Conferencia de resultados del 3T de 2026 de Grand Canyon Education (LOPE): las matriculaciones aumentan un 5,2%

Puntos clave

• En el tercer trimestre de 2026, los ingresos por servicios aumentaron un 2,4% interanual hasta los 267,3 millones de dólares. La matrícula total en las tres plataformas creció un 5,2%, mientras que las nuevas matriculaciones totales se mantuvieron estables.
• El beneficio operativo GAAP aumentó de 18,0 millones a 51,5 millones de dólares, lo que elevó el margen operativo del 6,9% al 19,3%. El BPA diluido GAAP fue de 1,67 dólares, mientras que el BPA diluido ajustado se situó en 1,77 dólares.
• La matrícula online de GCU aumentó un 7,1%, respaldada por una mayor retención, aunque las nuevas matriculaciones se mantuvieron estables. La dirección prevé un crecimiento de un dígito medio en las nuevas matriculaciones online en el cuarto trimestre de 2026.
• Las nuevas matriculaciones de otoño en el campus presencial tradicional se mantuvieron estables, situando la matrícula total un 3% por debajo de las expectativas de la dirección. Cuatro iniciativas tienen como objetivo impulsar un crecimiento superior al 10% en el campus presencial en otoño de 2027.
• La matrícula en los campus híbridos aumentó un 14,1%, excluyendo las sedes cerradas y en proceso de cierre. La plataforma cuenta con casi 8.000 estudiantes en 48 ubicaciones, que operan ligeramente por encima del 60% de su capacidad total.
• Grand Canyon Education recompró 504.708 acciones por aproximadamente 75,1 millones de dólares durante el tercer trimestre. En lo que va de año, las recompras alcanzaron 1.926.375 acciones por 306,4 millones de dólares.

Datos financieros clave

Desempeño comercial y operativo

Campus online de GCU

La matrícula online total aumentó un 7,1%, mientras que las nuevas matriculaciones se mantuvieron estables frente a comparativas exigentes. La dirección atribuyó el crecimiento de la matrícula total a las altas tasas de retención y a la calidad de la base de estudiantes. Más del 70% de los estudiantes online están matriculados en programas conducentes a licencias profesionales, entre ellos educación, asesoramiento psicológico, enfermería, trabajo social, contabilidad y ciberseguridad.

La empresa aumentó el gasto en publicidad durante septiembre, octubre y noviembre, al tiempo que redujo el gasto en asesores de admisiones. La dirección señaló que la captación de clientes potenciales se mantuvo sólida y que los costes de adquisición se conservaron estables.

Los ingresos online por estudiante disminuyeron ligeramente en términos interanuales debido a un cambio en el mix hacia programas con tasas netas de matrícula más bajas. Esto se vio compensado en parte por los estudiantes del programa ABSN, que generan mayores ingresos, en sedes de aulas y laboratorios fuera del campus.

Campus presencial tradicional

Las nuevas matriculaciones de otoño se mantuvieron estables y la matrícula total cerró un 3% por debajo de las expectativas de la dirección. La promoción de nuevo ingreso registró un GPA promedio de 3,6, mientras que el GPA ponderado de nuevo ingreso del Honors College fue de 4,1.

La dirección expuso cuatro iniciativas para el otoño de 2027:

1. Common App: Más de 5.600 solicitudes se recibieron a través de la plataforma en septiembre y octubre. GCU prevé que este canal aporte más de 800 nuevos estudiantes adicionales en otoño de 2027.
2. Facultad de Construcción y Tecnologías Industriales: La dirección prevé al menos 1.500 nuevos estudiantes en el campus presencial en 2027.
3. Honors College: Se ha inaugurado una nueva instalación de 55.000 pies cuadrados. GCU prevé 400 nuevos estudiantes netos en el Honors College en otoño de 2027.
4. Facultad de Derecho: GCU prevé al menos 100 estudiantes de programas preparatorios de derecho, 100 estudiantes de derecho y 100 estudiantes de máster en estudios jurídicos en otoño de 2027. El Tribunal Supremo de Arizona ha aprobado por unanimidad la nueva facultad de derecho, mientras que GCU continúa tramitando la acreditación de la ABA.

En conjunto, la dirección espera que estas iniciativas eleven la matrícula del campus presencial en más de un 10% en otoño de 2027 y respalden el crecimiento durante los cinco años posteriores.

Campus híbridos

La matrícula en los campus híbridos aumentó un 14,1%, excluyendo las sedes cerradas y en proceso de cierre. GCE opera 48 ubicaciones a algo más del 60% de su capacidad y tiene el objetivo a largo plazo de alcanzar las 80 ubicaciones, con aproximadamente 300 estudiantes de enfermería y 300 estudiantes de otros programas sanitarios por centro.

La empresa prevé abrir cuatro ubicaciones en 2027: Reno (Nevada), Jacksonville (Florida), Nueva Orleans (Luisiana) y Lake Havasu (Arizona). La dirección señaló que los ingresos por estudiante híbrido multiplican por más de tres los de un estudiante online.

Asignación de capital

GCE recompró 504.708 acciones por aproximadamente 75,1 millones de dólares durante el tercer trimestre y otras 225.770 acciones después del 30 de septiembre. En lo que va de año, las recompras totalizaron 1.926.375 acciones por 306,4 millones de dólares. La autorización restante era de 394,5 millones de dólares, lo que incluye un incremento de 355 millones de dólares aprobado por el consejo de administración en octubre de 2026.

La empresa también suscribió una línea de crédito renovable a cinco años por 100 millones de dólares, principalmente para respaldar la recompra de acciones y otros fines corporativos generales. Las previsiones para el cuarto trimestre asumen que no se dispondrá de fondos de esta línea.

Previsiones de la dirección

La dirección actualizó sus previsiones para todo el año 2026 con el fin de incorporar los resultados del tercer trimestre y ajustó el rango del cuarto trimestre en función de las tendencias actuales.

• El rango de ingresos se revisó a la baja para reflejar una matrícula de otoño en GCU más débil de lo previsto y unas nuevas matriculaciones online sin cambios en el tercer trimestre.
• La dirección espera que las nuevas matriculaciones online vuelvan a registrar un crecimiento de un dígito medio en el cuarto trimestre de 2026, lo que respaldaría un crecimiento de la matrícula online total de entre el 6% y el 7%.
• Se prevé que los ingresos online por estudiante disminuyan ligeramente en términos interanuales debido al cambio en el mix de programas.
• El margen operativo proyectado se redujo debido a las menores expectativas de matrícula en el campus presencial. No obstante, la dirección sigue esperando que los márgenes se mantengan estables para el conjunto de 2026.
• Se prevé que los ingresos por intereses disminuyan en comparación con el año anterior, ya que las agresivas recompras de acciones han reducido los saldos de efectivo.
• Para 2027, la dirección prevé un crecimiento de la matrícula online de entre el 5% y el 6%, un incremento superior al 10% en el campus presencial y un avance de dos dígitos bajos en el modelo híbrido, lo que generará un crecimiento total de la matrícula por encima del 7%.

Riesgos y factores a vigilar

• La matrícula en el campus presencial se ha mantenido prácticamente estable durante tres años, y se prevé que el déficit de matriculaciones del tercer trimestre afecte a los resultados del cuarto trimestre.
• El crecimiento de la matrícula online depende en parte de la conversión del aumento de clientes potenciales generados por la publicidad. La dirección señaló que las conversiones se produjeron más tarde de lo previsto inicialmente.
• El aumento de las graduaciones y la disminución de los reingresos están presionando a la baja la matrícula online, aunque una mayor retención ha compensado parte de este impacto.
• Un crecimiento más rápido en los programas online orientados a licencias profesionales podría presionar los márgenes, ya que estos programas pueden tener un mayor coste de impartición o asociarse a tasas netas de matrícula más reducidas.
• Las nuevas ubicaciones híbridas previstas para principios de 2027 generarán costes adicionales, si bien la dirección indicó que la rentabilidad a nivel de centro está mejorando a medida que aumenta la matrícula.
• La acreditación de la ABA para la nueva facultad de derecho no podrá otorgarse hasta que se gradúe la primera promoción de estudiantes.

Puntos destacados de la sesión de preguntas y respuestas con analistas

Los analistas se centraron en la discrepancia entre el crecimiento previsto y el real de las nuevas matriculaciones online en el tercer trimestre. La dirección explicó que el aumento de la publicidad comenzó de junio a agosto, pero la conversión de clientes potenciales se produjo más tarde de lo esperado. A partir de las tendencias de octubre, noviembre y diciembre, la empresa prevé un crecimiento de un dígito medio en las nuevas matriculaciones online para el cuarto trimestre.

La dirección también afirmó que la captación de clientes potenciales a través de la web se ha estabilizado tras haber descendido, mientras que los asesores externos que trabajan directamente con distritos escolares, hospitales, empresas y bases militares siguen respaldando las matriculaciones. El gasto en publicidad está aumentando, pero la contratación de asesores de admisiones se ha ralentizado, y la dirección aseguró que los costes de adquisición de clientes se mantienen estables.

En cuanto al campus presencial, la dirección subrayó que las solicitudes a través de Common App, los programas de construcción y tecnologías industriales, la ampliación del Honors College y la nueva facultad de derecho son iniciativas acumulativas y no medidas puntuales. Asimismo, la dirección calificó de conservadoras sus estimaciones iniciales de matrícula para la facultad de derecho, pero no modificó los objetivos formales fijados para el otoño de 2027.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Good day, and thank you for standing by. Welcome to the Q3 2026 Grand Canyon Education Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sarah Collins, General Counsel. Please go ahead.

Sarah Collins

Joining me on today's call is our Chairman and CEO, Brian Mueller. Please note that many of our comments today will contain forward-looking statements that involve risks and uncertainties. Various factors could cause our actual results to be materially different from any future results expressed or implied by such statements. 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. 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 financial position in GCE.

With that, I'll turn the call over to Brian.

Brian Mueller

Good afternoon, and thank you for joining Grand Canyon Education's Third Quarter 2026 Conference Call. Total new enrollments for all 3 platforms were flat for the quarter, while total enrollments were up 5.2%. Total revenue was up 2.4%. As a reminder, the difference between the total enrollment growth rate and the revenue growth rate is largely a result of $7.5 million of service revenue moving from the third quarter to the fourth quarter due to the late fall semester start date.

Importantly, total online enrollments were up 7.1%. The quarter did not meet our expectations from a new enrollment perspective due mainly to the ground campus new enrollment miss, and that will impact our fourth quarter, which we will discuss later. However, we are still in a strong position, and I'm very confident about our long-term goals of 7% enrollment and revenue growth with slight margin expansion, partly because of 4 strategies that will reignite growth on the ground campus, which I will explain later in the call.

Now I'd like to provide details on each of our 3 platforms. Platform one, the GCU online campus. New enrollments were flat against very tough comps, while total enrollments were up 7.1%. Total enrollment was up because of very high retention rates. Retention rates are up because of the high quality of the student body across all 3 platforms. Over 70% of the students studying online are in licensure programs. Students pursuing degrees in education, counseling, nursing, social work, accounting, cyber, et cetera, are very clear about their career paths and as a result, performed well academically and have high retention rates.

An increasing percentage of these students are recruited by outside counselors working directly with school districts, hospitals, counseling centers, businesses, military bases, et cetera. This has helped us maintain growth while making adjustments in the changing advertising and lead generation environment. During the months of September, October and November, we continue to increase our advertising spend to generate leads and are seeing strong interest in the professional careers we are targeting. The increased spend is offset by a reduced enrollment counselor spend. We expect new online enrollments to return to a mid-single-digit growth rate in the fourth quarter. And given current retention rates, that will produce a 6% to 7% total enrollment growth rate in the fourth quarter.

Platform two, GCU's traditional ground campus. Fall new enrollments were flat compared to prior year, which caused total enrollment to be 3% below our expectations. The fall enrollment results were disappointing from a growth perspective, but very encouraging from a quality perspective. Average incoming GPAs were 3.6 for the incoming class and 4.1 weighted at the fast-growing Honors College. The energy around this college and the desire of Arizona companies to offer internships and eventually full-time employment to its graduates is at an all-time high.

We have 4 strategies we are implementing to grow the ground campus over 10% for the fall of 2027. All 4 strategies will produce growth over the next 5 years. Number one, Grand Canyon University is now on the Common App and has been since August. Over 1.5 million high school seniors in the country who apply to college use the Common App. So GCU has always been at a significant disadvantage not being on it. In September and October, applications from the Common App alone are over 5,600 and have boosted total applications for the fall of 2027 in the low double digits over prior year. GCU expects to be up in new enrollments by over 800 for fall 2027 from the Common App.

Number two, GCU expects the new College of Construction and Industrial Technologies to add a minimum of 1,500 new students to the ground campus in 2027. Careers in construction, manufacturing and industrial technologies are exploding throughout the country. GCU has 3 bachelor's programs and 12 certificate programs and will be adding students in significant numbers beginning in January. These are all students that they wouldn't have had in prior years.

Number three, GCU just opened a state-of-the-art 55,000-square-foot facility to house one of the fastest-growing Honors Colleges in the country. The fastest-growing area of applications coming from the Common App is for the Honors College. GCU started this fall with about 3,400 students in the college, but expects to add a net new 400 students for the fall of 2027. These students come from all over the country, have weighted incoming GPAs of 4.1 and are helping to build a growing academic brand strength of the university.

Number four, GCU is opening the Grand Canyon University Law School in the fall of 2027. The curriculum is written, the Dean has been hired and the construction of the space is moving rapidly. The University's new College of Law has received unanimous approval from the Arizona Supreme Court. This marks a historic milestone in Arizona legal education and establishes a pathway for GCU graduates to pursue licensure as attorneys in the state. The university is still pursuing ABA accreditation, which is not granted until after the first cohort of students has graduated.

So the Arizona Supreme Court approval is important to the first class of students. GCU expects to add a minimum of 100 additional prelaw students, 100 law students and 100 master's degree students in legal studies for the fall of 2027. These graduate students from a revenue perspective will be worth 3x what an online student is worth to Grand Canyon Education. To sum up, GCU expects the ground campus to be reignited by adding 800 additional new students because of the Common App, 1,500 additional new students in the College of Construction and Industrial Technologies, 400 in the Honors College and 300 in the new law school that would get us to 10% growth on the ground campus for fall of 2027. But all the strategies will provide growth for at least the next 5 years.

Platform three, the hybrid campuses. Grand Canyon Education's hybrid campuses had an increase in enrollment year-over-year of 14.1% in the third quarter, excluding the closed sites and those that are in teach-out, which exceeded our expectations. We have turned the corner with this platform and the future is bright. We currently have 48 locations that are slightly above 60% in total capacity. The goal is to have 80 locations with about 300 nursing students per location and an additional 300 students in other health care-related programs.

GCE opened 2 new sites in the 9 months that ended September 30, 2026, and closed 1 site. We plan to open 4 new sites in 2027, and they will be in Reno, Nevada; Jacksonville, Florida; New Orleans, Louisiana; and Lake Havasu, Arizona. Additional program offerings are being added, including the graduate nursing program with specializations at Northeastern University, which started this past fall, a hybrid occupational therapy bridge to master's program to the already successful St. Catherine's Occupational Therapy Assistant Hybrid Program beginning in the fall of 2026. An online science degree with Utica University and GCU launched a Bachelor's Science in Occupational Therapy Assistant Program and a special language pathology program at its West Valley location.

GCU is also adding a Bachelor's in Medical Laboratory Sciences Program in the fall of 2026. We currently have almost 8,000 students attending our hybrid campuses and the revenue per student is more than 3x that of an online student. To summarize this section, we expect GCU's online campus to grow in 2027 between 5% and 6%, the traditional ground campus to grow over 10% and the hybrid campuses to grow in the low double digits, bringing total enrollment growth to over 7%.

There are a couple of other items I'd like to mention regarding the third quarter. Service revenue was $267.3 million for the third quarter of 2026, an increase of $6.2 million or 2.4% as compared to $261.1 million for the third quarter of 2025. The increase year-over-year in service revenue was primarily due to an increase in university partner enrollments of 5.2%, including an increase in GCU online enrollments of 7.1% and university partner enrollments at the off-campus classroom and laboratory sites, excluding sites in teach-out or closed at 14.1%. This was partially offset by 6 days -- 6 less days of ground traditional revenue at GCU of $7.5 million in the third quarter of 2026 as a result of the shift of 6 days of revenue from the third quarter to the fourth quarter due to the later fall semester start date.

In addition, there was a slight decline year-over-year in revenue per student for online students due to the continued mix shift to students that have a slightly lower net tuition rate, partially offset by service revenue per student for ABSN students at off-campus classroom and laboratory sites, which generate significantly higher revenue per student. Operating income and operating margin for the 3 months ended September 30, 2026, was $51.5 million and 19.3%, respectively, as compared to $18 million and 6.9%, respectively, for the same period in 2025. Operating income and operating margin, excluding amortization, nonrecurring costs and fixed asset disposals was at $54.7 million and 20.5%, respectively, for the 3 months ended September 30, 2026.

Net income was $43 million for the third quarter of 2026. GAAP diluted income per share for the 3 months ended in September 30, 2026, is $1.67. Included in our Form 8-K filed with the SEC, we have included non-GAAP net income and non-GAAP diluted income per share for the 3 months ended September 30, 2026, and '25. 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 3 months ended September 30, 2026, and 2025 was $1.77 and $1.78, respectively, which is $0.01 above consensus estimates.

Last, I would like to provide color on the guidance we have provided in our 8-K filed today. As a reminder, the guidance that we have provided in the outlook section of our 8-K filed 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. We have updated full 2026 guidance to include the third quarter actual revenue and earnings metrics. We have narrowed the range in the fourth quarter to reflect current trends. The third quarter 2026 GCU online new start growth was lower than our expectations, but we expect new online enrollments to return to mid-single-digit growth in the fourth quarter of 2026.

Total online enrollment growth remains resilient due to continued retention improvements despite pressure from increasing graduations and a continued decline in reentries. We continue to anticipate online revenue per student will be slightly down year-over-year due to the mix shift to programs that have slightly lower net tuition rates. The revenue range has been lowered to reflect the actual GCU fall enrollments and the online flat new enrollments in the third quarter because of the tough comps. Online new enrollments will accelerate in the fourth quarter and total company enrollments will start to recover. A complete return to 7-plus percent enrollment increases will take place when the ground is reignited to a 10% increase in the fall of 2027.

On the expense side, we have lowered the projected operating margin due to the lower ground enrollment expectations. We continue to make investments to support university partners' growth goals and anticipate margins to be flat in 2026. As has been previously discussed, the online programs primarily that lead to licensure in which GCU is growing at an accelerated rate, either cost us more to service than the traditional online programs or at lower net tuition rates, which puts some pressure on margins. As it relates to the hybrid pillar, we will incur additional costs for the new hybrid locations that will open in early 2027, but we are experiencing increased site-level profitability due to increased enrollments.

We are estimating that interest income will decline year-over-year in 2026 due to the decline in cash balances due to more aggressive stock buybacks. Our guidance does not assume any drawing on the line of credit in quarter 4. As a reminder, effective July 1, 2026, we entered into an amended and restated master services agreement with GCU, which restructures the services fees such that going forward, service fees are calculated at 60% of tuition and academic-related fees only, ancillary fees and other revenue are for the sole benefit of GCU and a reimbursement payment that the company had been making to GCU in respect of certain academic-related costs is eliminated, and in lieu of the prior nonrenewal fee that was due if GCU did not renew the MSA at the end of the term, the company would continue to provide services to and receive service fees from GCU for an 18-month period following termination.

As previously disclosed, the company estimates that under the amended MSA, its operating income will decline by an immaterial amount due to the elimination of the academic reimbursement payment. In addition, we entered into a 5-year $100 million revolving credit facility agreement. The company intends to use borrowings under the revolving credit facility primarily to fund repurchases of its common stock under its Board-approved stock repurchase program as well as other general corporate purposes. Refer to our 8-K dated October 1, 2026, for additional details about the credit agreement.

In the third quarter of 2026, we continued to aggressively buy back our stock as we believe it remained undervalued. We repurchased 504,708 shares of our common stock at approximately $75.1 million and another 225,770 shares were repurchased since September 30, 2026, bringing the total repurchase year-to-date 1,926,375 shares for $306.4 million. This is a significant portion of the company's 2026 projected cash flow from operations and is greater than historical repurchases in each of the past 3 years.

We have $393 million (sic) [ $394.5 million ] remaining available as of today under our share repurchase authorization, which includes the increased authorization by the Board in October 2026 of $355 million. The company will evaluate if we believe our stock remains undervalued and determine the best use of our liquidity and cash flow.

I will now turn the call over to the moderator so we can answer questions. Thank you for attendance.

Operator

Our first question for today comes from the line of Jasper Bibb from Truist.

Preguntas y respuestas

Jasper Bibb

Just on the new enrollment online in the third quarter. I know you said it ended up being flat. I think you're kind of thinking more mid- to high single digits last quarter. Can you just frame kind of what the gap ended up being there and then why you're confident in getting back to mid-single-digit start growth in 4Q and 2027?

Brian Mueller

Yes. It was a little bit under what we thought, but the lead generation is very strong. We started spending more in June, July and August, and those leads are now starting to convert. And so we were a little bit behind what we thought in terms of converting those leads, but it looks very strong for October, November and December.

And so we're predicting based upon where we are right now, mid-single-digit new online growth in the fourth quarter, and that could get us -- that should get us back to 6% to 7% total online growth for the fourth quarter. And so a little bit late, but in terms of the overall quality and quantity of the leads and the conversion rates, it looks very good. It's not really off of what we originally projected. It's just a little bit later.

Jasper Bibb

Okay. That makes sense. I know GCU put out some of their own numbers in August. It just kind of seemed like the online enrollment you could back into from those was maybe a little bit stronger than things ended up being. I guess, I'm wondering if through the quarter, you had a little bit of a better July and August and September is a little bit weaker. I guess, I'm just kind of trying to understand if there was a difference in the month as you kind of work through the quarter.

Brian Mueller

No, it didn't come out exactly on a month-by-month basis as we originally predicted, but the overall number is going to be about the same as what we predicted. And so it's just a little bit later. I don't think the concern should not be about online enrollments. We're doing -- our outside counselors are really keeping things strong. We're making adjustments. We've kind of flattened out from a lead generation from a web leads perspective. Everybody has been talking about how that's dropping because people aren't going to your website to hear what you say about yourself. But that's flattened out now. That's bottomed out and it's pretty steady.

We know what to expect from a month-to-month basis. We're working really hard with Meta and with other AI companies. And we're starting to -- we're not going to talk a lot about exactly what we're doing because I think it's pretty creative. And we are starting to understand what the future is going to be. But the interest, especially in the programs we're advertising for, is very strong. And so where we're going to end up the year is pretty close to what we originally thought. It's just coming a little bit later, but we do expect a strong fourth quarter.

Jasper Bibb

Okay. No, that makes sense. Maybe last one for me. The marketing kind of expense growth outpaced revenue a little bit this quarter. Was that a timing thing? Could you maybe talk about what you're seeing in cost of acquisition and any color on how that's trending?

Brian Mueller

Yes. The cost per acquisition is holding real steady. We are putting more into advertising, understanding that the new world is taking time, but we feel like we're out in front of it as compared to most other people that are trying to make this adjustment, and we're starting to understand what the future is going to be. So we're excited, and we feel good about that. And we're doing more with less from an enrollment counselor standpoint. And so we're not hiring as rapidly as we would have in the past. And so we're saving money on the enrollment counselor salary side. We're spending more on the advertising side.

The lead generation is strong. And we think that we understand the future, and we're really excited about 2027. If we can do what we believe we can do from an online standpoint and have for 18 years, and we continue to do what we're doing from a hybrid perspective, which that's on a very strong path, it's the ground campus. And the ground campus is interesting because, yes, it's true. We've been basically flat for 3 years. But in this environment, if you're flat, you're good, especially if you don't go downmarket to get students, and we have not done that.

The average incoming GPAs of our ground campus students are actually continuing to go up. Our Honors college gets stronger. And so those 4 strategies that we talked about are strategies that are all additive. Not being on the Common App was -- we didn't understand how big a limitation that was, I don't think. Just in the September and October alone, we've got 5,600 -- over 5,600 applications that have come directly from the Common App. We have had no contact with over 4,000 of that 5,600. And so those are people that went out there to the Common App to apply to colleges and put in their qualifications. They took a look at Grand Canyon University, our tuition rate, got interested and applied.

And so that is a significant amount of activity. The greater amount of activity is going to happen in January and February. And so that combined with the construction school, which is all additive. And then the numbers I gave for the law school were very conservative. They were very conservative. The -- we're very excited about that for a lot of reasons. But the Arizona Supreme Court, that meeting was particularly surprising because they were -- they have been so impressed with what GCU has done in this marketplace the last 18 years, quality of what we've produced, that they took an unprecedented move by approving us and allowing our grads who passed the bar examination in Arizona to immediately begin practicing without completing the ABA approval process, which we will. That was a stamp of approval that really was encouraging and exciting for us.

I think we'll actually start more than 100 JD students in the fall. And we've got a pretty strict line from an admissions requirement perspective. We're not going to go under -- the data around law schools are really tested. You go below a certain pre-law examination score and the chances for success are very low. And first-time pass rates on that bar examination is something we're really gearing towards having 100% rate at that. And so I think we'll start more JD students than 100. The master's degrees in legal studies are really interesting. They are 30-credit programs. They're around $30,000 a program. They're about a year, but so many of our students are graduating in 3 years that a lot of students, for example, in our fast-growing real estate program at the baccalaureate level in our business school.

We have a 30-credit-hour master's in legal studies, real estate law program that a lot of students are interested in to round out their real estate education. And we think we can add a great deal more than the 100 students that we're projecting in that area. And then the pre-law program, that's probably a conservative estimate, too, because we're going to be offering a 3 plus 2 program and giving students a chance to complete their law degree in 5 years, starting from scratch. And so that thing could be bigger than we're projecting. And then the Honors College, the building is spectacular, and it's going to be a big draw.

And so if we can get 10% growth on our ground campus and do what we're saying in the other 2, it's going to complete -- it's going to very significantly change our financial outlook going forward. And all 4 of those strategies are not strategies that are onetime wonders. Those are all -- law school could grow to between 2,000 and 3,000 students. The Honors College is going to grow to 7,000-plus students. The construction school, I think, will grow to possibly 10,000 students over 6 or 7 years. And so those are -- the numbers we're quoting there for the ground campus are all beginning numbers with significant growth potential that would really change the financial outlook of GCE significantly. So I hope that helps in terms of 2027. Look, we'll be giving guidance, obviously, early in the year, official guidance, but I wanted to give a little bit of a look in terms of that 7% number.

It looks like we have reached the end of our third quarter conference call. We appreciate your time and interest in Grand Canyon Education. If you still have questions, please contact Jacob Lambert. Thank you very much for your attendance.

Operator

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.