GEO Group reported third‑quarter 2025 results that surpassed consensus expectations, with net income attributable to the company rising to $173.9 million and diluted earnings per share of $1.24, compared with $26.3 million and $0.19 a year earlier. Adjusted earnings per share of $0.25 beat the consensus estimate of $0.22 by $0.03, a 13.6% lift that reflects disciplined cost management, the impact of a $312 million gain on the sale of the Lawton Correctional Facility, and the contribution of newly signed federal contracts.
Total revenue climbed to $682.3 million, up 13.5% from $603.1 million in Q3 2024 and beating the consensus estimate of $652.7 million by $29.6 million (4.5%). The growth was driven primarily by the U.S. Secure Services segment, which benefited from four new ICE facilities and three Florida Department of Corrections contracts. Electronic Monitoring and Reentry Services maintained steady performance, while the International Services segment continued to grow at a moderate pace, supporting the company’s overall revenue momentum.
Management guided for fourth‑quarter GAAP net income of $0.23 to $0.27 per diluted share and adjusted EBITDA of $117 million to $127 million, and for full‑year 2025 net income of $1.81 to $1.85 per diluted share and adjusted EBITDA of $455 million to $465 million. The upward revision reflects confidence that capital‑expenditure needs will normalize and that the new ICE and state contracts will start generating incremental revenue in 2026. The guidance signals a steady trajectory for earnings growth and a focus on maintaining profitability as the company scales its federal footprint.
The company completed the sale of its 2,388‑bed Lawton Correctional Facility for $312 million and the 139‑bed Hector Garza Reentry Center for $10 million, and used the proceeds to acquire a 770‑bed San Diego Facility for approximately $60 million. These transactions improve liquidity, reduce debt, and align the portfolio with high‑margin federal contracts, positioning GEO to capture additional revenue from the expanded capacity.
GEO’s board increased the share‑repurchase authorization to $500 million and the company has already repurchased 1.97 million shares at a total cost of $41.6 million. The expanded authorization underscores management’s commitment to returning capital to shareholders while maintaining flexibility to invest in growth opportunities.
The company remains subject to a significant legal headwind: the “Nwauzor v. GEO” case has resulted in a non‑cash contingent liability of $37.7 million pre‑tax. GEO is appealing the ruling to the U.S. Supreme Court. In a statement, Executive Chairman George C. Zoley noted that the sale of the Lawton Facility “is representative of the intrinsic value of our Company‑owned facilities, which now total approximately 50,000 beds.” He also emphasized that the acquisition of the San Diego Facility is expected to be accretive to adjusted EBITDA and that the company’s “available beds across contracted and idle secure services facilities” provide significant upside potential as contracts mature.
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