The GEO Group Reports Third Quarter 2026 Results and Updates Full Year 2026 Guidance
-
3Q26 Revenues Increased 12% to
$761.1 Million -
3Q26 Net Income Attributable to GEO Operations of
$49.2 Million -
3Q26 Adjusted Net Income Increased 48% to
$51.8 Million -
3Q26 Adjusted EBITDA Increased 21% to
$145.3 Million -
Guidance for FY26 Revenues of
$2.975-$3.025 Billion -
Guidance for FY26 Net Income Attributable to GEO Operations Increased to
$726.3-$730.5 Million , Including Gain on Sale ofAdelanto, Calif. ICE Complex -
Guidance for FY26 Adjusted Net Income Increased to
$185-$190 Million , or$1.40-$1.44 Per Diluted Share -
Guidance for FY26 Adjusted EBITDA Increased to
$568-$573 Million
For the third quarter 2026, we reported total revenues of
Third quarter 2026 results reflect
We reported third quarter 2026 Adjusted EBITDA of
“We are pleased with the recent
Results for the First Nine Months of 2026
For the first nine months of 2026, we reported total revenues of
Results for the first nine months of 2026 reflect
We reported Adjusted EBITDA for the first nine months of 2026 of
Operational Highlights
We entered into a five-year support services contract, effective
We entered into a five-year support services contract, effective
The
Under all three contracts, ICE will reimburse GEO for the capital expenditures needed to reactivate these four facilities, as well as provide funding for start-up expenses during the activation period. We expect the activation of the Big Horn Facility and Rivers Facility to be completed by the end of 2026, with both facilities expected to achieve normalized operations and earnings contribution in early 2027, while the activation of the
We entered into a new 10-year management contract, effective
Facility Sales
On
In addition to these completed sales, we remain engaged in an active process for the sale of multiple other company-owned facilities to ICE, subject to mutual agreement on price and GEO’s continued management of those facilities under long-term support services contracts. At this time, there is no definitive agreement in place and no precise timeline for the closing of any additional transactions, and we can provide no assurance that any additional transactions will occur.
Financial Guidance
Today, we updated our financial guidance for the fourth quarter and full year 2026. For the fourth quarter 2026, we increased our Net Income Attributable to GEO Operations guidance to a range of
For the full year 2026, we increased Net Income Attributable to GEO Operations guidance to a range of
Balance Sheet
On
On
Our available liquidity is approximately
We are permitted to make unlimited restricted payments, including share repurchases, under our Credit Agreement, to the extent the Company’s total leverage ratio (as defined therein) calculated on a pro forma basis after giving effect to such restricted payment would be equal to or less than 2.25 to 1.00 and no default exists thereunder.
Additionally, under the Indenture governing the 2031 Senior Unsecured Notes, we are permitted to make unlimited restricted payments, including share repurchases, to the extent the Company’s consolidated total leverage ratio (as defined therein) calculated on a pro forma basis after giving effect to such restricted payment would be equal to or less than 2.00 to 1.00 and no default exists thereunder.
Share Repurchase Program
On
As of
Repurchases of GEO’s outstanding common stock will be made in accordance with applicable securities laws and may be made at our senior management’s discretion from time to time in the open market, by block purchase, through privately negotiated transactions, pursuant to a trading plan, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The authorization for the share repurchase program may be extended, increased, decreased, suspended or terminated by our Board of Directors in its discretion at any time.
Repurchases of our common stock (and the timing thereof) will depend upon market conditions, regulatory requirements, the Company's existing obligations, including our Credit Agreement, other corporate liquidity requirements and priorities and other factors as may be considered in the Company's sole discretion. The authorization for the share repurchase program does not obligate GEO to purchase any particular amount of the Company’s common stock.
Conference Call Information
We have scheduled a conference call and webcast for today at
About The GEO Group
The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 97 facilities totaling approximately 76,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 20,000 employees.
Reconciliation Tables and Supplemental Information
GEO has made available Supplemental Information which contains reconciliation tables of Net Income Attributable to GEO Operations to Adjusted Net Income, and Net Income to EBITDA and Adjusted EBITDA, along with supplemental financial and operational information on GEO’s business and other important operating metrics. The reconciliation tables are also presented herein. Please see the section below titled “Note to Reconciliation Tables and Supplemental Disclosure - Important Information on GEO’s Non-GAAP Financial Measures” for information on how GEO defines these supplemental Non-GAAP financial measures and reconciles them to the most directly comparable GAAP measures. GEO’s Reconciliation Tables can be found herein and in GEO’s Supplemental Information available on GEO’s investor webpage at investors.geogroup.com.
Note to Reconciliation Tables and Supplemental Disclosure –
Important Information on GEO's Non-GAAP Financial Measures
Adjusted Net Income, EBITDA, and Adjusted EBITDA are non-GAAP financial measures that are presented as supplemental disclosures. GEO has presented herein certain forward-looking statements about GEO's future financial performance that include non-GAAP financial measures, including Net Debt, Net Leverage, and Adjusted EBITDA. The determination of the amounts that are included or excluded from these non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period.
While we have provided a high-level reconciliation for the guidance ranges for full year 2026, we are unable to present a more detailed quantitative reconciliation of the forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because management cannot reliably predict all of the necessary components of such GAAP measures. The quantitative reconciliation of the forward-looking non-GAAP financial measures will be provided for completed annual and quarterly periods, as applicable, calculated in a consistent manner with the quantitative reconciliation of non-GAAP financial measures previously reported for completed annual and quarterly periods.
Net Debt is defined as gross principal debt less cash on hand. Net Leverage is defined as Net Debt divided by Adjusted EBITDA.
EBITDA is defined as net income adjusted by adding provisions for income tax, interest expense, net of interest income, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for (gain)/loss on asset divestitures/impairment, pre-tax, net loss attributable to noncontrolling interests, stock-based compensation expenses, pre-tax, non-cash contingent liability and litigation settlement costs, pre-tax, start-up expenses, pre-tax, transaction fees, pre-tax, employee restructuring expenses, pre-tax, close-out expenses, pre-tax, other non-cash revenue and expenses, pre-tax, and certain other adjustments as defined from time to time.
Given the nature of our business as a real estate owner and support services provider, we believe that EBITDA and Adjusted EBITDA are helpful to investors as measures of our operational performance because they provide an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures, and to fund other cash needs or reinvest cash into our business.
We believe that by removing the impact of our asset base (primarily depreciation and amortization) and excluding certain non-cash charges, amounts spent on interest and taxes, and certain other charges that are highly variable from year to year, EBITDA and Adjusted EBITDA provide our investors with performance measures that reflect the impact to operations from trends in occupancy rates, per diem rates and operating costs, providing a perspective not immediately apparent from net income.
The adjustments we make to derive the non-GAAP measures of EBITDA and Adjusted EBITDA exclude items which may cause short-term fluctuations in income from continuing operations and which we do not consider to be the fundamental attributes or primary drivers of our business plan and they do not affect our overall long-term operating performance. EBITDA and Adjusted EBITDA provide disclosure on the same basis as that used by our management and provide consistency in our financial reporting, facilitate internal and external comparisons of our historical operating performance and our business units and provide continuity to investors for comparability purposes.
Adjusted Net Income is defined as net income attributable to GEO operations adjusted for certain items which by their nature are not comparable from period to period or that tend to obscure GEO’s actual operating performance, including for the periods presented (gain)/loss on asset divestitures/impairment, pre-tax, loss on extinguishment of debt, pre-tax, non-cash contingent liability and litigation and settlement costs, pre-tax, start-up expenses, pre-tax, transaction fees, pre-tax, employee restructuring expenses, pre-tax, close-out expenses, pre-tax, and the tax effect of adjustments to net income attributable to GEO operations.
Safe-Harbor Statement
This press release contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially and adversely affect actual results, including statements regarding GEO’s financial guidance for the fourth quarter and full year of 2026, GEO’s belief that its stock continues to be undervalued, the $1.25 billion share repurchase program authorized by GEO’s Board of Directors and GEO’s capital allocation priorities, the anticipated timing and annualized revenues related to the activation of certain facilities and new and amended contracts, GEO’s continued engagement in an active process for the sale of multiple company-owned facilities, GEO’s ability to capture additional growth opportunities, and the Company’s efforts to strengthen its capital structure and enhance shareholder value through capital returns. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” or “continue” or the negative of such words and similar expressions. Risks and uncertainties that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) GEO’s ability to meet its financial guidance for the fourth quarter and full year of 2026 given the various risks to which its business is exposed; (2) GEO’s ability to execute on the $1.25 billion share repurchase program authorized by GEO’s Board of Directors on the timeline it expects; (3) GEO’s ability to deleverage and repay, refinance or otherwise address its debt maturities in an amount and on terms commercially acceptable to GEO, and on the timeline it expects or at all; (4) GEO’s ability to identify and successfully complete any potential sales of company-owned assets and businesses or potential acquisitions of assets or businesses on commercially advantageous terms on a timely basis, or at all; (5) changes in federal and state government policy, orders, directives, legislation and regulations that affect public-private partnerships with respect to secure, correctional and detention facilities, processing centers and reentry centers; (6) changes in federal immigration policy; (7) public and political opposition to the use of public-private partnerships with respect to secure correctional and detention facilities, processing centers and reentry centers; (8) the impact of any future global pandemic on GEO and GEO's ability to mitigate the risks associated with such pandemic; (9) GEO’s ability to sustain or improve company-wide occupancy rates at its facilities; (10) fluctuations in GEO’s operating results, including as a result of contract activations, contract terminations, contract renegotiations, changes in occupancy levels and increases in GEO’s operating costs; (11) general economic and market conditions, including changes to governmental budgets and their impact on new contract terms, contract renewals, renegotiations, per diem rates, fixed payment provisions, and occupancy levels; (12) GEO’s ability to address inflationary pressures related to labor-related expenses and other operating costs; (13) GEO’s ability to timely open facilities as planned, profitably manage such facilities and successfully integrate such facilities into GEO’s operations without substantial costs; (14) GEO’s ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (15) risks associated with GEO’s ability to control operating costs associated with contract start-ups; (16) GEO’s ability to successfully pursue growth opportunities and continue to create shareholder value; (17) GEO’s ability to obtain financing or access the capital markets in the future on acceptable terms or at all; (18) any adverse impact on GEO’s financial results caused by any past or future federal government shutdown; (19) risks associated with the U.S. Supreme Court agreeing to hear GEO’s appeal in the Nwauzor case and GEO’s ability to prevail on the merits; and (20) other factors contained in GEO’s Securities and Exchange Commission periodic filings, including its Form 10-K, 10-Q and 8-K reports, many of which are difficult to predict and outside of GEO’s control.
Third quarter and first nine months 2026 financial tables to follow:
|
Condensed Consolidated Balance Sheets* (Unaudited) |
||||||
|
|
||||||
| As of | As of | |||||
| (unaudited) | (unaudited) | |||||
| ASSETS | ||||||
| Cash and cash equivalents | $ |
215,955 |
$ |
68,995 |
||
| Restricted cash and cash equivalents |
5,297 |
2,998 |
||||
| Accounts receivable, less allowance for doubtful accounts |
544,411 |
593,463 |
||||
| Prepaid expenses and other current assets |
40,792 |
53,073 |
||||
| Total current assets | $ |
806,455 |
$ |
718,529 |
||
| Restricted Cash and Investments |
192,008 |
179,366 |
||||
| Property and Equipment, Net |
1,713,918 |
1,884,198 |
||||
| Operating Lease Right-of-Use Assets, Net |
122,014 |
72,294 |
||||
| Assets Held for Sale |
146,798 |
- |
||||
| Deferred Income Tax Assets |
9,396 |
9,396 |
||||
| Intangible Assets, Net (including goodwill) |
867,916 |
873,360 |
||||
| Other Non-Current Assets |
126,122 |
106,479 |
||||
| Total Assets | $ |
3,984,627 |
$ |
3,843,622 |
||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Accounts payable | $ |
73,398 |
$ |
58,727 |
||
| Accrued payroll and related taxes |
117,237 |
82,086 |
||||
| Accrued expenses and other current liabilities |
259,202 |
197,530 |
||||
| Operating lease liabilities, current portion |
21,132 |
17,193 |
||||
| Current portion of finance lease obligations and long-term debt |
1,369 |
1,355 |
||||
| Total current liabilities | $ |
472,338 |
$ |
356,891 |
||
| Deferred Income Tax Liabilities |
99,689 |
99,689 |
||||
| Other Non-Current Liabilities |
208,838 |
176,083 |
||||
| Operating Lease Liabilities |
103,828 |
57,557 |
||||
| Long-Term Debt |
1,529,252 |
1,649,268 |
||||
| Total Shareholders' Equity |
1,570,682 |
1,504,134 |
||||
| Total Liabilities and Shareholders' Equity | $ |
3,984,627 |
$ |
3,843,622 |
||
| * All figures in '000s | ||||||
|
Condensed Consolidated Statements of Operations* (Unaudited) |
||||||||||||
|
|
||||||||||||
| Q3 2026 | Q3 2025 | YTD 2026 | YTD 2025 | |||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Revenues | $ |
761,062 |
|
$ |
682,341 |
|
$ |
2,198,347 |
|
$ |
1,923,854 |
|
| Operating expenses |
552,369 |
|
508,881 |
|
1,604,581 |
|
1,438,574 |
|
||||
| Depreciation and amortization |
34,182 |
|
33,039 |
|
102,208 |
|
97,907 |
|
||||
| General and administrative expenses |
72,122 |
|
62,121 |
|
198,167 |
|
176,116 |
|
||||
| Contingent Litigation Reserve |
- |
|
37,600 |
|
- |
|
37,600 |
|
||||
| Operating income |
102,389 |
|
40,700 |
|
293,391 |
|
173,657 |
|
||||
| Interest income |
2,051 |
|
2,558 |
|
6,951 |
|
7,021 |
|
||||
| Interest expense |
(38,143 |
) |
(38,234 |
) |
(115,000 |
) |
(122,582 |
) |
||||
| Loss on extinguishment of debt |
- |
|
(7,851 |
) |
0 |
|
(8,446 |
) |
||||
| Other Income |
- |
|
0 |
|
0 |
|
5,514 |
|
||||
| Gain/(Loss) on asset divestitures/impairment |
- |
|
232,381 |
|
(673 |
) |
232,381 |
|
||||
| Income before income taxes and equity in earnings of affiliates |
66,297 |
|
229,554 |
|
184,669 |
|
287,545 |
|
||||
| Provision for income taxes |
17,910 |
|
56,391 |
|
51,814 |
|
68,771 |
|
||||
| Equity in earnings of affiliates, net of income tax provision |
816 |
|
759 |
|
2,114 |
|
3,764 |
|
||||
| Net income |
49,203 |
|
173,922 |
|
134,969 |
|
222,538 |
|
||||
| Less: Net loss attributable to noncontrolling interests |
11 |
|
18 |
|
82 |
|
68 |
|
||||
| Net Income Attributable to |
$ |
49,214 |
|
$ |
173,940 |
|
$ |
135,051 |
|
$ |
222,606 |
|
| Weighted Average Common Shares Outstanding: | ||||||||||||
| Basic |
129,969 |
|
138,283 |
|
131,052 |
|
137,992 |
|
||||
| Diluted |
132,002 |
|
139,992 |
|
132,691 |
|
140,509 |
|
||||
| Net Income per Common Share Attributable to |
||||||||||||
| Basic: | ||||||||||||
| Net income per share — basic | $ |
0.38 |
|
$ |
1.26 |
|
$ |
1.03 |
|
$ |
1.61 |
|
| Diluted: | ||||||||||||
| Net income per share — diluted | $ |
0.37 |
|
$ |
1.24 |
|
$ |
1.02 |
|
$ |
1.58 |
|
| * All figures in '000s, except per share data | ||||||||||||
|
Reconciliation of Net Income to EBITDA and Adjusted EBITDA, and Net Income Attributable to GEO Operations to Adjusted Net Income* (Unaudited) |
|||||||||||||||||||
|
|
|||||||||||||||||||
| Q3 2026 | Q3 2025 | YTD 2026 | YTD 2025 | ||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||
| Net income | $ |
|
49,203 |
|
$ |
|
173,922 |
|
$ |
|
134,969 |
|
$ |
|
222,538 |
|
|||
| Add: | |||||||||||||||||||
| Income tax provision ** |
|
18,209 |
|
|
56,610 |
|
|
52,558 |
|
|
69,389 |
|
|||||||
| Interest expense, net of interest income *** |
|
36,092 |
|
|
43,527 |
|
|
108,049 |
|
|
124,007 |
|
|||||||
| Depreciation and amortization |
|
34,182 |
|
|
33,039 |
|
|
102,208 |
|
|
97,907 |
|
|||||||
| EBITDA | $ |
|
137,686 |
|
$ |
|
307,098 |
|
$ |
|
397,784 |
|
$ |
|
513,841 |
|
|||
| Add (Subtract): | |||||||||||||||||||
| (Gain)/Loss on asset divestitures/impairment, pre-tax |
|
- |
|
|
(232,381 |
) |
|
673 |
|
|
(232,381 |
) |
|||||||
| Net loss attributable to noncontrolling interests |
|
11 |
|
|
18 |
|
|
82 |
|
|
68 |
|
|||||||
| Stock based compensation expenses, pre-tax |
|
5,002 |
|
|
7,627 |
|
|
17,691 |
|
|
19,621 |
|
|||||||
| Non-cash contingent liability and litigation and settlement costs, pre-tax |
|
410 |
|
|
37,661 |
|
|
410 |
|
|
38,192 |
|
|||||||
| Start-up expenses, pre-tax |
|
1,208 |
|
|
400 |
|
|
1,717 |
|
|
400 |
|
|||||||
| Transaction fees, pre-tax |
|
123 |
|
|
21 |
|
|
445 |
|
|
76 |
|
|||||||
| Employee restructuring expenses, pre-tax |
|
1,250 |
|
|
41 |
|
|
1,842 |
|
|
373 |
|
|||||||
| Close-out expenses, pre-tax |
|
459 |
|
|
748 |
|
|
478 |
|
|
1,424 |
|
|||||||
| Other non-cash revenue & expenses, pre-tax |
|
(811 |
) |
|
(1,140 |
) |
|
(2,374 |
) |
|
(3,159 |
) |
|||||||
| Adjusted EBITDA | $ |
|
145,338 |
|
$ |
|
120,093 |
|
$ |
|
418,748 |
|
$ |
|
338,455 |
|
|||
| Net Income Attributable to |
$ |
|
49,214 |
|
$ |
|
173,940 |
|
$ |
|
135,051 |
|
$ |
|
222,606 |
|
|||
| Add (Subtract): | |||||||||||||||||||
| (Gain)/Loss on asset divestitures/impairment, pre-tax |
|
- |
|
|
(232,381 |
) |
|
673 |
|
|
(232,381 |
) |
|||||||
| Loss on extinguishment of debt, pre-tax |
|
- |
|
|
7,851 |
|
|
- |
|
|
8,446 |
|
|||||||
| Non-cash contingent liability and litigation and settlement costs, pre-tax |
|
410 |
|
|
37,661 |
|
|
410 |
|
|
38,192 |
|
|||||||
| Start-up expenses, pre-tax |
|
1,208 |
|
|
400 |
|
|
1,717 |
|
|
400 |
|
|||||||
| Transaction fees, pre-tax |
|
123 |
|
|
21 |
|
|
445 |
|
|
76 |
|
|||||||
| Employee restructuring expenses, pre-tax |
|
1,250 |
|
|
41 |
|
|
1,842 |
|
|
373 |
|
|||||||
| Close-out expenses, pre-tax |
|
459 |
|
|
748 |
|
|
478 |
|
|
1,424 |
|
|||||||
| Tax effect of adjustment to net income attributable to GEO Operations (1) |
|
(867 |
) |
|
46,689 |
|
|
(1,399 |
) |
|
46,138 |
|
|||||||
| Adjusted Net Income | $ |
|
51,797 |
|
$ |
|
34,970 |
|
$ |
|
139,217 |
|
$ |
|
85,274 |
|
|||
| Weighted average common shares outstanding - Diluted |
|
132,002 |
|
|
139,992 |
|
|
132,691 |
|
|
140,509 |
|
|||||||
| Adjusted Net Income per Diluted Share |
$ |
0.39 |
|
$ |
0.25 |
|
$ |
1.05 |
|
$ |
0.61 |
|
|||||||
| * All figures in '000s. | |||||||||||||||||||
| ** Includes income tax provision on equity in earnings of affiliates. | |||||||||||||||||||
| *** Includes loss on extinguishment of debt. | |||||||||||||||||||
| (1) Tax adjustment related to (gain)/loss on asset divestitures/impairment, loss on extinguishment of debt, non-cash contingent liability and litigation and settlement costs, start-up expenses, transaction fees, employee restructuring expenses, and close-out expenses. | |||||||||||||||||||
|
2026 Outlook/Reconciliation (In thousands, except per share data) (Unaudited) |
|||||||||
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||
| FY 2026 | |||||||||
| Net Income Attributable to GEO |
$ |
726,250 |
|
to |
$ |
730,500 |
|
||
| (Gain)/Loss on Asset Sale, pre-tax |
|
(765,200 |
) |
|
(765,200 |
) |
|||
| Net Interest Expense |
|
128,050 |
|
|
128,050 |
|
|||
| Loss on Extinguishment of Debt, pre-tax |
|
37,600 |
|
|
37,600 |
|
|||
| Tax effect of Adjustments |
|
182,000 |
|
|
182,000 |
|
|||
| Income Taxes | |||||||||
| (including income tax provision on equity in earnings of affiliates) |
|
98,000 |
|
|
98,750 |
|
|||
| Depreciation and Amortization |
|
136,000 |
|
|
136,000 |
|
|||
| Non-Cash Stock Based Compensation |
|
23,000 |
|
|
23,000 |
|
|||
| Other Non-Cash |
|
2,300 |
|
|
2,300 |
|
|||
| Adjusted EBITDA |
$ |
568,000 |
|
to |
$ |
573,000 |
|
||
| Net Income Attributable to GEO Per Diluted Share |
$ |
5.49 |
|
to |
$ |
5.53 |
|
||
| Adjusted Net Income Per Diluted Share |
$ |
1.40 |
|
$ |
1.44 |
|
|||
| Weighted Average Common Shares Outstanding-Diluted |
|
132,200 |
|
to |
|
132,200 |
|
||
| CAPEX | |||||||||
| Growth |
|
23,500 |
|
to |
|
25,000 |
|
||
| Technology |
|
34,000 |
|
|
36,000 |
|
|||
| Facility Maintenance |
|
82,500 |
|
|
89,000 |
|
|||
| Capital Expenditures |
|
140,000 |
|
to |
|
150,000 |
|
||
| Total Debt, Net |
$ |
550,000 |
|
$ |
525,000 |
|
|||
| Total Leverage, Net |
|
0.96 |
|
|
0.92 |
|
|||
|
Note: The above outlook does not include the impact of any potential one-time legal settlements |
|||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20261104896862/en/
Executive Vice President, Corporate Relations
Source: