Geo Group Q1 Earnings Call Highlights

Key Points

• Geo Group posted a strong first quarter, with revenue up 17% to about $705.2 million and adjusted EBITDA up 32% to $131.4 million. Net income nearly doubled to $38.3 million, or $0.29 per share, from $19.6 million a year earlier.
• ICE-related contracts were the main growth driver, including new and expanded detention and transportation agreements that GEO said could add roughly $520 million in annual revenue. The company also reactivated idle facilities and increased its ICE bed count to about 26,000.
• GEO raised its full-year outlook and continued buying back stock, now expecting 2026 revenue of $2.95 billion to $3.1 billion and adjusted EBITDA of $525 million to $545 million. It repurchased $50 million of shares in the quarter and still has about $359 million left under its authorization.

Geo Group NYSE: GEO reported higher first-quarter 2026 revenue and earnings, with Chairman, CEO and Founder George Zoley saying the company benefited from a large set of new and expanded contracts signed during 2025, particularly with U.S. Immigration and Customs Enforcement.

Zoley said the company’s diversified business units delivered “strong financial and operational performance” in the quarter. Revenue rose 17% to approximately $705.2 million from about $604.6 million in the prior-year quarter. Net income attributable to GEO operations increased to approximately $38.3 million, or $0.29 per diluted share, compared with approximately $19.6 million, or $0.14 per diluted share, a year earlier. Adjusted EBITDA rose 32% to approximately $131.4 million.

The company also raised its full-year 2026 outlook. GEO now expects full-year GAAP net income of $153 million to $166 million, or $1.15 to $1.25 per diluted share, on revenue of $2.95 billion to $3.1 billion. Full-year adjusted EBITDA is expected to be $525 million to $545 million. For the second quarter, GEO guided for revenue of $715 million to $725 million, GAAP net income of $33 million to $39 million and adjusted EBITDA of $130 million to $135 million.

ICE contracts drive revenue growth

Zoley said GEO won or expanded contracts in 2025 representing up to approximately $520 million in incremental annual revenue, which he described as the largest amount of new business the company has won in a single year.

In Secure Services, GEO entered into new contracts to house ICE detainees at four facilities totaling approximately 6,000 beds, including three previously idle company-owned facilities in New Jersey, Michigan and Georgia, plus a management services contract in Florida. The company also reactivated its company-owned Adelanto ICE Processing Center in California, which Zoley said had been severely underutilized because of a COVID-related court case.

Those activations represent approximately $300 million in annual revenue and increased GEO’s total beds under contract with ICE to approximately 26,000. Zoley said the census across GEO’s ICE facilities reached a high of 24,000 early this year but has since declined to approximately 21,000, still representing more than one-third of the national ICE population of about 58,000.

Zoley attributed the recent decline in ICE populations to several possible factors, including a transition in leadership at the Department of Homeland Security and an 82-day partial government shutdown involving a lapse in annual appropriations for ICE. He said GEO’s ICE services have continued uninterrupted because they are considered essential public safety services, though payment and collection timing has been delayed.

Electronic monitoring mix shifts toward higher-priced services

GEO also discussed its two-year ISAP V contract with ICE, which provides electronic monitoring and case management services for individuals on the non-detained docket. Zoley said ISAP counts were relatively stable in the quarter at approximately 180,000 to 181,000 participants.

However, he said the program has continued shifting toward more intensive and higher-priced monitoring devices. Participants using GPS ankle monitors increased to more than 48,000 from 17,000 in early 2025, while participants using the SmartLINK mobile app declined to approximately 131,000 from about 159,000 in early 2025. Zoley said approximately 111,000 ISAP participants are currently assigned to case management services.

“If this trend continues, the technology and case management mix shift would continue to increase the revenues and earnings generated under the ISAP contract, even if overall volume remains constant,” Zoley said.

The company also began providing skip tracing services to ICE in March under a two-year contract valued at up to $60 million annually. During the question-and-answer session, Zoley said GEO had completed an initial assignment quickly and was waiting for other contractors with similar awards to catch up before receiving its next assignment.

Company cites transportation and state contract growth

Zoley said GEO’s first-quarter results reflected expansion in secure transportation services for ICE and the U.S. Marshals Service. In 2025, GEO entered into new or amended contracts to expand secure ground transportation at existing and newly activated ICE facilities. It also signed a new five-year contract with the U.S. Marshals Service covering 26 federal judicial districts across 14 states. Zoley said the new and expanded transportation contracts are valued at approximately $60 million in incremental annual revenue.

At the state level, GEO was awarded two Florida Department of Corrections management-only contracts in 2025, covering the 1,884-bed Graceville facility and the 985-bed Bay facility. Zoley said the contracts are valued at about $100 million in combined annual revenue and are scheduled to transition to GEO management on July 1, 2026.

In response to an analyst question, Zoley noted that only half of that $100 million is expected to be reflected in 2026 because the Florida facilities begin midyear. He also said revenue from 2025 wins is offset in part by the discontinuation of the Lawton, Oklahoma, facility and the Lea County, New Mexico, facility.

Potential facility sales to ICE remain under discussion

Zoley said ICE has paused a project involving the purchase and retrofitting of commercial warehouses as detention facilities while DHS evaluates how to proceed. He also said it has been reported that ICE is considering purchasing approximately 10 privately owned turnkey ICE processing centers.

Zoley acknowledged that GEO has been in discussions with ICE regarding the potential sale of multiple facilities, subject to agreement on price and GEO’s continued management under long-term support services contracts. He said there is no definitive agreement and no precise timeline, and he gave no assurance that any transactions will occur.

If sales take place, Zoley said proceeds would be used to reduce debt, continue stock repurchases and for other corporate purposes. In response to a question from Greg Gibas of Northland Securities, Zoley said the sale of the Lawton facility at roughly $130,000 per bed is a useful baseline, but he said ICE processing centers may warrant higher valuations because of added courtrooms, office space, urban locations and difficulty replicating facilities in certain states.

During the quarter, GEO repurchased approximately 3.6 million shares for about $50 million. Zoley said the company has now repurchased 8.5 million shares for approximately $141 million and has about $359 million remaining under its $500 million authorization.

GEO ended the quarter with approximately $80 million in cash, approximately $1.61 billion in total debt and total net debt of about $1.53 billion. Zoley said net leverage was below 3.2 times adjusted EBITDA.

About Geo Group NYSE: GEO

The GEO Group NYSE: GEO is a leading provider of correctional, detention and community reentry services to government agencies around the world. As a real estate investment trust, the company specializes in the design, financing, development and operation of secure facilities for adult and juvenile offenders, immigration detainees and individuals requiring mental health treatment or substance abuse programming. GEO's integrated service model also encompasses electronic monitoring, rehabilitative programming and post-release supervision aimed at reducing recidivism and enhancing public safety.

GEO's portfolio spans a range of facility types, including medium- and maximum-security correctional institutions, residential reentry centers, mental health treatment units and immigration detention centers.

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