GEO Raises Profit Outlook as Margins Expand
Second-quarter revenue rose 15% to $732.1 million.
The GEO Group (GEO), the secure-facilities operator, raised its full-year profit outlook after second-quarter operating income climbed 41% and margins widened.
The quarter extended GEO’s earnings growth while marking a slowdown from the first quarter. Adjusted EBITDA rose 20% year over year, compared with 32% growth in the prior period, while its margin expanded to about 19.4% from 18.6%.
Revenue increased to $732.1 million from $636.2 million a year earlier, with growth easing from 17% in the first quarter. Net income attributable to GEO Operations rose 63% to $47.5 million, or $0.36 a diluted share, and increased 24% sequentially.
Operating income reached $101.7 million as the operating margin expanded to about 13.9% from 11.3% a year earlier. The improvement outpaced revenue growth even as operating expenses increased to $530.7 million from $475.2 million.
GEO raised its 2026 net-income forecast to $168 million to $175 million, or $1.27 to $1.32 a diluted share, from $153 million to $166 million, or $1.15 to $1.25. Adjusted EBITDA guidance increased to $550 million to $560 million from $525 million to $545 million.
The company narrowed its full-year revenue outlook to $2.95 billion to $3.05 billion, lowering the upper end by $50 million. GEO projects third-quarter revenue of $755 million to $805 million and adjusted EBITDA of $140 million to $145 million, pointing to sequential revenue growth with EBITDA near the second-quarter level.
Two five-year Immigration and Customs Enforcement contracts are expected to generate about $165 million in combined first-full-year annual revenue from the Big Horn and Rivers facilities. Normalized earnings contributions are expected in early 2027, and the contracts were excluded from its 2026 guidance.
GEO repurchased 1.6 million shares for $36.6 million during the quarter, down from $50 million in the first quarter, and had $323 million remaining under its authorization. Long-term debt declined to $1.512 billion from $1.649 billion at the end of 2025, leaving net leverage below three times trailing adjusted EBITDA.