Executive Summary

Q4 2024 revenue was $607.7M, in line with guidance ($600–$610M), but EPS ($0.11) and Adjusted EBITDA ($108.0M) missed internal guidance due to higher G&A linked to management reorganization and professional fees ahead of 2025 growth initiatives .
Management announced a 15-year ICE contract at the 1,000-bed Delaney Hall facility, expected to exceed $60M in annualized revenue in its first full year and ~$1B over the term, with normalization in 2H25 .
2025 initial guidance sets a conservative baseline: EPS $0.74–$0.88, Adjusted EBITDA $460–$485M, revenue ~ $2.5B, tax rate ~28%, and capex $125–$145M, excluding upside from unannounced contracts; management sees potential $800M–$1B incremental ICE revenue and $250–$300M incremental Adjusted EBITDA over time, with more impact in 2H25/2026 .
Balance sheet progress continued: year-end net debt ~$1.7B, net leverage ~3.7x; GEO targets a further $150–$175M net debt reduction in 2025 to ~$1.55B, enabling future capital return options .

What Went Well and What Went Wrong

What Went Well
- Secured a 15-year, fixed-price ICE contract for Delaney Hall (> $60M annualized revenue; ~ $1B contract value), reactivating in Q2 2025 and normalizing in 2H25 .
- Sequential revenue growth and revenue in line with guidance; owned/leased Secure Services revenue grew ~3% YoY; ICE utilization at GEO facilities increased to ~15,000, highest in ~5 years .
- Clear deleveraging path with targeted 2025 net debt reduction of $150–$175M and a strong runway with no substantial maturities before April 2029 .
What Went Wrong
- EPS ($0.11) and Adjusted EBITDA ($108.0M) below expectations due to ~18% YoY increase in G&A from reorganization and professional fees; EBITDA margin compressed vs prior periods .
- Electronic Monitoring (ISAP) revenue declined ~10% YoY in Q4; ISAP participants averaged ~183k in Q4, up from Q3’s 177k but below prior peak (~370k) .
- Elevated costs tied to debt extinguishment and restructuring (Q4 pre-tax ~$1.3M extinguishment; ~$2.1M restructuring) impacted GAAP earnings power .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$608.3	$607.2	$603.1	$607.7
Diluted EPS (GAAP)	$0.17	$(0.25)	$0.19	$0.11
Adjusted EPS (Non-GAAP)	$0.29	$0.23	$0.21	$0.13
Adjusted EBITDA ($USD Millions)	$129.0	$119.3	$118.6	$108.0
Adjusted EBITDA Margin (%)	21.2%	19.6%	19.7%	17.8%
Operating Income ($USD Millions)	$83.8	$80.1	$82.4	$67.9
Operating Margin (%)	13.8%	13.2%	13.7%	11.2%
G&A Expense ($USD Millions)	$51.6	$52.2	$47.1	$60.7
Operating Expenses ($USD Millions)	$441.9	$443.5	$441.9	$447.4

Notes: Margins are calculated from cited revenue and operating/Adjusted EBITDA figures.

Q4 2024 Actual vs Company Guidance (issued Nov 7, 2024)

Metric	Q4 2024 Guidance (Q3 PR)	Q4 2024 Actual	Outcome
Revenue ($USD Millions)	$600–$610	$607.7	In line
Adjusted EBITDA ($USD Millions)	$114–$124	$108.0	Below
Diluted EPS (GAAP)	$0.19–$0.22	$0.11	Below

Segment Performance (YoY, Q4 2024)

Segment	Q4 2024 YoY Revenue Change	Commentary
Owned & Leased Secure Services	~+3%	Supported by higher labor-cost pass-throughs and activity; partly offset in consolidated by other segments
Electronic Monitoring & Supervision	~−10%	Lower ISAP utilization vs prior year; participants 183k avg in Q4
Reentry/Managed-only/Nonresidential	Largely unchanged	Stable census and contract renewals

Key KPIs and Balance Sheet

KPI	Q2 2024	Q3 2024	Q4 2024	Current/Other
ISAP Participants (avg)	~184k	~177k	~183k	~186k current
ICE Detention Beds Utilized at GEO	~14k (Dec’24)	—	~15k; +1k since last call	Target +17k incremental capacity potential
Net Debt	—	~$1.69B (Q3)	~$1.7B (YE)	2025 target ~$1.55B
Net Leverage	—	~3.5x (Q3)	~3.7x (YE)	2025e ~3.1–3.4x
Cash / Liquidity	—	$71M / $280M (Q3)	$77M / $214M (YE)	—
New ICE Contract (Delaney Hall)	—	—	Awarded (2/27/25)	>$60M annualized; ~ $1B total value

Non-GAAP adjustments impacted Q4 EPS: pre-tax ~$1.3M extinguishment, ~$0.2M transaction fees, ~$2.1M restructuring; Adjusted EPS $0.13 vs GAAP $0.11 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Income Attrib. to GEO (Diluted EPS)	FY 2025	N/A (initial)	$0.74–$0.88; tax ~28%	—
Adjusted EBITDA	FY 2025	N/A (initial)	$460M–$485M	—
Revenue	FY 2025	N/A (initial)	~ $2.5B	—
Capex	FY 2025	N/A (initial)	$125M–$145M (incl. $70M ICE capability program)	—
Net Debt Reduction (target)	FY 2025	N/A (initial)	$150M–$175M reduction; YE net debt ~ $1.55B	—
Net Leverage	FY 2025 YE	N/A (initial)	~3.1–3.4x	—
Q4 2024 Revenue	Q4 2024	$600–$610M	$607.7M (actual)	Met
Q4 2024 Adjusted EBITDA	Q4 2024	$114–$124M	$108.0M (actual)	Lower
Q4 2024 Diluted EPS (GAAP)	Q4 2024	$0.19–$0.22	$0.11 (actual)	Lower

Management reiterated potential upside in 2025 from unannounced ICE awards: $800M–$1B incremental revenue and $250M–$300M incremental Adjusted EBITDA when fully ramped (more in 2H25; full benefit in 2026) .

Earnings Call Themes & Trends

Topic	Q-2 (Q2 2024)	Q-1 (Q3 2024)	Current (Q4 2024)	Trend
ISAP utilization and EM revenue	Debt refinancing overshadowed; outlook provided; ISAP update less specific	ISAP participants down to ~177k; segment revenue underperformed	ISAP avg ~183k; current ~186k; capacity to scale “several hundreds of thousands to millions” with $16M device inventory build	Stabilizing, poised to ramp
ICE detention capacity	Adelanto funding extension; contract structure noted	18k beds available company-wide potential	~15k utilized (+1k QoQ), plan to add ~17k beds; Delaney Hall 15-year award	Ramping via reactivations & new award
Policy/funding backdrop	BOP/DOJ policy effects, EO context	Cautious; updated Q4 guide consistent with Q3 run-rate	Lake & Riley Act drives need for more beds; budget reconciliation may unlock funding; 2H25 activation cadence	Improving visibility, timing still funding-dependent
Deleveraging/capital returns	Completed refinancing; path to deleveraging	Net leverage ~3.5x; liquidity solid	YE net leverage ~3.7x; target $150–$175M debt cut in 2025; exploring asset sales (e.g., Lawton)	Continuing progress
Management/organization	—	—	Reorg completed; CEO transition to J. David Donahue; higher G&A in Q4 tied to reorg & growth prep	Leadership aligned for growth

Management Commentary

“We completed the previously announced reorganization of our senior management team and incurred additional professional fees in anticipation of what we expect to be unprecedented future growth opportunities and significant operational activity during 2025.” – George C. Zoley, Executive Chairman .
“We believe these investments will prepare us to be able to provide approximately 17,000 incremental detention beds to ICE and the federal government… [potential] $500 million to $600 million in incremental annualized revenues with margins consistent with our Secure Services owned facilities.” – George C. Zoley .
“We expect our full year 2025 Adjusted EBITDA to be between $460 million and $485 million… we anticipate several opportunities could materialize during the year… representing significant upside.” – Management .
“We ended the fourth quarter of 2024 with total net debt of approximately $1.7 billion… expect to reduce our net debt by between $150 million and $175 million this year.” – Management .
“Delaney Hall… expected to generate in excess of $60 million in annualized revenues… 15-year value… approximately $1 billion.” – Management .

Q&A Highlights

Magnitude and timing of upside: Unannounced ICE opportunities could add $800M–$1B revenue and $250M–$300M Adjusted EBITDA when fully ramped; benefits begin in 2H25 with full run-rate more in 2026 .
ISAP ramp sensitivity: ~+$250M incremental revenue at 370k participants; upside exceeds that if counts surpass prior peak; initial focus on high-security ankle monitors, no supply chain issues identified .
Facility activations and start-up costs: Expect contracting for idle facilities in 2025 with 60–90 day activations; start-up costs not yet in guidance; Delaney Hall receives partial payment during start-up, with broader ramp in 2H25 .
Adelanto update: Court lifted intake restrictions’ first phase; expectation for full utilization subject to next hearing; facility has capacity nearing 2,000 beds .
Asset monetization: Progress on potential sale of Lawton facility; appraisal expected by “next month” from the call date .

Estimates Context

S&P Global (Capital IQ) Wall Street consensus for Q4 2024 EPS and revenue was unavailable at the time of this analysis due to an access limit; therefore, we benchmark Q4 results against company guidance only and do not present third-party consensus comparisons [GetEstimates error].
Implication: Absent consensus, model updates should reflect Q4 miss vs internal guidance (lower EBITDA/EPS on higher G&A) but incorporate the secured Delaney Hall contract and the prospective ICE-driven upside path communicated by management .

Key Takeaways for Investors

Q4 execution: Top line in line, but EPS/EBITDA missed on transient G&A tied to reorg and professional fees—margin normalization depends on timing of contract activations and overhead absorption in 2025 .
Real, contracted growth: Delaney Hall (> $60M annualized; ~ $1B total) de-risks part of the upside and should contribute meaningfully in 2H25, independent of broader procurement timelines .
Large optionality from ICE: Management outlined potential $800M–$1B revenue and $250M–$300M Adjusted EBITDA uplift when fully activated, with contracting expected through 2025 and fuller financial impact in 2026; watch budget reconciliation and DHS/ICE funding flows .
ISAP as lever: EM/ISAP participants (183k Q4; ~186k current) are positioned to scale materially; ~$250M revenue at 370k participants provides a reference point, with device inventory build underway .
Deleveraging ongoing: YE net debt ~$1.7B, net leverage ~3.7x; 2025 target reduction $150–$175M (to ~$1.55B) improves flexibility for potential capital returns as visibility on growth improves .
Near-term trading setup: Catalysts include additional ICE/USMS awards (contract announcements), Adelanto utilization progress, and clarity on budget appropriations; near-term margins may remain pressured until activation ramps (2H25) .
Medium-term thesis: If policy and funding align, GEO’s secured housing, transportation, and monitoring footprint could materially expand, lifting EBITDA and deleveraging trajectory; execution on staffing/activation and timely reimbursement will be key .

GEO GROUP INC (GEO)·Q4 2024 Earnings Summary