GEO Reports First Quarter 2025 Results
The GEO Group, Inc., a major provider of essential services to secure facilities, processing centers, and reentry programs, today announced its financial results for the first quarter of 2025. The company also outlined recent operational developments and updated its financial outlook for the remainder of the year.
Q1 2025 Financial Overview
For the first quarter ending March 31, 2025, GEO reported total revenues of $604.6 million, nearly unchanged from $605.7 million in Q1 2024. Net income attributable to GEO was $19.6 million, translating to $0.14 per diluted share, down from $22.7 million, or $0.14 per share, in the same period last year. Adjusted EBITDA—a key measure of core operating performance—stood at $99.8 million, compared to $117.6 million for the first quarter of 2024.
The modest decline in profitability and Adjusted EBITDA was largely attributed to a $5 million increase in general and administrative expenses. This rise in overhead was tied to the company’s strategic reorganization efforts to prepare for anticipated growth initiatives in 2025. Furthermore, payroll taxes, which are typically front-loaded in the first quarter, added approximately $6 million in expenses compared to the fourth quarter of 2024.
Leadership Commentary and Strategy
George C. Zoley, Executive Chairman of GEO, emphasized the long-term positioning of the company for robust growth.
“We are pleased with the progress made toward our capital allocation and growth objectives,” said Zoley. “In Q1, we secured two major contract awards for reactivating two GEO-owned facilities totaling 2,800 beds, representing more than $130 million in annualized revenues.”
He added that these contracts underscore the company’s readiness to support the U.S. federal government’s evolving immigration enforcement priorities. To meet these expanding needs, GEO has committed a $70 million investment aimed at increasing its detention and monitoring capabilities. Additionally, a senior management reorganization was finalized to ensure optimal execution of these strategic initiatives.
Zoley further noted, “2025 is shaping up to be a year of two halves. The first half reflects higher costs from repositioning efforts, while the second half is expected to benefit from new revenue streams as contract awards are implemented. We are also prioritizing debt reduction and evaluating potential capital returns to shareholders.”
Updated 2025 Financial Guidance
GEO has revised its full-year 2025 guidance to reflect the anticipated phasing of costs and revenues. While the first half will be burdened with increased overhead and capital expenditures, growth is expected to ramp up in the latter half.
The company now expects:
- Full-year revenues: Approximately $2.53 billion
- Net income attributable to GEO: Between $0.77 and $0.89 per diluted share
- Full-year Adjusted EBITDA: Between $465 million and $490 million
- Effective tax rate: Approximately 27%, inclusive of discrete items
- Capital expenditures: Between $120 million and $135 million, including the previously disclosed $70 million investment
For the second quarter of 2025, GEO anticipates:
- Revenues: Between $615 million and $625 million
- Net income per diluted share: Between $0.15 and $0.17
- Adjusted EBITDA: Between $110 million and $114 million
Although the guidance does not reflect the financial impact of future, unannounced contract wins, GEO indicated that several opportunities are likely to materialize during the year. Additional updates to the outlook will be provided as these contracts are finalized.
Operational Developments and Key Contracts
During Q1 2025, GEO secured multiple high-value contracts that are expected to drive revenue growth and strengthen its partnership with U.S. Immigration and Customs Enforcement (ICE).
Delaney Hall Facility – Newark, New Jersey
On February 27, 2025, GEO signed a 15-year contract with ICE to operate a new federal immigration processing center at its 1,000-bed Delaney Hall Facility. The agreement includes exclusive facility use, comprehensive security, food and medical services, and legal and recreational access. The contract is projected to generate over $60 million in annualized revenue once fully operational, with profit margins consistent with GEO’s other company-owned secure service facilities.
Karnes ICE Processing Center – Karnes City, Texas
On March 10, 2025, GEO announced a modification to its existing intergovernmental service agreement for the 1,328-bed Karnes ICE Processing Center. Initially planned to transition from housing single adults to mixed populations, ICE ultimately opted to maintain the facility for single adult detainees, in response to its current operational needs.
North Lake Facility – Baldwin, Michigan
Another major development came on March 20, 2025, when GEO reached an agreement with ICE for the immediate activation of its 1,800-bed North Lake Facility. This federal immigration processing center is expected to yield more than $70 million in annualized revenues. A multi-year support services contract is being finalized and will include comprehensive facility management, including security, medical services, and legal support.
Balance Sheet and Liquidity Position
As of March 31, 2025, GEO reported net debt of approximately $1.68 billion, reflecting a net leverage ratio of 3.78x Adjusted EBITDA. The company held approximately $65 million in cash and cash equivalents and had about $235 million in total available liquidity.
GEO reaffirmed its commitment to improving its balance sheet and reducing leverage. For the full year 2025, the company aims to reduce net debt by $150 million to $175 million, bringing total net debt closer to $1.54 billion by year-end.
