GEO Group Q3 Revenue Rises 12% as Adjusted EBITDA Reaches $145 Million

The GEO Group, Inc. (NYSE: GEO) reported higher third-quarter 2026 revenue and adjusted earnings, supported by growth in its secure-services and managed-only operations. Revenue increased 11.5% year over year to $761.1 million, while adjusted EBITDA rose 21.0% to $145.3 million.

GAAP net income attributable to GEO operations fell to $49.2 million, or $0.37 per diluted share, from $173.9 million, or $1.24 per share, a year earlier. The comparison reflects a $232.4 million pre-tax gain on asset divestitures and impairment recorded in the third quarter of 2025. On an adjusted basis, net income increased to $51.8 million, or $0.39 per diluted share, from $35.0 million, or $0.25 per share.

Operating income rose to $102.4 million from $40.7 million. The prior-year period included a $37.6 million contingent litigation reserve, while no comparable reserve was recorded in the latest quarter. Net operating income, a non-GAAP measure, increased 20.2% to $213.9 million.

Secure and managed operations drive growth

Owned and leased secure-services revenue increased 12.6% to $408.9 million, while the segment’s net operating income rose 29.1% to $114.8 million. Occupancy in the portfolio was 93%, compared with 88% in the prior-year quarter, and compensated mandays increased to 3.12 million from 3.03 million.

Managed-only revenue advanced 19.0% to $195.8 million, with net operating income rising 26.1% to $33.5 million. Occupancy was 97%, compared with 96% a year earlier, while compensated mandays increased to 2.02 million from 1.91 million.

Owned and leased reentry-services revenue grew 8.5% to $44.2 million, and net operating income increased to $15.9 million from $12.8 million. Electronic monitoring and supervision services generated revenue of $81.8 million, up slightly from $80.5 million, while net operating income was broadly stable at $40.3 million. Revenue from non-residential services and other activities declined to $30.3 million from $33.3 million.

For the first nine months of 2026, GEO generated $2.20 billion in revenue, up 14.3% from the prior-year period. Adjusted EBITDA increased to $418.7 million from $338.5 million, and adjusted net income rose to $139.2 million, or $1.05 per diluted share, from $85.3 million, or $0.61 per share.

2026 outlook and capital spending

GEO expects full-year 2026 revenue of $2.975 billion to $3.025 billion and adjusted EBITDA of $568 million to $573 million. The company projects net income attributable to GEO of $5.49 to $5.53 per diluted share and adjusted net income of $1.40 to $1.44 per diluted share. The outlook excludes any potential impact from one-time legal settlements.

Full-year capital expenditures are expected to total $140 million to $150 million, including $23.5 million to $25 million for growth, $34 million to $36 million for technology and $82.5 million to $89 million for facility maintenance. Third-quarter capital spending was $27.0 million, compared with $19.6 million in the second quarter.

Cash and cash equivalents stood at $216.0 million as of September 30, up from $69.0 million at the end of 2025. Long-term debt declined to $1.53 billion from $1.65 billion over the same period. On an adjusted basis reflecting subsequent transactions through October 28, GEO reported net leverage of 1.14 times and no outstanding borrowings under its $550 million revolving credit facility.

Adelanto sale and portfolio changes

On October 2, GEO completed the $950 million sale of the Adelanto West and Adelanto East ICE Processing Centers and the Desert View Annex, representing 2,644 beds. The company received $911 million in net proceeds and expects to continue providing support services at the facilities under its existing contract.

GEO’s global portfolio comprised 97 facilities and approximately 75,900 beds as of November 5, including active and idle capacity. Two facilities with 2,508 beds were under activation, while the company listed 2,876 idle beds across secure-services and reentry properties.

Customer concentration remains a material operating consideration. U.S. Immigration and Customs Enforcement accounted for 52% of GEO’s revenue in the first nine months of 2026, followed by state customers at 19% and the U.S. Marshals Service at 15%. GEO also cautioned that its future results remain subject to risks and uncertainties that could cause actual performance to differ materially from its expectations.