available as of today under our share repurchase authorization.
Speaker Change: The board and the company intend to continue using a significant portion of its cash flows from operations to repurchase its shares, and we anticipate daily purchases during the rest of 2024 and early 2025 will be accelerated from what was purchase year to date.
Speaker Change: Turning to the balance sheet and cash flows total unrestricted cash and short-term investments as of September 30th 2024 were $263.6 million.
Speaker Change: GCE CapEx in the third quarter of 2024, including CapEx for new off-campus classroom and laboratory sites, was approximately 9.6 million or 4% of service revenue.
Speaker Change: We still anticipate CapEx for 2024 to be between $30 and $40 million.
Speaker Change: Last, I'd like to provide color on the guidance we have provided in our 8K file today.
Speaker Change: As a reminder, the guidance that we have provided in the Outlook section of our 8K file today is GAAP, net income, and diluted income per share with the components to adjust the GAAP amounts to non-GAAP as adjusted net income and non-GAAP as adjusted diluted income per share.
Speaker Change: We have updated full year 2024 guidance to include the third quarter revenue and earnings results. We have narrowed the fourth quarter revenue range using actual fall semester ground traditional campus and hybrid enrollment and current revenue per student trends.
Speaker Change: We continue to anticipate that new online enrollments will be up year over year in the mid-single digits in the fourth quarter of 2024, although the comps remain difficult.
Speaker Change: We have slightly increased the midpoint of our revenue guidance from previous estimates as we estimate that higher hybrid and online revenues will more than offset the lower ground campus revenue.
Speaker Change: On the expense side, we have adjusted our assumptions for current spending trend and for the investments that are planned during the rest of the year, primarily in headcount to meet our clients' growth expectations in 2025, resulting in a slight increase in operating income for the quarter.
Speaker Change: We anticipate the hybrid pillar will continue to lose money during the remainder of 2024 Given that a number of mature sites remain significantly below pre-COVID student counts
Speaker Change: The newer sites are generally back to historical margin profiles as they are back to growing at rates more similar to what we experienced pre-COVID, but to get back to profitability, the mature sites need to get back to pre-COVID enrollment levels.
Speaker Change: Those that are now admitting advanced standing students are generally back to growth. Those that are not generally continue to see enrollment challenges.
Speaker Change: In estimating interest income for the fourth quarter of 2024, we assume cash balances will decline as we use more of our excess cash to buy back stock.
Speaker Change: We have reduced the effective tax rate for the fourth quarter of 2024 to 21.2 percent.
Speaker Change: Our weighted average shares guidance assumes the increased buyback activity.
Speaker Change: The board continues to authorize the repurchase of shares as it believes the stock remains undervalued based on the metrics it uses to evaluate, including the ratio of enterprise value to adjusted EBITDA and the free cash flow yield, rather than the multiples of other education companies, as although we can be viewed as being in the same sector, there are few, if any, appropriate cops.
Speaker Change: Although we do not give 2025 financial guidance until our next quarter's earnings call, as we have just recently kicked off our 2025 budget process.
Speaker Change: Given the significant changes that have occurred with some of our hybrid contracts during 2024, I thought it'd be helpful to provide some color on the impact these changes will have on 2025 revenues and on our preliminary expectations for 2025 revenues.
Speaker Change: We estimate that the contract modifications and site closing will lower revenue by $8.9 million in comparison to 2024, but that this reduction will have only a minimal impact on operating income.
Speaker Change: Excluding these items, we currently anticipate hybrid revenues will be up year-over-year in the high single digits slash low teens and we are hopeful that our hybrid pillar will come close to breaking even.
Speaker Change: This growth rate is impacted by the fact that we have 10 locations that are at or near full capacity, and thus we will have little to no growth year-over-year in total enrollments at those locations.
Speaker Change: We are hopeful that a lot of these locations will get approval to grow in the future as they currently have waitlists
Speaker Change: excluding the impact of leap year in 2024.
Speaker Change: Online enrollments and revenues should continue to grow.
Speaker Change: in the mid to high single digits year over year, while ground revenues will be relatively flat year over year in the first eight months of the year, and up mid to high single digits in the last four months as new enrollment growth will be partially upset by the increasing percentage of graduates.
Speaker Change: Offset by the increasing percentage of graduate.
Speaker Change: I will now turn the call over to the moderator so that we can answer questions.
Speaker Change: I will now turn the call over to the moderator so that we can answer questions.
Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again, one moment, while we compile the Q&A roster.
Speaker Change: Thank you. At this time we will conduct the question and answer session. As a reminder, to ask a question you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 1 again. One moment while we compile the Q&A roster.
Speaker Change: Our first question comes from the line of Ryan Griffin with BMO capital markets. Your line is now open.
Speaker Change: Our first question comes from the line of Ryan Griffin with BMO Capital Markets. Your line is now open.
Speaker Change: Thank you so much it's actually Jeff Silber with BMO.
Speaker Change: Thank you so much. It's actually Jeff Zolder with BMO. Jeff.
Speaker Change: Yes.
Jeff Zolder: Hey, how are you guys.
Speaker Change: Hey, how are you guys?
Jeff Zolder: A few questions in your prepared remarks, you talked about.
Speaker Change: I had a few questions. You know, in your prepared remarks, you talked about the lower student spend. I think it was at the ground campus specifically because of higher inflation. Can we get a little bit more color on that? Is that something new? I mean, inflation's been around for a few years. I'm just curious why it's impacting you now.
Speaker Change: The lower student spend I think it was at the ground campus.
Speaker Change: It's typically because of higher inflation.
Speaker Change: Can we get a little bit more color on that is that something new I mean inflation has been around for a few years I'm. Just curious why it's impacting you are now.
Speaker Change: Yeah.
Speaker Change: It's, it's, inflation is...
Speaker Change: Inflation is.
Speaker Change: Probably it was a little bit of a delay there.
Speaker Change: probably it was a little bit of a delay there because higher education is such a big picture item and it was such as you know it you know there was such a strong
Speaker Change: Higher education is such a big picture item and it was such us.
Speaker Change: There was such a strong mandate to go to college, if youre going to be successful in the world I think it took people a while to catch up to the fact that there was some very hard realities that middle class families.
Speaker Change: mandate to go to college if you're going to be successful in the world, I think it took people a while to catch up to the fact that there was some very hard realities that middle-class families had to had to face.
Speaker Change: Had to face.
Speaker Change: But we think we're through that.
Speaker Change: But we think we're through that. We're very excited about what's going to happen on our ground campus this next year for three reasons. One, we've got plans in place to deal with the FASFA problem.
Speaker Change: We're very excited about what's going to happen on our ground campus. This next year for three reasons one we've.
Speaker Change: We've got plans in place to deal with the fast food problem.
Speaker Change: We've got some strategies that debt.
Speaker Change: We've got some strategies that that that we believe are going to be very successful and there are a lot of schools in the state that are very successful are very excited about what we're able to provide for students.
Speaker Change: We believe are going to be very successful and there are a lot of schools in the state that are very successful I'm very excited about what we're able to provide for students. Even if there are delays from a basketball perspective. So we're prepared for that now in our percent of those students.
Speaker Change: even if there are delays from a fast perspective. So we're prepared for that now, and our percent of those students are going to go up.
Speaker Change: We are going to go up.
Speaker Change: Secondly, the.
Speaker Change: Secondly, the middle-class students, who we lost some of those because parents got just very very nervous about sending them away from campus and incurring debt.
Speaker Change: <unk>.
Speaker Change: The middle class students.
Speaker Change: Who we lost some of those because parents got just very very nervous about sending them away from campus and incurring debt.
Speaker Change: We're thinking we're watching as some of that is subsiding.
Speaker Change: We're thinking, we're watching as some of that is subsiding. All of our, probably 90% of our programs now, students can graduate in three years.
Speaker Change: All of our probably 90% of our programs now students congratulating three years and so the word about.
Speaker Change: and so the word about
Speaker Change: The ability to come here, graduate in three years, graduate with a minimum amount of debt is starting to circulate in a way that we think is going to increase the number of out-of-state students that are willing to come because of the low debt levels that students are accumulating here.
Speaker Change: and so
Speaker Change: The we think that The third thing that we're watching is that a lot of the offers that were being made to students Especially by some of our in-state universities the last couple years those offers are no longer out there
Speaker Change: Both the University of Arizona and Arizona State University are... Arizona State just announced a $350 surcharge on every one of its students in the middle of the semester because of a $25 million shortfall. University of Arizona has significant financial issues.
Speaker Change: in an effort to keep their growth goals going. In the past years, they've made offers to students that just haven't worked out from a financial perspective for the university.
Speaker Change: We didn't do that. We stayed very true to what our scholarship program was and we're going to be I think we're our percent of in-state students now is going to go up as a result of as a result of that so
Speaker Change: The some of the shortfall this year from a revenue standpoint is just the extra spend
Speaker Change: students didn't, during Welcome Week, students and families didn't spend as much money in our bookstore. And, and so the ancillary revenues were down just like they're down almost everywhere in this country. And so
Speaker Change: Those things did impact us, but we think we're through that to a large extent.
Speaker Change: And I think the results of the election are going to give a lot of middle-class families a lot more confidence that That the financial situation that a lot of middle-class families are in is going to get better
Speaker Change: and they're going to be doing their kids a disservice by not supporting them in going to college.
Speaker Change: we're ready to have a big year on our ground campus this year and
Speaker Change: and rebounded in a very significant way. The only thing I'd add to that, Jeff, and Brian did a great job of explaining it, is we benefited, if you go back and listen to our calls for the last few years, we benefited from the fact that GCU's ancillary revenues grew at a faster pace than overall revenues.
Speaker Change: and just surprisingly this year for the reasons that Brian just explained ancillary revenues actually grew at a slightly lower pace
Speaker Change: than other revenues. And so it was just kind of a weird anomaly that we believe, as Brian said, had to do with inflationary pressures that that families are having.