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CoreCivic, Inc. (CXW)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue of $538.2M (+9.8% y/y) and Adjusted EPS of $0.36; Adjusted EBITDA of $103.3M. Results were driven by higher federal and state populations, higher per diem rates, and $8.3M ERCs ($0.08/share) .
  • Material beats versus S&P Global consensus: EPS $0.36 vs $0.208*, revenue $538.2M vs $499.0M*, and Adjusted EBITDA beat by ~$21M per management .
  • FY25 guidance raised: Adjusted EBITDA to $365–$371M (from $331–$339M); Adjusted EPS to $1.07–$1.14 (from $0.83–$0.92); FFO/share to $1.99–$2.07 (from $1.72–$1.82) .
  • Catalysts: record ICE detention populations (57,861 nationwide at June), historic multi‑year federal funding under the “One Big Beautiful Bill Act,” and facility activations plus the $67M Farmville acquisition (≈$40M annual revenue) .

Note: Values marked with * are from S&P Global; “Values retrieved from S&P Global”.

What Went Well and What Went Wrong

What Went Well

  • ICE revenue rose 17.2% y/y to $176.9M; state revenue rose 5.2% y/y; USMS revenue rose 2.7% y/y, reflecting broad demand strength .
  • Occupancy improved to 76.8% (Safety & Community), with average daily population up to 54,026; apples‑to‑apples occupancy excluding added California City capacity would have been 79.7% .
  • Strategic capital deployment: repurchased 2.0M shares for $43.2M in Q2 (total 18.5M since program inception); leverage at 2.3x net debt/Adj. EBITDA with $346.9M liquidity .
  • CEO quote: “Increasing demand…particularly from ICE…we are increasing our 2025 financial guidance.” .

What Went Wrong

  • Dilley reactivation timing created near‑term drag: −$0.07/share vs Q2’24 as facility ramps to full fixed monthly payment by end of Q3 .
  • Midwest Regional Reception Center intake delayed by local litigation (Leavenworth SUP); ongoing appeal introduces timing uncertainty and near‑term headwinds in Q3 .
  • Q3 bridge: absence of Q2 ERCs and ramp costs under letter contracts expected to negatively impact Q3 by ≈$0.06/share (offset in Q4 with full Dilley and California City long‑term contract) .

Financial Results

Headline financials vs prior periods

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$490.1 $488.6 $538.2
Diluted EPS ($)$0.17 $0.23 $0.35
Adjusted Diluted EPS ($)$0.20 $0.23 $0.36
EBITDA ($USD Millions)$79.8 $81.0 $101.8
Adjusted EBITDA ($USD Millions)$83.9 $89.5 $103.3

Segment revenue breakdown

Segment Revenue ($USD Millions)Q2 2024Q2 2025
Safety$455.4 $503.3
Community$30.3 $30.1
Properties$4.4 $4.7
Other$0.02 $0.00
Total$490.1 $538.2

Margins (Safety & Community combined)

MarginQ2 2024Q2 2025 ReportedQ2 2025 ex-ERC
Operating Margin (%)23.7% 26.2% 24.6%

KPIs

KPIQ2 2024Q2 2025
Average Daily Residential Population51,541 54,026
Occupancy (Safety & Community)74.3% 76.8%
Occupancy (ex. added California City capacity)N/A79.7%
ICE Revenue$151.0M $176.9M
USMS Revenue YoY change—+2.7%
Share Repurchases (Q2)—2.0M shares; $43.2M
Net Debt/Adjusted EBITDA (TTM)—2.3x
Liquidity (Cash + Revolver availability)—$346.9M ($130.5M cash; $216.4M revolver)

Guidance Changes

MetricPeriodPrevious Guidance (May 7, 2025)Current Guidance (Aug 6, 2025)Change
Net income ($M)FY 2025$91.3–$101.3 $116.4–$124.4 Raised
Adjusted Net Income ($M)FY 2025$91.3–$101.3 $115.5–$123.5 Raised
Diluted EPS ($)FY 2025$0.83–$0.92 $1.08–$1.15 Raised
Adjusted Diluted EPS ($)FY 2025$0.83–$0.92 $1.07–$1.14 Raised
FFO per diluted share ($)FY 2025$1.72–$1.82 $1.98–$2.06 Raised
Normalized FFO/share ($)FY 2025$1.72–$1.82 $1.99–$2.07 Raised
EBITDA ($M)FY 2025$331.0–$339.0 $366.3–$372.3 Raised
Adjusted EBITDA ($M)FY 2025$331.0–$339.0 $365.0–$371.0 Raised

Additional guidance parameters:

  • 2025 G&A ≈ $160M (ex-M&A) ; normalized effective tax rate 25–30% .
  • 2025 maintenance capex: real estate $29–$31M; other/IT $31–$34M; other capex $9–$10M; plus $70–$75M for potential idle facility activations and transportation vehicles .
  • Q3 bridge: −$0.06/share headwind from ramp costs; Q4 run-rate benefits from full Dilley and California City long-term contract .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Federal funding, policy, and ICE demandPreparing for increased secure bed needs; policy changes expected to drive demand “One Big Beautiful Bill Act” appropriates $75B to ICE (multi‑year, through 2029), with ~$45B for detention capacity; ICE detention population at record 57,861 Accelerating
Facility activations (Dilley, California City, Midwest)Letters signed (Midwest, California City) and Dilley amendment; initial intake at Dilley began in early April Dilley ramping to full by end Q3; California City intake expected in Q3 with long‑term contract targeted by end Q3; Midwest delayed by SUP litigation Execution, with legal delay at Midwest
Occupancy trajectoryQ4’24 occupancy 75.5%; Q1’25 occupancy 77.0% Q2’25 occupancy 76.8%; apples‑to‑apples 79.7% Uptrend continuing
Capital allocationShare repurchases resumed; leverage focus Repurchased 2.0M shares; leverage 2.3x; liquidity $346.9M; $67M Farmville acquisition (~$40M annual revenue) Active buybacks; tuck‑in M&A
Regulatory/legalTransition in DHS/DOJ noted Third Circuit upholds decision enabling private immigration detention in NJ (Elizabeth) Supportive legal backdrop
Transportation/logisticsNot detailedTransCor expansion (vehicle capex >5x typical) to support interior enforcement and intake logistics Scaling capacity

Management Commentary

  • CEO: “Increasing demand for the solutions we provide, particularly from ICE…nationwide detention populations under ICE custody reached an all‑time high…we are increasing our 2025 financial guidance.” .
  • CFO: “Adjusted EBITDA…$103.3M…exceeding average analyst estimates by $21.0M…driven by higher federal and state populations…and ERCs amounting to $0.08 per share.” .
  • COO: “We made substantial progress in re‑activating three previously idled facilities…expect to begin receiving detainees at our California City Immigration Processing Center in the near term…advanced negotiations to activate a fourth idle facility.” .
  • CFO: Q3/Q4 cadence: “For modeling…Q3…negatively impacted by approximately $0.06 per share…offset in Q4 by…full Dilley…and longer term contract at California City.” .

Q&A Highlights

  • Alternatives (soft‑sided/international/military base) vs private sector: ICE pursues “all of the above,” but private sector beds seen as more secure, cost‑effective, and longer‑term; near‑term priority is detention capacity .
  • Electronic monitoring (ISAP) opportunity: Detention remains the priority; CXW capable and interested if RFP emphasizes active monitoring; competitive competencies via Community segment .
  • Midwest legal update: Location ideal; management confident in resolution, but timing remains uncertain .
  • Occupancy runway: Potential to reach mid‑80s as activations complete, likely in 2026; low‑80s possible by year‑end depending on contracts .
  • Transportation capabilities: TransCor network expanded materially; positioning assets for interior arrests, and mass moves for state partners; vehicle capex >5x typical year .

Estimates Context

  • Q2 2025 beats:
    • Primary EPS: Actual $0.36 vs Consensus $0.208* .
    • Revenue: Actual $538.2M vs Consensus $499.0M* .
    • Adjusted EBITDA: Actual $103.3M vs consensus proxy (EBITDA) ~$82.2M*; mgmt cited ~$21M beat on Adjusted EBITDA .
  • Q1 2025 beats:
    • Primary EPS: Actual $0.23 vs Consensus $0.124* .
    • Revenue: Actual $488.6M vs Consensus $478.5M* .
MetricQ1 2025 ConsensusQ1 2025 ActualQ2 2025 ConsensusQ2 2025 Actual
Primary EPS ($)0.124*0.23 0.208*0.36
Revenue ($USD Millions)478.5*488.6 499.0*538.2
EBITDA ($USD Millions)70.9*81.0 82.2*101.8

Note: Values marked with * are from S&P Global; “Values retrieved from S&P Global”.

Key Takeaways for Investors

  • Demand tailwinds are durable: record ICE detention populations and multi‑year funding through 2029 underpin contracting velocity and capacity utilization .
  • Near‑term modeling: remove $0.08/share ERC tailwind from Q2 and include ≈$0.06/share Q3 ramp headwind; Q4 run‑rate improves materially with full Dilley and California City LT contract .
  • Earnings power building: CFO indicates minimum ~$400M annualized EBITDA run‑rate exiting Q4 (pre‑additional contracts), with upside from further idle facility activations .
  • Balance sheet flexibility and capital returns: 2.3x leverage and $346.9M liquidity support ongoing buybacks and tuck‑in acquisitions like Farmville (~$40M annual revenue) .
  • Watch legal milestones: Midwest injunction resolution is a catalyst for activating 1,033 beds and realizing ~$60M annual revenue potential under the new contract .
  • Segment mix positive: Safety revenue growth and margin expansion (26.2% vs 23.7% y/y; 24.6% ex‑ERC) suggest operating leverage as occupancy climbs .
  • Stock narrative: Guidance raise, federal funding clarity, and activation progress are key sentiment drivers; incremental contract wins and occupancy trajectory into 2026 likely re‑rate catalysts .