CoreCivic Q2 Earnings Call Highlights

CoreCivic exceeded second-quarter earnings expectations, reporting adjusted EPS of $0.38 and adjusted EBITDA of $109.4 million. Excluding prior-year Employee Retention Credits, adjusted EPS rose 35.7% and adjusted EBITDA increased 19.3% year over year. The company sold four facilities to government partners for approximately $2.23 billion in gross proceeds, expecting about $1.6 billion after taxes and transaction costs. CoreCivic used proceeds to repay debt and plans to allocate a substantial portion of the remaining cash toward share repurchases, with total authorization now at $1.2 billion. CoreCivic raised its 2026 adjusted EPS outlook to $1.62–$1.70 and expects GAAP EPS of $15.00–$15.20, largely reflecting facility-sale gains, but lowered adjusted EBITDA guidance to $440.5–$445.5 million due partly to potential contract changes after the sales. CoreCivic reported second-quarter 2026 results that exceeded average analyst estimates for adjusted earnings per share and adjusted EBITDA, while outlining a series of facility sales, debt repayments and expanded share-repurchase capacity. President and Chief Executive Officer Patrick Swindle said the company sold four facilities to government partners for combined gross proceeds of about $2.23 billion. The transactions include the California City Detention Facility and Otay Mesa Detention Center in California, sold to the Department of Homeland Security for $1.5 billion, as well as the Midwest Regional Reception Center in Kansas and Prairie Correctional Facility in Minnesota, sold for $734 million. CoreCivic generated GAAP earnings per share of $0.37 in the second quarter and funds from operations, or FFO, of $0.63 per share. Adjusted EPS, excluding acquisition-related expenses, was $0.38, compared with $0.36 in the prior-year quarter. Normalized FFO was $0.64 per share, up from $0.59 a year earlier. Chief Financial Officer David Garfinkle noted that the prior-year quarter included $11.6 million in Employee Retention Credits, including interest. Excluding that benefit, adjusted EPS increased 35.7% and normalized FFO per share increased 25.5% year over year. Adjusted EBITDA totaled $109.4 million, compared with $103.3 million in the second quarter of 2025. Excluding the prior-year Employee Retention Credit benefit, adjusted EBITDA increased $17.7 million, or 19.3%. The company redefined its operating and reportable segments during the quarter. The CoreCivic Residential segment now includes 64 correctional, detention and reentry facilities. The CoreCivic Services segment includes pharmaceutical supplies and services through Clinical Solutions Pharmacy, transportation through TransCor, and electronic monitoring and case-management services through Recovery Monitoring Solutions. The CoreCivic Property segment, consisting of five facilities leased to government agencies, was unchanged. Residential operating margins declined to 22.4% from 26.1% a year earlier, primarily because the prior-year period included Employee Retention Credits. Excluding those credits, the prior-year margin was 24.5%. Garfinkle said lower ICE populations during the second quarter and the ramp-up of newly activated facilities also affected margins. Total occupancy in the Residential segment was 78.4%, up 1.6 percentage points from the prior-year quarter.