second quarter 2026
Filed Aug 6, 2026THE GEO GROUP REPORTS SECOND QUARTER RESULTS AND UPDATES FULL YEAR 2026 GUIDANCE
Second-quarter revenues increased 15 percent, net income attributable to GEO Operations increased 63 percent, and Adjusted EBITDA increased 20 percent. The company also increased full-year 2026 net income attributable to GEO Operations and Adjusted EBITDA guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $732.1 million | – | 15 percent increase |
| Net income attributable to GEO OperationsGAAP | $47.5 million | – | 63 percent increase |
| Net income attributable to GEO Operations per diluted shareGAAP | $0.36 per diluted share | – | – |
| Adjusted net incomenon-GAAP | $48.8 million | – | – |
| Adjusted net income per diluted sharenon-GAAP | $0.37 per diluted share | – | – |
| Adjusted EBITDAnon-GAAP | $142.0 million | – | 20 percent increase |
| Combined loss on asset divestitures/impairment, start-up expenses, transaction fees, and employee restructuring expensesother | $1.7 million, pre-tax | – | – |
| Total revenues, first six months of 2026GAAP | $1.44 billion | – | 16 percent increase |
| Net income attributable to GEO Operations, first six months of 2026GAAP | $85.8 million | – | 76 percent increase |
| Net income attributable to GEO Operations per diluted share, first six months of 2026GAAP | $0.65 per diluted share | – | – |
| Adjusted net income, first six months of 2026non-GAAP | $87.4 million | – | – |
| Adjusted net income per diluted share, first six months of 2026non-GAAP | $0.66 per diluted share | – | – |
| Adjusted EBITDA, first six months of 2026non-GAAP | $273.4 million | – | 25 percent increase |
| Combined loss on asset divestitures/impairment, start-up expenses, transaction fees, employee restructuring expenses, and close-out expenses, first six months of 2026other | $2.1 million, pre-tax | – | – |
full year 2026; third quarter 2026; fourth quarter 2026 outlook
- RevenueFull year 2026: $2.95 billion to $3.05 billion; third quarter 2026: $755 million to $805 million; fourth quarter 2026: $758 million to $808 million
- Tax rateapproximately 30 percent, inclusive of known discrete items
- NoteFull year 2026 Net Income Attributable to GEO Operations: $168 million to $175 million, or $1.27 to $1.32 per diluted share
- NoteFull year 2026 Adjusted EBITDA: $550 million to $560 million
- NoteFull year 2026 total unreimbursed Capital Expenditures: between $135 million and $145 million
- NoteThird quarter 2026 Net Income Attributable to GEO Operations: $45 million to $48 million, or $0.35 to $0.37 per diluted share
- NoteThird quarter 2026 Adjusted EBITDA: between $140 million and $145 million
- NoteFourth quarter 2026 Net Income Attributable to GEO Operations: $37 million to $41 million, or $0.28 to $0.31 per diluted share
- NoteFourth quarter 2026 Adjusted EBITDA: between $137 million and $142 million
- NoteGuidance does not include any earnings contribution from the new Big Horn and Rivers ICE contracts.
- NoteGuidance does not include any earnings contribution from the previously announced managed-only contracts for the 1,884-bed Graceville Facility and the 985-bed Bay Facility in the State of Florida.
Capital returns
- Repurchased approximately 1.6 million shares of GEO common stock at an aggregate cost of approximately $36.6 million during the second quarter of 2026.
- As of June 30, 2026, repurchased approximately 10.1 million shares of GEO common stock at an aggregate cost of approximately $177 million under the $500 million share repurchase authorization.
- Approximately $323 million of repurchase authorization was available as of June 30, 2026.
What drove it
- Second-quarter 2026 revenue growth reflected contracts entered into throughout 2025.
- Operating Expenses continued to be favorably impacted by lower labor costs during the second quarter of 2026.
- The Big Horn Facility contract is expected to generate approximately $85 million in annual revenues in the first full year of operations.
- The Rivers Facility contract is expected to generate approximately $80 million in annual revenues in the first full year of operations.
- ICE will reimburse GEO for capital expenditures needed to reactivate the Big Horn Facility and Rivers Facility and provide funding for start-up expenses during the activation period.
Concerns
- Guidance assumes a more moderate contribution from labor cost savings for the second half of 2026.
- The Big Horn Facility and Rivers Facility are expected to achieve normalized operations and earnings contribution in early 2027, and their earnings contribution is excluded from updated 2026 guidance.
- The Graceville Facility and Bay Facility contracts are now expected to transition to GEO on July 1, 2027.
What to watch
- Completion of Big Horn Facility and Rivers Facility activation by the end of 2026.
- Additional growth in the U.S. Secure Services segment from reactivation of additional idle facilities and/or higher overall populations across active facilities.
- Additional volume increases and/or accelerated technology and service mix shift in the ISAP contract.
- Additional growth in secure transportation services and higher utilization of the skip tracing services contract.
- Execution against third-quarter and fourth-quarter 2026 revenue, net income attributable to GEO Operations, and Adjusted EBITDA guidance.
Balance sheet and cash flow
- Approximately $55 million in cash and cash equivalents at the end of the second quarter 2026.
- Approximately $1.54 billion in total debt at the end of the second quarter 2026.
- Total net debt of approximately $1.5 billion at the end of the second quarter 2026.
- Total net leverage below 3 times Adjusted EBITDA for the trailing 12 months.
- Total available liquidity of approximately $300 million, including cash on hand and Revolver availability, at the end of the second quarter 2026.
Analysis
GEO reported a strong second quarter, with total revenues of $732.1 million compared to $636.2 million in the second quarter 2025. Net income attributable to GEO Operations was $47.5 million, or $0.36 per diluted share, compared to $29.1 million, or $0.21 per diluted share. Adjusted EBITDA was $142.0 million compared to $118.6 million. For the first six months of 2026, total revenues were $1.44 billion, net income attributable to GEO Operations was $85.8 million, and Adjusted EBITDA was $273.4 million.
Management attributed second-quarter revenue growth to contracts entered into throughout 2025. Operating Expenses continued to benefit from lower labor costs. Second-quarter results included $1.7 million, pre-tax, in combined loss on asset divestitures/impairment, start-up expenses, transaction fees, and employee restructuring expenses. Excluding these items, adjusted net income was $48.8 million, or $0.37 per diluted share.
The company increased full-year 2026 guidance for Net Income Attributable to GEO Operations to $168 million to $175 million, or $1.27 to $1.32 per diluted share, and increased Adjusted EBITDA guidance to $550 million to $560 million. Full-year revenue guidance is $2.95 billion to $3.05 billion. The outlook assumes a more moderate contribution from labor cost savings in the second half of 2026 and excludes earnings contribution from the new Big Horn and Rivers ICE contracts.
The Big Horn Facility and Rivers Facility contracts add expected annual revenue opportunities of approximately $85 million and approximately $80 million, respectively, in their first full year of operations. Both facilities are expected to complete activation by the end of 2026 and achieve normalized operations and earnings contribution in early 2027. Separately, the Graceville Facility and Bay Facility contracts, valued at approximately $100 million in combined annual revenues, are expected to transition to GEO on July 1, 2027.
Capital allocation included approximately $36.6 million of second-quarter share repurchases, while total net debt was approximately $1.5 billion and total net leverage was below 3 times Adjusted EBITDA for the trailing 12 months. Investors should monitor the pace of facility activations, the assumed moderation in labor-cost savings, progress on potential U.S. Secure Services and ISAP volume upside, and delivery against third-quarter and fourth-quarter guidance.
Management, verbatim
We are very pleased with our strong second quarter results and improved full year outlook.
George C. Zoley, Chairman, Chief Executive Officer and Founder
Our financial performance in the first half of 2026 has been driven by the new growth opportunities we captured in 2025 and are normalizing this year.
George C. Zoley, Chairman, Chief Executive Officer and Founder
We remain focused on pursuing new growth opportunities and allocating capital to enhance long-term value for our shareholders, and we believe that our stock continues to offer a very attractive investment opportunity.
George C. Zoley, Chairman, Chief Executive Officer and Founder
Not in the filing
stated, not guessed- Segment revenue, segment year-over-year change, segment quarter-over-quarter change, and segment profitability were not provided in the supplied filing text.
- Gross profit and gross margin were not provided.
- Operating income, operating margin, and operating expenses as a reported dollar amount were not provided.
- Cash flow from operations and free cash flow were not provided.
- Dividend information was not provided.
- Prior-quarter comparisons for reported second-quarter metrics were not provided.
- Previous outlook was not provided, so comparison of actual results with prior guidance was not available.
- The supplied filing text does not provide a complete financial-statement presentation or a GAAP/non-GAAP reconciliation beyond the metrics described in the release.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.