GEO

• New ICE Contract Wins and Facility Expansion

  • In 2025, GEO won the largest annual amount of new business in company history, totaling ~$520 million in projected annual revenue, including $280 million in annual revenue from new ICE detention contracts adding 6,000 beds, bringing total active ICE beds to 27,000.
  • Two new five-year ICE contracts were recently awarded to reactivate idle facilities: the 1,188-bed Bighorn facility (Colorado) projected to generate $85 million annual revenue, and the 1,320-bed Rivers facility (North Carolina) projected to generate $80 million annual revenue. ICE will reimburse all reactivation capital and startup costs, with full activation expected by end-2026 and normalized earnings contribution starting in early 2027. After activation, total contracted ICE beds will reach 29,500.
  • GEO holds an additional 4,500 idle high-security beds across five owned facilities, which could generate ~$250 million in incremental annual revenue at full occupancy; active discussions are ongoing with ICE for potential reactivation.
  • The passage of the Secure America Act restored long-term ICE funding, and GEO expects to participate in the federal goal of expanding national immigration detention capacity to 100,000+ beds via consolidation into fewer, larger facilities.

• Secure Transportation Services Growth

  • Significant expansion was delivered in Q2 2026 for both ICE and U.S. Marshals Service: a new five-year U.S. Marshals contract covering 26 judicial districts across 14 states was implemented, seven ICE facilities saw expanded ground transportation contracts, and air transportation subcontract volumes continued steady growth. The new Bighorn and Rivers contracts will add an additional $20 million in combined annual transportation revenue once normalized.

• ISAP 5 Electronic Monitoring Program Trends

  • The program currently serves ~184,000 total participants, with a continued ongoing shift to higher-priced, higher-margin services: GPS ankle monitor participants grew from 17,000 in early 2025 to 54,000 currently, and case management services now cover ~116,000 participants. This mix shift is driving revenue and earnings growth even with flat total participation, and the program can scale to higher total counts if demand increases.
  • No revenue was recognized from the new skip tracing contract in Q2 2026 due to the prior government shutdown funding lapse; GEO expects ramping to begin in H2 2026 following funding restoration.

• Capital Structure and Share Repurchases

  • In Q2 2026, GEO repurchased ~1.6 million shares for ~$37 million. Since the $500 million August 2025 repurchase authorization, GEO has repurchased 10.1 million shares for ~$177 million, leaving ~$323 million remaining. GEO views its stock as significantly undervalued, making repurchases an attractive use of capital to enhance shareholder value.
  • Net debt fell to ~$1.5 billion at end-Q2 2026, with net leverage below 3x adjusted EBITDA and total available liquidity of ~$300 million.

• Potential ICE Facility Acquisition Program

  • ICE is currently planning to purchase privately owned turnkey processing centers, with 4 CoreCivic facilities already acquired for >$2.2 billion. GEO expects the total number of facilities targeted for acquisition may grow beyond the originally contemplated 10. GEO owns and operates 23 ICE detention facilities, and is pursuing potential facility sales to ICE while retaining long-term support services operations for the sold assets. If transactions close, proceeds will be used for debt reduction, additional share repurchases, and general corporate purposes, representing a potential significant liquidity and shareholder value-enhancing event.

• Full year 2026 guidance was upwardly revised from prior levels: GAAP net income is now guided to a range of $168 million to $175 million ($1.27 to $1.32 per diluted share), with total annual revenue of $2.95 billion to $3.05 billion. Adjusted EBITDA guidance was increased to a range of $550 million to $560 million.
• Updated guidance does not include any earnings contribution from the new Bighorn and Rivers facilities (expected to contribute in early 2027) or the two Florida managed-only contracts (Graceville and Bay), which have been rescheduled to transition to GEO on July 1, 2027. Guidance assumes only moderate labor cost savings in H2 2026, leaving room for additional upside.
• Total unreimbursed capital expenditures for 2026 are guided to between $135 million and $145 million, with expected capital expenditures declining to below $100 million in 2027.
• Q3 2026 preliminary guidance: GAAP net income of $45 million to $48 million ($0.35 to $0.37 per diluted share), with quarterly revenue of $755 million to $805 million, and adjusted EBITDA of $140 million to $145 million.
• Q4 2026 preliminary guidance: GAAP net income of $37 million to $41 million ($0.28 to $0.31 per diluted share).
• GEO identifies multiple potential upside sources for 2026 results that are not included in base guidance: reactivation of additional idle ICE beds, higher overall occupancy at active facilities, accelerated mix shift growth in the ISAP program, further transportation services growth, and ramp-up of the skip tracing contract.

1. Owned and Leased Secure Services: Q2 2026 revenue increased by ~$55 million (16% YoY). Growth came from activating three company-owned facilities under new ICE contracts, partially offset by revenue loss from the sale of the Lawton, Oklahoma facility and depopulation of the Lee County, New Mexico facility. This segment contributed 75% of total net Q2 revenue growth.
2. Manage-only Contracts: Q2 2026 revenue increased by ~$44 million (30% YoY), driven by the joint venture for the North Florida ICE detention facility and growth in transportation revenues categorized under this segment.
3. Reentry Services: Q2 2026 revenue saw a net flat result overall, with a $3 million increase in core reentry services offset by a $3 million decline in non-residential services compared to Q2 2025.
4. Electronic Monitoring and Supervision Services: Q2 2026 revenue decreased by less than $3 million (~3.5% YoY), despite reduced pricing on the ISAP 5 contract. This mild decline demonstrates the positive impact of the ongoing favorable shift to higher-priced monitoring technology and case management in the program.

Overall Q2 2026 total revenue was $732.1 million, a 15% increase YoY. Net income was $47.5 million ($0.36 per diluted share), a 63% YoY increase; adjusted EBITDA was $142 million, a 20% YoY increase.

• There is no definitive agreement or guaranteed timeline for potential ICE purchases of GEO-owned facilities, and there is no assurance any such transactions will be completed.
• Timing of U.S. federal government procurement and asset transaction processes is inherently uncertain, and scheduled contract or transaction close timelines may be delayed beyond current projections.
• Future policy shifts related to U.S. immigration enforcement could change demand for GEO's detention, monitoring, and transportation services, impacting projected revenue growth.
• The delayed transition of the two Florida managed-only contracts due to unresolved state budget issues removes expected 2026 revenue that would have contributed to full year results, even with the overall guidance increase.

Q: Why were the two Florida managed-only contracts pushed back a year to July 2027, and does this delay mean base guidance would have been even higher without the pushout? / A: Unresolved state budgetary issues required the extension to the 2027 launch date. The analyst's assumption that 2026 guidance would have been higher if the contracts had launched as originally scheduled is correct. / Q: Is ICE covering reactivation CapEx for new facilities a new practice, and how does this impact your 2026 and future CapEx guidance? / A: ICE covering reactivation CapEx is relatively new for GEO. Most of the required startup CapEx for current planned ICE facility expansions has already been spent, and after end-2026, GEO will only have normal ongoing maintenance CapEx with no large unusual startup expenditures, which explains the projected 2027 CapEx decline. / Q: ISAP total participation has stayed flat for two years, well below prior projected highs of ~400,000 participants. Why is this, and when could participation grow? / A: ICE's current policy priority is expanding detention capacity to hit the 100,000 bed target first. After that goal is met, and depending on future policy shifts around immigration enforcement, ISAP participation could increase dramatically as early as next year. / Q: If GEO sells facilities to ICE, what is your planned capital allocation for proceeds, and what is your target net leverage after sales? / A: Current debt agreements require some proceeds to first be used for debt repayment to comply with covenants. After meeting those requirements, GEO plans to deploy most of the remaining proceeds to returning capital to shareholders, primarily via additional share repurchases.