Do you believe initial sales could be realized or announced within Q2 or is Q3 more likely?

Management guessed late Q2, maybe early Q3, but emphasized it was just a guess. “I would guess at late Q2, maybe early Q3. But that's just the guess.”

Given the decline in ICE populations from 24,000 to 21,000, how did this impact Q1 performance and the ramp-up of reactivated facilities?

Lower populations led to reduced intake duties, housing assignments, off-site travel, labor, and overtime, which favorably impacted EBITDA. The rapid intakes at new facilities have slowed due to the national population scale-down, putting them in a holding pattern. “With respect to lower populations, it required less intake duties, less housing assignments, less off-site travel, less labor and overtime for servicing these facilities, which, at one point, we're extremely active as to the intake and outflow of detainees, which was very costly in bringing people in on an overtime basis often to handle those areas of intake, housing and off-site requirements.”

Can you provide details on the current volume and revenue model for the skip tracing business?

Guidance reflects modest improvement. The company delivered its initial contract quickly and is waiting for other contractors to catch up before receiving its next assignment. “Our guidance really reflects some modest improvement in that program. We received an initial contract. We delivered it very quickly. There are other contractors that were awarded similar contracts. They're still working on their assignments and we're waiting for them to catch up so we can get our next assignment.”

GEO

GEO Group (GEO) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· May 6, 2026

Source: earnings call transcript

Executive summary

The GEO Group Q1 FY26 — Strong Performance and Increased Outlook Driven by New Contracts

The GEO Group delivered strong Q1 FY26 results, exceeding expectations due to significant revenue growth from new contracts secured in 2025. Despite a decline in ICE populations and payment delays from a partial government shutdown, the company raised its full-year outlook, driven by operational efficiencies and a strategic mix shift in its ISAP 5 program. Management also highlighted potential upside from idle bed reactivation and ongoing discussions for facility sales to ICE.

Highlights

Secured new or expanded contracts in 2025 representing up to approximately $520 million in new incremental annual revenues, the largest in company history.
Net income attributable to GEO operations increased 96% to $38.3 million ($0.29 per diluted share) in Q1 FY26 from $19.6 million ($0.14 per diluted share) in Q1 FY25.
Adjusted EBITDA increased 32% to $131.4 million in Q1 FY26 from $99.8 million in Q1 FY25.
Increased full-year 2026 GAAP net income guidance to $1.15-$1.25 per diluted share and Adjusted EBITDA to $525M-$545M.
Repurchased 3.6 million shares for approximately $50 million in Q1 FY26, with $359 million remaining under authorization.

Concerns

ICE census across facilities declined from a high of 24,000 early this year to approximately 21,000.
Partial government shutdown of DHS resulted in delayed payments and collections, requiring careful liquidity management.
The DHS warehouse project to increase detention capacity has been paused, with the department evaluating how to proceed.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 GAAP Net Income	$153M-$166M high materiality	FY26	High
Full-year 2026 GAAP EPS	$1.15-$1.25 per diluted share high materiality	FY26	High
Full-year 2026 Annual Revenues	$2.95B-$3.1B high materiality	FY26	High
Full-year 2026 Adjusted EBITDA	$525M-$545M high materiality	FY26	High
Full-year 2026 Total Capital Expenditures	$137.5M-$162.5M medium materiality	FY26	High
Full-year 2026 Effective Tax Rate	~30% low materiality	FY26	High
Q2 2026 GAAP Net Income	$33M-$39M medium materiality	Q2 · FY26	High
Q2 2026 GAAP EPS	$0.25-$0.29 per diluted share medium materiality	Q2 · FY26	High
Q2 2026 Quarterly Revenues	$715M-$725M medium materiality	Q2 · FY26	High
Q2 2026 Adjusted EBITDA	$130M-$135M medium materiality	Q2 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Secure Services (owned and leased) Increase driven by activation of 3 company-owned facilities under new contracts with ICE, offset by revenue loss from the sale of Lawton, Oklahoma facility and depopulation of Lea County, New Mexico facility.	$70M increase	23%	—	—
Managed-only contracts Increase driven by joint venture agreement for the management of the North Florida ICE detention facility and certain transportation revenue increases.	$33M increase	22%	—	—
Reentry services Revenue increased year-over-year.	—	5%	—	—
Nonresidential services Revenue declined year-over-year.	—	-5%	—	—
Electronic Monitoring and Supervision services Decrease driven by reduced pricing for ISAP 5 contract, offset by favorable technology and case management mix shift and modest skip tracing revenues.	—	-4%	—	—

GEO operating KPIs by quarter

GEO operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Beds under contract ICE	~26K These facility activations represent annual revenues of approximately $300 million and increased our total beds under contract with ICE to approximately 26,000 beds. Source: earnings call transcript	~27K In our Secure Services segment, we entered into new contracts to house ICE detainees at 4 facilities valued at approximately $280 million in annual revenues and totaling approximately 6,000 beds, increasing our total active ICE beds to approximately 27,000. Source: earnings call transcript	—
Detention census ICE	~21K The census across our ICE facilities reached a high of 24,000 early this year but has since declined to approximately 21,000, but still representing more than 1/3 of the national ICE population of approximately 58,000. Source: earnings call transcript	~24K Our current centers across our active ICE facilities is approximately 24,000, representing more than 1/3 of the current national ICE population of approximately 68,000, which has distributed over 225 separate locations that are primarily short-term GEO facilities. Source: earnings call transcript	—
ISAP participants on GPS ankle monitors	48K+ The number of ISAP participants on GPS ankle monitors has increased to more than 48,000 currently from 17,000 in early 2025. Source: earnings call transcript	~54K The number of ISAP participants on GPS ankle monitors has increased to approximately 54,000 currently from 17,000 early 2025. Source: earnings call transcript	—
ISAP participants assigned to case management services	~111K We also continue to experience a steady increase in the number of ISAP participants assigned to case management services, which involve staff interaction and monitoring for approximately 111,000 individuals currently. Source: earnings call transcript	~116K We also continue to experience a steady increase in the number of ISAP participants assigned to case management services which involves staff interaction and monitoring for approximately 116,000 individuals currently. Source: earnings call transcript	—
Idle beds	~6,000 We have approximately 6,000 idle beds at 6 company-owned facilities, which are primarily former US Bureau of Prisons facilities, and therefore, high security, making them ideally suited for the current needs of the federal government. Source: earnings call transcript	~4,500 We have also approximately 4,500 idle beds that remain available at 5 company-owned facilities, which are designed for high security and therefore, well suited for the current needs of the federal government. Source: earnings call transcript	—
Idle facilities	6 We have approximately 6,000 idle beds at 6 company-owned facilities, which are primarily former US Bureau of Prisons facilities, and therefore, high security, making them ideally suited for the current needs of the federal government. Source: earnings call transcript	5 We have also approximately 4,500 idle beds that remain available at 5 company-owned facilities, which are designed for high security and therefore, well suited for the current needs of the federal government. Source: earnings call transcript	-16.7%
Owned beds	50K Given the intrinsic value of our assets, including 50,000 owned beds at 70 facilities and our current and expected future growth, we believe that our stock is significantly undervalued and offers a very attractive investment opportunity. Source: earnings call transcript	50K Given the intrinsic value of our assets, including 50,000 owned beds, our strong financial performance and providing diversified secure support services and our expected future growth, we believe our stock continues to be significantly undervalued and offers a very attractive investment opportunity. Source: earnings call transcript	0%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

ICE New contracts for housing ICE detainees $300M annual revenues

New contracts to house ICE detainees at four facilities, totaling approximately 6,000 beds. This includes three previously idle company-owned facilities in New Jersey, Michigan, Georgia, and a management services contract in Florida. Also reactivated the company-owned Adelanto ICE Processing Center in California.

ICE and U.S. Marshals Service Expanded secure transportation services $60M incremental annual revenue 5-year contract with U.S. Marshals Service

New or amended contracts in 2025 to expand secured ground transportation services at four existing ICE facilities and add three newly activated ICE facilities. Also, a new 5-year contract with U.S. Marshals Service covering 26 federal judicial districts in 14 states.

ICE New 2-year contract for ISAP 5 program 2 years

New 2-year contract for the ISAP 5 program, providing electronic monitoring and case management services for non-detained individuals. The program relies on GPS ankle bracelets, risk-worn devices, and the SmartLink phone app.

ICE New 2-year contract for skip tracing services Up to $60M per year 2 years

New 2-year contract for the provision of skip tracing services.

Florida Department of Corrections Two new management-only contracts $100M combined annual revenues

Two new management-only contracts for the 1,884-bed Graceville facility and the 985-bed Bay facility. Scheduled to transition to GEO management on July 1, 2026.

ICE Potential sale of multiple facilities to ICE

Discussions are ongoing with ICE regarding the potential sale of multiple facilities. GEO would prioritize continued management of these facilities under long-term support services contracts. No definitive agreement or precise timeline.

Risks & headwinds

Decline in ICE detention census Early 2026 to current

From 24,000 to 21,000 participants

Mitigation:Expects stabilization in Q2 and pickup in H2; ISAP 5 mix shift provides revenue upside; 6,000 idle beds available for activation.

Partial government shutdown of DHS Current

Delayed payments and collections

Mitigation:Expanded revolving credit facility by $100 million to manage liquidity and working capital needs; essential public safety services continue uninterrupted.

Uncertainty regarding DHS immigration enforcement policies Ongoing

Warehouse project paused; reevaluation of immigration enforcement policies

Mitigation:GEO is a 40-year partner to ICE and expects to be part of the solution; has 6,000 idle high-security beds ideally suited for federal needs.

What to watch in Q2 FY26

Timing of potential facility sales to ICE

Late Q2, maybe early Q3

Current Discussions ongoing, no definitive agreement

Target Announcement of initial sales

Why it matters

Potential for significant liquidity and shareholder value enhancement for the company.

I would guess at late Q2, maybe early Q3. But that's just the guess.

Find out whether GEO delivers this. Inve re-checks your case every morning.

Q&A highlights

How should we think about potential valuations for facility sales to ICE, compared to the Lawton facility sale at $130,000 per bed?

The Lawton valuation is a good baseline, but ICE facilities should command a meaningfully higher valuation due to more complex physical plants, urban locations, and being in 'blue states' which makes replication difficult.

“Lawton bed valuation is a good baseline to be followed by several other factors that should be the result in a meaningful higher valuation of our ICE facilities.”

asked by Greg Gibas · answered by George Zoley

2 min read 6 chapters

Detailed narrative

Record New Business Wins in 2025

GEO Group secured new or expanded contracts in 2025 totaling approximately $520 million in incremental annual revenues, marking the largest amount of new business in the company's history. These include contracts for 6,000 ICE beds across four facilities, $60 million in expanded secure transportation services, and a new 2-year ISAP 5 program contract.

Additionally, a new 2-year skip tracing services contract valued at up to $60 million per year and two Florida Department of Corrections management contracts totaling $100 million annually were awarded.

ICE Operations and Funding Dynamics

The company's ICE facilities saw a peak census of 24,000 early in the year, declining to 21,000, still representing over a third of the national ICE population of approximately 58,000. Management attributes this decline to a recent transition in DHS leadership and a partial government shutdown.

However, $45 billion in detention funding through September 2029 is available under the budget reconciliation bill, ensuring continued operations for essential public safety services despite payment delays.

ISAP 5 Program Evolution and Mix Shift

The ISAP 5 program, providing electronic monitoring and case management services, maintained stable participant counts around 180,000-181,000 in Q1 FY26. A significant technology shift is occurring, with GPS ankle monitors increasing to over 48,000 from 17,000 in early 2025, while SmartLink app users declined to 131,000 from 159,000.

This mix shift towards more intensive and higher-priced monitoring, alongside increased case management services for 111,000 individuals, is expected to boost revenues and earnings under the ISAP contract.

Strategic Capital Structure and Share Repurchases

GEO Group continues to strengthen its capital structure, repurchasing 3.6 million shares for approximately $50 million in Q1 2026. This brings the total repurchased shares to 8.5 million for approximately $141 million, with $359 million remaining under the $500 million authorization. The company believes its stock is significantly undervalued, presenting a unique opportunity to enhance shareholder value through these buybacks.

Potential Facility Sales to ICE

Discussions are underway with ICE regarding the potential sale of multiple facilities, though no definitive agreement or timeline exists. GEO Group would prioritize continued management of these facilities under long-term support service contracts. Proceeds from any sales would be used for debt reduction, share repurchases, and other corporate purposes. Management suggests federal ownership could offer greater protection from litigation compared to private ownership.

Idle Bed Capacity and Future Growth Opportunities

The company possesses approximately 6,000 idle beds across six company-owned facilities, primarily former U.S. Bureau of Prisons sites, which are high-security and ideally suited for current federal needs. These beds could generate over $300 million in incremental annual revenues at full capacity.

Management expects to be part of the solution for ICE's objective to increase detention capacity to 100,000 beds and consolidate to fewer, larger facilities.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.