CoreCivic (CXW) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $490.1 million, up 6% year-over-year, driven by higher occupancy, per diem rates, and effective cost management across federal, state, and local partners.

• Net income for Q2 2024 was $19.0 million ($0.17 per diluted share), with adjusted EPS at $0.20, both up from the prior year.

• Normalized FFO per share rose 27% to $0.42, and adjusted EBITDA increased 16% to $83.9 million.

• ICE will discontinue use of the South Texas Family Residential Center as of August 9, 2024, impacting future revenue and margins.

• The company operates 43 correctional/detention facilities, 23 residential reentry centers, and 6 properties for lease, with a total design capacity of 80,000 beds.

Financial highlights

• Q2 2024 revenue: $490.1M (+6% YoY); six-month revenue: $990.8M (+7.5% YoY).

• Q2 2024 net income: $19.0M; diluted EPS: $0.17; adjusted diluted EPS: $0.20.

• Adjusted EBITDA for Q2 2024 was $83.9 million, up 16% year-over-year.

• Normalized FFO per share was $0.42; AFFO per share was $0.40 for Q2 2024.

• Operating margin for safety and community segments improved to 23.7% from 20.6% year-over-year.

Outlook and guidance

• 2024 adjusted EPS guidance: $0.58–$0.66; normalized FFO per share: $1.48–$1.56; adjusted EBITDA: $302.4–$308.4 million.

• Guidance reflects the South Texas contract termination, with $0.08/share expected in Q3 and none in Q4.

• Free cash flow will be prioritized for debt reduction following the STFRC contract termination, with share repurchases at management's discretion.

• Federal populations expected to remain stable for the rest of 2024; upside possible if detention populations rise.

• Maintenance capex for 2024 projected at $62–$66 million; total capex at $70–$76 million.