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01/10 20:10
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary shows strong revenue growth, increased occupancy, and multiple facility activations, supported by significant government funding. The Q&A section highlights positive hiring conditions, strong capital allocation strategies, and optimistic guidance for future revenue and EBITDA growth. Despite some uncertainties in legal matters and vague management responses, the overall sentiment is positive, with favorable financial metrics and strategic initiatives likely to boost the stock price.
Annual revenue from 4 new contract awards Approximately $320 million once stabilized occupancy is reached. This reflects significant earnings growth from 2024, despite start-up related activities negatively impacting financial guidance for the fourth quarter.
Annual run rate revenue Approximately $2.5 billion once stabilized occupancy for new awards is achieved in the first half of 2026. This is an increase driven by new contract awards.
Annual run rate EBITDA Increase by $100 million to over $450 million once stabilized occupancy for new awards is achieved. This reflects growth from new contracts.
ICE detention populations Increased by 3,700 to almost 14,000 or 37% year-over-year from the end of 2024 through the third quarter of 2025. This increase is attributed to higher enforcement activity and hiring of more agents.
Revenue from federal partners Increased 28% during the third quarter of 2025 compared with the prior year quarter. This includes a 54.6% increase in revenue from ICE and a 5% decrease in revenue from the U.S. Marshals Service.
Revenue from state partners Increased 3.6% from the prior year quarter, driven by new contracts with the State of Montana and population increases in Georgia.
Total occupancy for Safety and Community segments 76.7% for the quarter, up 1.5 points year-over-year. Adjusted for the transfer of the California City Immigration Processing Center, occupancy would have been 79.3%.
Average daily population across all facilities 55,236 during the third quarter of 2025 compared with 50,757 in the year-ago quarter. This increase was driven by more demand for services and new contracting activity.
Adjusted EPS $0.24 in the third quarter of 2025 compared with $0.20 in the third quarter of 2024, an increase of 20%. This reflects higher federal and state populations and higher average per diem rates.
Normalized FFO per share $0.48 in the third quarter of 2025 compared with $0.43 in the prior year quarter, an increase of 11.6%. This reflects higher federal and state populations and higher average per diem rates.
Adjusted EBITDA $88.8 million in the third quarter of 2025 compared with $83.3 million in the third quarter of 2024, an increase of 6.6%. This increase was driven by higher federal and state populations and higher average per diem rates.
Operating margin for Safety and Community facilities 22.7% in the third quarter of 2025 compared to 24.9% in the prior year quarter. Excluding operating losses at facilities in activation, the margin was 24%.
New Contract Awards: Four new contracts awarded for facilities: West Tennessee Detention Facility (600 beds), California City Immigration Processing Center (2,560 beds), Midwest Regional Reception Center (1,033 beds), and Diamondback Correctional Facility (2,160 beds). Expected to generate $320 million annually once stabilized.
Facility Activations: Progress in activating idle facilities, including the Dilley Immigration Processing Center, which reached full operational capacity in September.
ICE Detention Populations: Nationwide ICE detention populations reached historical highs of 60,000. ICE populations in CoreCivic facilities increased by 3,700 to almost 14,000, a 37% increase from the end of 2024.
State Partner Growth: State populations increased by 600 year-over-year, driven by new contracts with Montana and increased populations in Georgia.
Revenue Growth: Federal revenue increased by 28% year-over-year, with ICE revenue up 54.6%. State revenue increased by 3.6%.
Occupancy Rates: Total occupancy for Safety and Community segments was 76.7%, up 1.5 points year-over-year. Average daily population increased to 55,236 from 50,757.
Share Repurchase Program: Repurchased 5.9 million shares year-to-date at a cost of $121 million. Plan to accelerate buybacks in Q4.
Future Capacity: Owns 5 idle facilities with 7,000 beds and has informed ICE of 24,000 available beds for future demand.
Facility Activations: The intake process at the Midwest facility has been delayed by a lawsuit filed by the City of Leavenworth, creating uncertainty about when a favorable resolution will be achieved. Activating four idle facilities simultaneously is complex and poses operational challenges.
ICE and U.S. Marshals Service Populations: While ICE populations are at historical highs, U.S. Marshals populations have remained flat and are expected to increase only in 2026, creating a potential imbalance in revenue streams.
State Partner Challenges: Many state partners face staffing shortages, overcrowding, and outdated infrastructure, which could impact CoreCivic's ability to meet demand effectively.
Stock Valuation and Share Repurchase Program: The current stock valuation does not reflect the company's cash flows or growth potential, leading to an aggressive share repurchase plan that may limit capital availability for other strategic initiatives.
Start-Up Costs and Financial Guidance: Start-up activities for new contracts have negatively impacted financial guidance for 2025, reducing EBITDA expectations by $10 million to $11 million.
Legal and Regulatory Risks: The lawsuit involving the Midwest facility and potential delays in other legal or regulatory approvals could hinder operational and financial performance.
Revenue Projections: The company expects annual run rate revenue to reach approximately $2.5 billion once stabilized occupancy is achieved for new contract awards, anticipated during the first half of 2026.
EBITDA Projections: Annual run rate EBITDA is expected to increase by $100 million to over $450 million upon reaching stabilized occupancy for new contracts, excluding additional contract awards.
ICE Detention Population Trends: Nationwide ICE detention populations are at historical highs of around 60,000, with expectations of further increases as ICE aims to meet its 100,000-bed detention target.
U.S. Marshals Service Population Trends: Populations are expected to increase in 2026 due to anticipated enforcement activities and additional U.S. attorneys being put in place.
State Partner Demand: Conversations with state partners indicate potential for increased demand due to staffing shortages, overcrowding, and outdated infrastructure.
Idle Facility Activations: The company owns 5 idle facilities with approximately 7,000 beds and has informed ICE of close to 24,000 beds available for future demand.
Capital Expenditures: 2025 capital expenditures are forecasted at $60-$65 million for maintenance and $97.5-$99.5 million for facility activations and transportation vehicles.
Share Repurchase Program: The company plans to accelerate share repurchases in future quarters, with Q4 repurchases expected to double compared to previous quarters.
Share Repurchase Program: The company has an authorization for a share repurchase program for up to $500 million in the aggregate. During the 9 months ended September 30, 2025, the company purchased 5.9 million shares of common stock under the share repurchase program at an aggregate cost of $121 million or $20.60 per share. Since the program's authorization in May 2022, through September 30, 2025, a total of 20.4 million shares have been repurchased at an aggregate cost of $302 million or $14.81 per share. As of September 30, 2025, approximately $198 million of repurchase authorization remains available. The company plans to execute an aggressive buyback plan in the fourth quarter, likely more than double the amount done in previous quarters.
The earnings call summary shows strong revenue growth, increased occupancy, and multiple facility activations, supported by significant government funding. The Q&A section highlights positive hiring conditions, strong capital allocation strategies, and optimistic guidance for future revenue and EBITDA growth. Despite some uncertainties in legal matters and vague management responses, the overall sentiment is positive, with favorable financial metrics and strategic initiatives likely to boost the stock price.
The earnings call highlights several positive aspects: strong financial guidance, increased demand for CoreCivic's services, and potential for significant revenue growth from activating idle facilities. The Q&A session reveals high confidence in resolving legal issues and meeting demand shifts, although some management responses were unclear. Overall, the anticipation of new contracts, strategic investments in transportation, and the potential for substantial revenue from idle beds contribute to a positive outlook. Given the company's market cap, a positive stock price movement of 2% to 8% is likely over the next two weeks.
The earnings call presents a mixed picture: positive financial results with revenue growth and exceeding analyst estimates, but there are concerns about operational risks, supply chain challenges, and reliance on short-term contracts. The share repurchase program is a positive signal, but the lack of long-term contract stability with ICE and unclear management responses in the Q&A section temper the overall sentiment. Given the company's market cap and the balance of positive and negative factors, the stock price reaction is likely to remain neutral in the short term.
The earnings report showed strong financial performance with revenue and net income exceeding expectations, and a successful share repurchase program. The Q&A revealed management's optimism about future opportunities, though some uncertainty remains regarding facility activations and revenue from ICE contracts. The market cap suggests a moderate reaction, so a positive prediction is appropriate.
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