Key Highlights

  • Revenue was USD 744.1 million against an estimate of USD 697.55 million; diluted EPS was USD 14.49 against USD 15.14.
  • Adjusted diluted EPS was USD 0.49 against USD 0.24 last year, excluding a USD 1,770.7 million gain on Facility sales.
  • Four facilities with 7,187 beds were sold for USD 2.2 billion, and over USD 700 million of Debt was repaid.
  • Residential occupancy was 84.0% against 76.7% a year earlier, and adjusted EBITDA was USD 117.8 million.

CoreCivic (NYSE:CXW) reported third quarter Revenue of USD 744.1 million, against an estimate of USD 697.55 million. Diluted EPS was USD 14.49 against an estimate of USD 15.14, reflecting Net Income of USD 1,344.1 million that includes the gain on the sale of real estate assets. Adjusted net income was USD 45.7 million, or USD 0.49 per diluted share.

Results and the Facility Sales

Four facilities were sold to the Department of Homeland Security on July 2 and August 4, producing a gain of USD 1,770.7 million. Gross proceeds were USD 2.2 billion and net proceeds after income taxes and Transaction Costs were about USD 1.6 billion. The company continues to manage the four facilities under existing ICE contracts, and it said discussions with ICE about additional facility acquisitions are at a preliminary stage. Adjusted EBITDA was USD 117.8 million against USD 88.8 million.

CEO Lucibeth Mayberry, who was appointed on September 24 after the previous CEO stepped down for health reasons, said the strategy is unchanged. She attributed the quarter to higher ICE demand, recently activated facilities and the Clinical Solutions Pharmacy acquisition.

Occupancy, Segments and Federal Revenue

Residential occupancy rose to 84.0% from 76.7%, driven by contract awards at previously idle facilities including West Tennessee, California City, Diamondback and Midwest Regional. Federal customers in the Residential segment produced 53% of total revenue, against 55% a year earlier, and that federal revenue increased USD 71.3 million, or 22.2%. Operating Margin in the segment was 22.3% against 22.5%, which management linked to the four facilities still in activation. Those facilities generated net Operating Income of USD 19.9 million, and management projects about USD 320.0 million of annual revenue from them once fully activated.

In the Services segment, net operating income was USD 9.6 million against USD 1.1 million, primarily from Clinical Solutions Pharmacy, acquired on April 1, which supplies mail order pharmacy services to over 600 correctional facilities. A new five-year ICE contract for the Appleton Detention Facility began on August 11, with approximately USD 75.0 million of annual revenue projected once it is fully activated.

Debt Repayment and Share Repurchases

The company repaid its revolver, incremental term Loan and initial term loan balances and redeemed USD 238.5 million of 4.75% senior notes due 2027. Total debt outstanding was USD 629.6 million at September 30, and net debt to adjusted EBITDA was (0.1)x against 2.5x a year earlier.

On August 10 it entered a USD 500.0 million accelerated share repurchase and received 12.4 million shares up front. The board added USD 500.0 million on November 3, taking the aggregate authorization to USD 1.7 billion, with USD 755.8 million available. Final ASR settlement is scheduled before the end of the second quarter of 2027.

Updated 2026 Guidance

Guidance for diluted EPS is USD 15.42 to USD 15.48 against a prior range of USD 15.62 to USD 15.82. Adjusted diluted EPS is USD 1.74 to USD 1.80 against USD 1.64 to USD 1.73, and adjusted EBITDA is USD 442.5 million to USD 445.5 million against USD 434.5 million to USD 439.5 million.

Benchmarks Ahead

Revenue of USD 744.1 million sits alongside adjusted diluted EPS of USD 0.49, total debt of USD 629.6 million and USD 755.8 million of remaining repurchase authorization.

Management named dated items, including the Appleton intake beginning in the fourth quarter of 2026 with activation estimated complete in the second quarter of 2027, ASR settlement before the end of that quarter, and management contract expirations in August 2027 for California City and Midwest, December 2029 for Otay Mesa and August 2031 for Appleton.