Geo Group (NYSE:GEO) reported higher second-quarter results as revenue from contracts awarded in 2025 increased, while the company raised its full-year earnings and adjusted EBITDA outlook.
Revenue for the second quarter of 2026 rose 15% to approximately $732.1 million from $636.2 million a year earlier, Chief Financial Officer Shayn March said. Net income attributable to GEO operations increased 63% to approximately $47.5 million, or $0.36 per diluted share, compared with $29.1 million, or $0.21 per share, in the prior-year quarter. Adjusted EBITDA rose 20% to approximately $142 million.
ICE contracts and detention capacity
GEO said it entered into new contracts during 2025 to house U.S. Immigration and Customs Enforcement detainees at four facilities, representing approximately $280 million in annual revenue and roughly 6,000 beds. The company’s active ICE bed count is now approximately 27,000 beds, with current census across those facilities at about 24,000.
Zoley said ICE’s overall population was approximately 68,000 people across 225 locations, primarily short-term jail facilities. GEO experienced a 20% increase in ICE populations over the prior six weeks after passage of the Secure America Act restored baseline appropriations for ICE and Customs and Border Protection following a partial government shutdown, he said.
The company also announced two five-year ICE support-services contracts to activate previously idle facilities:
- The 1,188-bed Big Horn facility in Hudson, Colorado, is expected to generate approximately $85 million in annual revenue in its first full year of operations.
- The GEO-owned 1,320-bed Rivers facility in Winton, North Carolina, is expected to generate approximately $80 million in annual revenue in its first full year of operations.
ICE will reimburse GEO for capital expenditures required to reactivate the facilities and provide funding for startup expenses, Zoley said. The company expects both facilities to be activated by the end of 2026 and to reach normalized operations and earnings contribution in early 2027. Once activated, GEO’s ICE beds under contract are expected to total approximately 29,500.
GEO said it retains approximately 4,500 idle beds at five company-owned high-security facilities. At full capacity, those beds could produce approximately $250 million in combined incremental annual revenue, according to Zoley.
Transportation and electronic monitoring trends
Revenue growth also reflected expanded secure transportation services for ICE and the U.S. Marshals Service. GEO signed a five-year U.S. Marshals contract in 2025 covering 26 federal judicial districts in 14 states, while also expanding ground transportation services at seven ICE facilities.
The company expects its Big Horn and Rivers contracts to provide a combined approximately $20 million in additional annual transportation-services revenue after operations normalize in early 2027.
In electronic monitoring, GEO said its ISAP V contract continued to shift toward higher-priced monitoring technologies and more case-management services. The ISAP program had approximately 184,000 participants, including about 54,000 on GPS ankle monitors, up from 17,000 in early 2025. Approximately 116,000 participants were assigned to case-management services.
March said electronic monitoring and supervision revenue declined by less than $3 million, or approximately 3.5%, from a year earlier despite reduced pricing under the ISAP V contract. Zoley said the favorable mix shift could increase revenue and earnings even if total participation remains relatively stable.
The company received no second-quarter revenue from its skip-tracing contract, which Zoley attributed to the lapse in ICE appropriations during the government shutdown. He said GEO expects the contract to begin ramping during the second half of 2026 and indicated that an estimated $60 million annualized revenue opportunity remained reasonable.
Guidance increased despite Florida delay
GEO increased its 2026 guidance, projecting GAAP net income of $168 million to $175 million, or $1.27 to $1.32 per diluted share, on revenue of $2.95 billion to $3.05 billion. The company now expects adjusted EBITDA of $550 million to $560 million for the year.
The revised outlook excludes earnings from the Big Horn and Rivers activations, as well as two Florida managed-only contracts that have been rescheduled. The 1,884-bed Graceville facility and 985-bed Bay facility, representing about $100 million in combined annual revenue, are now expected to transition to GEO on July 1, 2027, rather than this year. Zoley said unresolved budget issues caused the delay.
GEO expects unreimbursed capital expenditures of $135 million to $145 million in 2026, followed by CapEx below $100 million in 2027. March said startup capital spending has been elevated as the company prepared for ICE-facility reactivations, while ICE reimbursement for reactivation CapEx is relatively new.
Capital allocation and potential asset sales
During the quarter, GEO repurchased approximately 1.6 million shares for about $37 million. Since the current repurchase program was authorized in August 2025, the company has bought back 10.1 million shares for approximately $177 million. It had about $323 million remaining under its $500 million authorization.
At quarter-end, GEO had approximately $55 million in cash and cash equivalents, $1.54 billion of total debt and about $300 million of available liquidity. Total net leverage was below three times adjusted EBITDA, March said.
Zoley also said GEO is engaged in discussions with ICE regarding potential sales of several turnkey processing centers, contingent on GEO retaining long-term support-services contracts to operate them. He said there was no definitive agreement or timeline and no assurance that transactions would occur.
If facilities are sold, GEO intends to use proceeds to reduce debt, continue share repurchases and support general corporate purposes. March added that debt agreements place restrictions on the initial use of any sale proceeds, but the company would seek to return capital to shareholders after satisfying those requirements.
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.
