GEO Group reports Q2 profit, announces $300 million share buyback

BOCA RATON - The GEO Group, Inc. (NYSE:GEO), currently valued at $3.58 billion by market capitalization, reported a net income of $29.1 million, or $0.21 per diluted share, for the second quarter of 2025, a significant improvement from a net loss of $32.5 million, or $0.25 per diluted share, in the same period last year. According to InvestingPro analysis, the company appears slightly undervalued at its current price of $25.84, with analysts setting price targets between $35 and $50.

The company, which provides support services for secure facilities and processing centers, announced that its Board of Directors has authorized a $300 million share repurchase program, set to expire on June 30, 2028. This move comes as the stock has demonstrated remarkable strength, posting a 101.4% return over the past year according to InvestingPro data.

Total revenues for the quarter reached $636.2 million, up from $607.2 million in the second quarter of 2024. Adjusted EBITDA was $118.6 million, slightly down from $119.3 million in the prior-year period.

"We are very pleased with our strong second quarter results, and the significant progress we have made towards meeting our growth and strategic objectives," said George C. Zoley, Executive Chairman of GEO.

The company recently completed several significant transactions, including the sale of its Lawton, Oklahoma facility for $312 million and the purchase of the Western Region Detention Facility in San Diego for approximately $60 million.

GEO also reported progress on several contracts with U.S. Immigration and Customs Enforcement (ICE), including the activation of facilities in New Jersey, Michigan, and Georgia, which are expected to generate substantial additional revenues as they reach full occupancy.

For the full year 2025, the company expects net income attributable to GEO to be in the range of $1.99 to $2.09 per diluted share, including a $228 million gain on the Lawton facility sale. Adjusted net income is projected between $0.84 and $0.94 per diluted share, with revenues of approximately $2.56 billion.

The company has reduced its net debt to approximately $1.47 billion, bringing its net leverage to approximately 3.3 times Adjusted EBITDA, according to the press release statement.

In other recent news, The GEO Group, Inc. completed the sale of its Lawton Correctional Facility in Oklahoma to the State of Oklahoma for $312 million. The company plans to use $222 million of the net proceeds to repay senior secured debt and to acquire the Western Region Detention Facility in San Diego for $60 million. This acquisition is expected to close soon and will be a property exchange that includes the transfer of facility operations. Additionally, S&P Global Ratings has upgraded The GEO Group to ’BB-’ from ’B+’, citing improved operating performance and significant debt reduction. The company has expanded its Revolving Credit Facility from $310 million to $450 million, extending the maturity date to 2030 and reducing the interest rate on revolving credit loans. In leadership news, GEO Group extended the employment term of Executive Chairman George C. Zoley to 2029, with increased bonuses for top officers. The San Diego facility, currently leased by GEO, generates about $57 million in annualized revenues under a contract with the U.S. Marshals Service. These developments mark significant strategic and financial adjustments for the company.

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