GEO Group Raises 2026 Outlook After $950M Adelanto ICE Complex Sale

GEO Group raised its full-year 2026 profit outlook on Thursday, a month after selling its three-building immigration detention complex in Adelanto, California, to the federal government for $950 million. The Boca Raton, Florida-based operator said third-quarter revenue climbed 12% to $761.1 million from $682.3 million a year earlier, according to its earnings release furnished to the Securities and Exchange Commission.

• Net income attributable to GEO Operations: $49.2 million, or $0.37 per diluted share, versus $173.9 million, or $1.24, a year earlier, when results included gains on asset sales
• Adjusted net income: $51.8 million, or $0.39 per share, up 48% from $35.0 million
• Adjusted EBITDA: $145.3 million, up 21% from $120.1 million
• Nine-month revenue: $2.2 billion, up 14%

The company called the period the highest quarter for revenue and adjusted EBITDA in its history. The Associated Press reported that adjusted earnings beat the 35-cents-per-share average estimate of three analysts surveyed by Zacks Investment Research, while revenue fell short of the $777.6 million they expected.

Adelanto deal and new ICE contracts

On Oct. 2, GEO completed the sale of the 1,280-bed Adelanto West and 660-bed Adelanto East ICE Processing Centers and the 704-bed Desert View Annex to the United States through the Department of Homeland Security. Net proceeds were about $705 million after taxes and fees. GEO said it expects to keep providing support services there under its existing ICE contract, which runs through Dec. 19, 2034, and that it is in talks to sell other company-owned facilities to ICE, with no definitive agreement or timeline.

The company also listed new or expanded ICE work this year: a five-year contract at the Big Horn Facility in Hudson, Colorado, worth about $85 million a year; a five-year contract at the Rivers Facility in Winton, North Carolina, worth about $80 million; support services at the Big Spring Complex in Texas, expected to bring about $200 million a year; and a new 10-year contract at the Northwest ICE Processing Center in Tacoma, Washington, worth about $140 million annually.

Higher guidance, lower debt

GEO now expects 2026 revenue of $2.975 billion to $3.025 billion, adjusted net income of $185 million to $190 million, or $1.40 to $1.44 per share, and adjusted EBITDA of $568 million to $573 million. Its forecast for net income attributable to GEO Operations rose to $726.3 million to $730.5 million, which includes the Adelanto gain expected in the fourth quarter.

The company used the sale proceeds to redeem its $650 million of 8.625% senior secured notes due 2029, leaving $625 million of corporate debt in 10.250% notes due 2031. The board raised the buyback authorization to $1.25 billion in October. As of Nov. 5, GEO had repurchased about 10.1 million shares for roughly $177 million, leaving about $1.07 billion available and about 132 million shares outstanding. Management scheduled a conference call for 1 p.m. Eastern time Thursday.

Sources: The GEO Group Exhibit 99.1 (SEC EDGAR), Associated Press via WTOP