CoreCivic’s second quarter results received a favorable market reaction, as the company delivered performance above Wall Street expectations. Management attributed the quarter’s strength to higher federal and state populations, particularly increased demand from Immigration and Customs Enforcement (ICE) and new contracts with the State of Montana. CEO Damon Hininger noted that the unprecedented surge in ICE detention populations, combined with ongoing facility activations and expanded state partnerships, led to double-digit growth in key profitability metrics. The return to operations at facilities like Dilley and new contract wins were central to the company’s revenue and margin expansion.
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CoreCivic (CXW) Q2 CY2025 Highlights:
- Revenue: $538.2 million vs analyst estimates of $495.6 million (9.8% year-on-year growth, 8.6% beat)
- Adjusted EPS: $0.36 vs analyst estimates of $0.21 (73.1% beat)
- Adjusted EBITDA: $103.3 million vs analyst estimates of $82.22 million (19.2% margin, 25.7% beat)
- Adjusted EPS guidance for the full year is $1.11 at the midpoint, beating analyst estimates by 17.6%
- EBITDA guidance for the full year is $368 million at the midpoint, above analyst estimates of $342.7 million
- Operating Margin: 12%, up from 9.9% in the same quarter last year
- Average available beds : 70,330, up 932 year on year
- Market Capitalization: $2.22 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From CoreCivic’s Q2 Earnings Call
- Joseph Anthony Gomes (NOBLE Capital): Asked whether alternative detention solutions—like soft-sided or military base facilities—slow CoreCivic’s contracting. CEO Damon Hininger replied that demand remains robust for all solutions, but funding and ICE’s prioritization of secure, long-term options play to CoreCivic’s strengths.
- Jason Price Weaver (JonesTrading): Inquired about efficiency gains in facility activations. President Patrick Swindle explained that preemptive investments in staffing and infrastructure enabled rapid, smooth activations, and the company is well-positioned if demand accelerates further.
- Marla Marin (Zacks): Sought clarification on CoreCivic’s competitive advantages versus new alternatives like Alligator Alcatraz. Hininger argued that CoreCivic’s facilities are more secure, cost-effective, and compliant with stringent ICE standards, while alternatives are seen as short-term solutions.
- Ben Briggs (StoneX Financial): Asked about the revenue potential from activating all idle beds and about transportation capabilities. CFO David Garfinkle estimated up to $500 million in incremental revenue from 13,400 idle beds and described expanded investment in transportation assets to serve shifting enforcement priorities.
- Jay McCanless (Wedbush): Questioned the timing for occupancy to reach the mid-80% range. Garfinkle said ramping new contracts and filling idle capacity could push occupancy into the low 80s by year-end, with further gains as additional contracts are signed.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace of facility activations and progress on contract negotiations for idle sites, (2) the impact of new federal funding on both ICE and U.S. Marshals Service populations, and (3) CoreCivic’s ability to manage start-up costs while scaling occupancy and margins. The resolution of legal disputes affecting facility activation will also be a key signpost.
CoreCivic currently trades at $20.75, up from $19.60 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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