CoreCivic, Inc. Q2 FY2025 earnings call

Business Climate: Business aligned with government needs for detention solutions. ICE detention populations were at record highs, and state partners faced correctional challenges. ### Financial Highlights: Total revenue increased 9.8% y-o-y. Adjusted EBITDA for the quarter was $103.3 million, up 23.2% from prior year. GAAP net income and adjusted net income saw double or triple-digit increases. ### Reactivation Activities: Resumed operations at Dilley Immigration Processing Center, with full reactivation expected by end of third quarter. Entered Letter Contracts to reactivate California City and Midwest Regional Reception Centers. Completed acquisition of Farmville Detention Center in Virginia. ### Government Funding: Congress passed the One Big Beautiful Act, appropriating $75 billion for ICE, including $45 billion for detention capacity, which will drive demand. ### Legal Updates: Third Circuit Court of Appeals upheld a judgment allowing New Jersey to not block private immigration detention facilities like Elizabeth Detention Center.

Federal partners, primarily Immigration and Customs Enforcement and the U.S. Marshals Service, comprised 50% of CoreCivic's total revenue in the second quarter. Revenue from federal partners increased 11% during the second quarter of 2025 compared with the prior year quarter. Excluding the Dilley Immigration Processing Center, federal revenue increased 19%. Revenue from ICE increased $25.9 million or 17%, while revenue from the U.S. Marshals Service was up $2.7 million or 3%. Revenue from state partners increased $9.9 million or 5% from the prior year quarter, including additional revenue from the State of Montana. Total occupancy for the Safety and Community segments for the quarter was 76.8%, up 2.5 points from the year ago quarter. Excluding the California City immigration processing center, occupancy would have been 79.7%. The average daily population across all facilities managed was 54,026 during the second quarter of 2025, compared with 51,541 in the prior year quarter.

Adjusted EBITDA: Expected to be $365 million to $371 million. ### EPS: Expected to be $1.07 to $1.14. ### FFO: Expected to be $1.99 to $2.07. ### Share Repurchases: Board authorized increase to share repurchase program to $500 million. Repurchased 2 million shares in the second quarter. ### Facility Activations: Guidance reflects assumptions around activation of facilities like California City, with potential upside if contracts are more favorable. Guidance for Midwest Regional Reception Center is affected by a lawsuit, but could have upside if litigation is resolved quickly.

Legal Challenges: Intake process at Midwest Regional Reception Center delayed by a lawsuit, uncertainty in resolution. ### Contract Uncertainty: Timing of government actions on new contracts is difficult to predict, especially for idle facility activations. ### Alternative Solutions: Competition from soft-sided facilities and international solutions, which have different standards and may be seen as short-term.

Q: Joe Gomes asked about alternative solutions like soft-sided facilities and CoreCivic's interest in participating.

A: Damon Hininger and Patrick Swindle discussed demand shifts, supply side investments, and CoreCivic's capabilities to provide detention solutions.

Q: Jason Weaver asked about efficiency gains in activating new facilities.

A: Patrick Swindle said preparation work in late 2024 allowed smooth activations and positioned CoreCivic to meet demand.

Q: Marla Marin asked about advantages of CoreCivic's facilities vs. others.

A: Damon Hininger and Patrick Swindle discussed cost-effectiveness, comprehensive standards, and long-term suitability of CoreCivic's facilities.

Q: Ben Briggs asked about transportation capabilities and revenue from transport.

A: David Garfinkle and Patrick Swindle discussed increased investment in transportation assets and transport being baked into contracts.

Q: Mason Bourne asked about reported beds from ICE and conservatism in guidance.

A: Damon Hininger and Patrick Swindle discussed tracking bed data and conservatism in guidance considering contract uncertainties.

Q: Jay McCanless asked about revenue opportunities from border funds and letter contracts.

A: Damon Hininger discussed expected acceleration of contracting activity now that funding is in place.

Q: Greg Gibas asked about fourth and fifth idle facility discussions.

A: Damon Hininger said discussions are ongoing but not at a point to reveal details.

Q: Raj Sharma asked about electronic monitoring business and readiness for ICAP contracts.

A: Damon Hininger and Patrick Swindle discussed focus on detention and CoreCivic's readiness for potential ICAP contracts.

Q: Jordan Hymowitz asked about EBITDA margins and ISAP contract.

A: Damon Hininger discussed margin expectations and uncertainty around ISAP contract procurement.