Another quarter means another opportunity to check in with some of the sector's publicly traded for-profit college operators and online program managers (OPMs). In the last few years, these companies have reacted to the mix of heightened regulation, shifting demand and new competitors affecting for-profit and online education.

While their responses are incremental, they're still notable. Here are three takeaways and other findings from this quarter's earnings calls, reports and analyst insights.

An overcorrection — or not?

2U shocked the markets with its announcement that growing competition for online education was causing it to (again) revise down its growth projections and expect smaller program sizes. It also suggested it will offer colleges fee-for-service agreements in addition to the revenue-share model for which it has become known. 

While the value of its stock was down 65% by the close of the market the following day as a result of that news, higher ed observers were less surprised.

"Their business model is going to change, and as part of that, the way they have historically made money and the margin profile around that model is going to change as well," Nick Hammerschlag, president of education investment firm Entangled Group, told Education Dive in July. "But what it also means is they are actually putting themselves in a position to keep more of their customers ... by opening up these different ways of engaging." 

Even before the announcement, 2U was making moves to give colleges more ways to work with them. In February, it brought on OPM Keypath Education as a strategic partner that would help the company work with new and existing customers on programs requiring a lower level of capital investment.

And in May, it closed on the acquisition of boot camp provider Trilogy Education. The $750 million cash-and-stock deal gave the company 32 new university partners and a model for offering short-term skills training.

Just days after it shifted its forecast, 2U dropped some slightly more anticipated news: that it would begin offering bachelor's degrees.

With the latest quarter's announcement, the OPM is "reacting to the reality of the marketplace," Trace Urdan, managing director at education investment firm Tyton Partners, told Education Dive in an interview. "That was a milestone event for sure."

OPM spinoffs continue

2U wasn't the only OPM to continue to color in its strategy this quarter. 

Grand Canyon Education (GCE), which spun off the university of the same name last summer, has its eye on more partnerships. For now, it's providing educational technology services to Grand Canyon University and institutions that have partnered with Orbis Education, which it acquired earlier this year. 

While observers are anticipating more OPM agreements for GCE, its progress has been plodding. 

"If it were up to them they'd move a little bit quicker, but when you are dealing with nonprofit (colleges and universities), whether private or public, it's always a little bit slower moving," Jeff Silber, managing director at BMO Capital Markets, told Education Dive in an interview. 

Executives told analysts on a call to discuss the company's earnings in early August that GCE is looking for three or four college partners that want to grow to about 5,000 to 7,000 students within five to seven years. They're eyeing the Midwest and Northeast, which Silber said is likely to avoid cannibalizing Grand Canyon University's (GCU) prospective student market.

Even GCE CEO Brian Mueller, who is also president of GCU, acknowledged the pace had been slow. "We're not looking to pick off a program and prove we can do it well with 100 students or 200 students or 300 students," he told analysts. "Making sure that we've got an entire institution versus just a couple of small programs is why it's taking a little longer."

GCE's strategy becomes more clear each quarter, Urdan said. "They are learning about where they think they can fit into this market in real-time and then they are sharing it."

Zovio, formerly Bridgepoint Education, is another for-profit college operator shifting into OPM mode. In recent months it has made key leadership changes and, like 2U, picked up additional program offerings through acquisitions. 

Central to its transition is being able to offload its Ashford University as an independent nonprofit, to which it expects to provide "certain services." Zovio executives told analysts on a call in early August that they expect the process to be finished by the end of the year. 

The Internal Revenue Service earlier this year signed off on the move to turn Ashford, then a for-profit university, into a nonprofit, as did its accreditor, though theirs came with a few caveats. Among them was that Ashford show its officers and related parties have divested of their financial and ownership interest in Zovio. It also flagged Ashford's latest accreditation review in order to ask for more information and a special visit to show progress on students' persistence and completion rates. 

"The level of inquiry into the independence that Ashford would have after the transaction and its ability to manage its business affairs was unusually detailed to allow the commission to make the necessary determination," Jamienne Studley, president of WASC Senior College and University Commission, Ashford's accreditor, told Education Dive in an interview earlier this month.

The company is waiting for the U.S. Department of Education to review the change.

Location, location, location

A year after the for-profit Strayer and Capella universities came together in a $1.9 billion deal, their executives told analysts that the institutions plan to continue growing their physical footprints, including the possibility of a co-branded site.

Capella, which offers only online programs, is opening locations where students can meet, study and access academic support. It will start with one in Atlanta and expects to add another in Orlando, Florida, this year. Strayer, meanwhile, is also adding more campuses, but Barrington Research analysts noted they would be less than a fifth of the size of those opened during the university's expansion in the early 2000s. 

In a call with analysts to discuss the latest quarter, Adtalem Global Education CEO Lisa Wardell suggested there is a connection between a physical location and online enrollment in that area. The company, which operates the for-profit, health care-oriented Chamberlain University, recently opened a campus in San Antonio.  

"We get greater online growth as it relates to places where we have geographic expansion, and so we expect to see that in San Antonio and the broader region in Texas as that campus opens," Wardell said. The firm is responding to a projected nursing shortage in the state.

Silber thinks the strategy could be useful. "[F]olks that are looking to go and get a degree online, if you know that (the institution is) a little bit more than a website, I think it adds some aura of authenticity and people think the quality is higher," he said.

And it's an advantage for GCE, too. "Their greatest selling technique with prospective partners is always bringing them to their campus and showing them because it's impressive and I think traditional educators get it when they see Grand Canyon in person,” Urdan said.

Location may not be a differentiator forever, he predicts. As more colleges provide online education, consolidation is likely and students will base their decisions on factors beyond geography, such as price, programmatic offerings and institutional distinction. That would result in a smaller number of big online schools.

"Right now, local brand is what matters, but that doesn't mean anything in the online world," he said.

Loose ends

• Career Education Corp. paid $30 million to settle a lawsuit alleging it used deceptive marketing practices to recruit students. It denied any wrongdoing.

• Laureate Education is eyeing modest enrollment growth for the online for-profit Walden University, while the rest of the business sets its sights on expansion in Latin America.

• Adtalem's Wardell deflected a question about the reported possible sale of the company's assets in Brazil during its analyst call.

• National American University Holdings filed to end its requirement to report its finances to the SEC. Earlier reports suggest the for-profit college operator is struggling financially as it attempts to shift entirely online.