GEO Raises 2026 Adjusted Earnings Forecast to $568–573 Million
Key Facts
GEO Group raised its financial forecasts for the fourth quarter and 2026, announcing on November 5 that adjusted EBITDA would reach $568–573 million for the year. It also raised its adjusted net income forecast to $185–190 million, or $1.40–1.44 per diluted share. The company reported third-quarter results alongside the forecast update, citing growth in revenue and adjusted earnings compared with the same period last year. The announcement came as the company moved to activate new or expanded contracts signed during 2025, according to Chairman and Chief Executive George Zoley. The results point to growth in operating activity, but higher earnings do not mean revenue exceeded analysts’ estimates: quarterly revenue fell short of estimates, while adjusted earnings per share beat expectations.
Third-quarter revenue was $761.1 million, compared with $682.3 million in the third quarter of 2025, an increase of 12% year over year. Adjusted EBITDA rose to $145.3 million from $120.1 million, up 21%. The company said this was a record level of adjusted earnings on a quarterly basis. Adjusted net income was $51.8 million, or $0.39 per diluted share, compared with $35 million and $0.25 per share a year earlier. Adjusted net income thus rose 48%, while revenue remained below market estimates, according to results coverage.
For the first nine months of 2026, revenue was $2.2 billion, compared with $1.9 billion in the corresponding period of 2025, an increase of 14%. Adjusted EBITDA also climbed to $418.7 million from $338.5 million, up 24%. Zoley said the year’s growth benefited from new or expanded contracts signed during 2025. He added that during 2026 the company signed new or expanded contracts worth about $500 million in additional annual revenue. Management thus linked the expansion in activity to an increase in contracted business, while it did not attribute the higher forecast to occupancy levels or operating efficiency.
Among the contracts set to begin operations, GEO expects activation of the Big Horn facility to generate about $85 million in annual revenue in its first full year of operation, and the Rivers facility to generate about $80 million. The company expects activation of both facilities to be completed by the end of 2026, with a natural contribution to earnings in early 2027. The Big Spring complex, with a capacity of 2,329 beds, is expected to add about $200 million in annual revenue in its first full year of operation. The announced schedule targets completion of its activation by the end of the first quarter of 2027, with its natural contribution to earnings beginning in the second quarter. These timelines show that part of the expected impact from contracts and activations falls in 2027, after the period covered by the company’s raised 2026 forecast.
The company set fourth-quarter revenue at $777 million to $827 million and raised its adjusted EBITDA forecast for the period to $149–154 million. The contract to manage the Northwest ICE Center in Tacoma also took effect on October 28, 2026, for 10 years, and GEO expects it to generate about $140 million in annual revenue through October 27, 2036. The forecast comes after the sale of the Adelanto complex on October 2 for gross proceeds of $950 million, with net proceeds of about $705 million after taxes and costs. The company said it used the sale proceeds to redeem $650 million of secured notes due in 2029, and that its total corporate debt was $625 million after the redemption. This sequence distinguishes growth in contracts and expected revenue from the financial impact of the asset sale and debt reduction.
According to the company’s November 5 disclosure, GEO had repurchased about 10.1 million shares at a total cost of about $177 million under a $1.25 billion share repurchase authorization, with about $1.07 billion remaining available. Third-quarter 2025 results had included a gain from asset sales and unusual or nonrecurring items; as a result, net income attributable to GEO’s operations then was $173.9 million, compared with $49.2 million in the third quarter of 2026. That comparison differs from the increase in adjusted net income, which rose to $51.8 million from $35 million over the same period. The company had scheduled a conference call to discuss results and forecasts on November 5 at 1:00 p.m. Eastern time. It also said discussions about selling other company-owned facilities to ICE had not resulted in a final agreement, and there was no specific timeline for closing any additional deal.