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CoreCivic, Inc. (CXW)·Q1 2025 Earnings Summary

Executive Summary

  • CoreCivic delivered a stronger-than-expected quarter: revenue $488.6M and diluted EPS $0.23; management noted beats versus average analyst estimates of $0.10 on EPS and ~$10M on EBITDA, supported by higher occupancy (77.0%) and cost controls .
  • Consensus (S&P Global) for Q1 2025 was $478.5M revenue and $0.124 EPS; actuals were $488.6M and $0.23, marking clear beats driven by ICE and state partner volumes and payroll tax credits* .
  • The company reactivated three facilities tied to ICE (Dilley, California City, and Midwest Regional Reception Center) and raised FY2025 guidance materially (EPS $0.83–$0.92, EBITDA $331–$339M) on actual Q1 performance and activation trajectory .
  • Capital deployment accelerated: $37.9M used to repurchase 1.9M shares; leverage at 2.5x net debt/TTM Adjusted EBITDA provides capacity to fund activations and potential M&A .

What Went Well and What Went Wrong

  • What Went Well

    • Occupancy increased to 77.0% (from 75.2% YoY), underpinning margin stability and upside versus internal plan .
    • Reactivations advancing: Dilley resumed operations (target ~$180M annual revenue at full activation) and letter contracts initiated at California City and Midwest; “never in our 42-year history have we had so much activity and demand” .
    • State business strength: state revenue up 5.2% YoY; Montana expansions at Tallahatchie and Saguaro contributed to volume and rate benefits .

  • What Went Wrong

    • Year-over-year adjusted performance impacted by contract losses: Dilley (ICE) termination in Aug-2024 and California City lease expiration (Mar-2024) reduced YoY contribution; ICE revenue fell to $133.2M from $153.8M YoY .
    • Property segment revenue declined on California City lease expiration (Q1 2025: $4.642M vs $13.039M in Q1 2024), pressuring overall reported EBITDA versus prior-year adjusted baseline .
    • Guidance excludes potential long-term ICE contracts at Midwest and California City; activation start-up costs could temporarily offset revenue until occupancy normalizes .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$500.7 $479.3 $488.6
Diluted EPS ($)$0.08 $0.17 $0.23
EBITDA ($USD Millions)$62.8 $75.7 $81.0
Operating Margin (Safety + Community) (%)23.7 23.6 23.6

Vs. Wall Street Consensus (S&P Global):

MetricConsensus (Q1 2025)Actual (Q1 2025)Surprise
Revenue ($USD Millions)$478.5*$488.6 +$10.1*
Diluted EPS ($)$0.124*$0.23 +$0.106*

Values marked with * retrieved from S&P Global.

Segment revenue mix:

Segment Revenue ($USD Millions)Q1 2024Q1 2025
Safety$457.7 $454.2
Community$29.9 $29.7
Properties$13.0 $4.6
Other$0.0 $0.1
Total$500.7 $488.6

KPIs:

KPIQ1 2024Q1 2025
Occupancy (%)75.2 77.0
ICE Revenue ($USD Millions)$153.8 $133.2
FFO per diluted share ($)$0.30 $0.45
Net debt / TTM Adjusted EBITDA (x)2.3 (Q4 2024) 2.5
Shares repurchased (mm)—1.9

Guidance Changes

MetricPeriodPrevious Guidance (Feb 10, 2025)Current Guidance (May 7, 2025)Change
Net Income ($USD Millions)FY 2025$53.5–$67.5 $91.3–$101.3 Raised
Diluted EPS ($)FY 2025$0.48–$0.61 $0.83–$0.92 Raised
FFO per diluted share ($)FY 2025$1.37–$1.50 $1.72–$1.82 Raised
EBITDA ($USD Millions)FY 2025$281–$293 $331–$339 Raised
Maintenance Capex ($USD Millions)FY 2025$60–$65 $60–$65 Maintained
Other Capex ($USD Millions)FY 2025$6–$7 $9–$10 Raised
Activation/Transportation Capex ($USD Millions)FY 2025$40–$45 $65–$70 Raised
G&A ($USD Millions)FY 2025—$145–$150 Provided
Tax rate (normalized, %)FY 2025—25%–30% Provided

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
ICE bed demand & federal reconciliationRFIs/RFPs across AORs; bid activity increasing Management expects reconciliation-driven funding; House Judiciary proposal suggests scaled detention spend Accelerating demand; funding visibility improving
Facility activations (Dilley, Cal City, Midwest)South Texas (Dilley) deactivated; proposal up to 28k beds; 13k idle facilities Dilley reactivated (31 days to first intake), letter contracts underway; target full activation by early Sep Rapid activation; execution exceeding plan
Transportation capacity buildNeed anticipated for transport services 120 buses/vans purchased or in production to support ICE Scaling logistics for higher volumes
Staffing normalization & operating leverageCosts down; margins lift with occupancy Labor inflation back to normal; staffing near pre-pandemic; supports quick ramp Structural improvement sustained
State per diems & contractsWyoming/Montana additions; per diem improvements State revenue +5.2% YoY; per diem increases expected mid-year Constructive pricing/volume backdrop
ATD/ISAP competitionRFI indicates openness to more vendors/tech Teaming partner device scaling ready; sees potential dual-sourcing Increased competition/participation likely

Management Commentary

  • “Never in our 42-year company history have we had so much activity and demand for our services as we are seeing right now.” — CEO Damon Hininger .
  • “EBITDA exceeded plan, coming in at $81 million. Both metrics were up meaningfully from the fourth quarter of 2024…” — CEO .
  • “We began receiving an initial ICE population at the Dilley facility just 31 days after amending the contract.” — CEO .
  • “Adjusted EBITDA was $81 million, exceeding average analyst estimates by $10 million.” — CFO David Garfinkle .
  • “We repurchased 1.9 million shares at an aggregate cost of $37.9 million… leverage at 2.5x.” — President/COO Patrick Swindle .

Q&A Highlights

  • Letter agreements and timing: draft long-term contracts received; management expects resolution “days and weeks, not months,” potentially before budget reconciliation .
  • Incremental EBITDA potential: activating all idle facilities could add ~$200–$225M EBITDA; broader proposals cover ~28k beds .
  • Transportation revenue: expanded fleet of ~120 buses/vans; revenue integration likely via per diem rather than separate contracts .
  • ATD/ISAP posture: CoreCivic prepared to scale monitoring via teaming partner; sees rationale for dual sourcing amid program changes .
  • State contracts and per diems: per diem increases anticipated around July aligned with annual wage increases; upside possible .

Estimates Context

  • Q1 2025 beat versus S&P Global consensus: revenue $488.6M vs $478.5M*, EPS $0.23 vs $0.124*; management also cited ~$10M EBITDA beat versus average estimates .
  • With FY2025 guidance raised across EPS, FFO/share, and EBITDA, Street models likely need to reflect Dilley ramp (full-facility economics expected from September) and higher steady-state occupancy assumptions .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Guidance inflection: FY2025 EPS up ~70% at the midpoint versus initial guide, driven by Dilley activation and stronger occupancy — a likely positive revision catalyst .
  • Activation execution: rapid ramp (Dilley intake in 31 days) indicates operational readiness for further ICE awards; letter contracts de-risk start-up expenses .
  • Balanced capital allocation: buybacks ($37.9M) alongside leverage at 2.5x provide flexibility to fund activations and pursue tuck-in M&A if returns exceed repurchases .
  • State revenue resiliency: +5.2% YoY with potential mid-year per diem increases supports margin stability beyond federal demand cycles .
  • Logistics scaling: expanded transport fleet (~120 vehicles) positions CoreCivic to support ICE’s broader operational requirements — ancillary revenue tailwind .
  • Risk management: guidance excludes potential long-term contracts at Midwest and California City; start-up costs could temporarily pressure margins until facilities reach stabilized occupancy .
  • Policy backdrop: reconciliation outcomes and evolving detention priorities (including ATD/ISAP rebid) are near-term catalysts for volumes and pricing .

Additional Supporting Details

  • ICE and state contracting updates: added ICE capacity via modifications at Northeast Ohio, Nevada Southern, Cimarron, and Tallahatchie; resumed operations at Dilley under amended IGSA .
  • FY2025 capex plan: maintenance $60–$65M; other capex $9–$10M; activation/transport $65–$70M (up $25M to expand readiness across more idle facilities) .
  • Segment shift: California City moves from Properties to Safety in Q2 2025 following activation (letter contract) — Property revenue decline in Q1 reflects lease expiration .