CoreCivic (CXW) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $491.6 million, up 2% year-over-year, with net income rising 52% to $21.1 million and adjusted EBITDA up 11% to $83.3 million; nine-month revenue was $1,482.4 million, up 5.5% year-over-year.

• Normalized FFO per share rose 23% to $0.43, and AFFO per share was $0.42; diluted EPS was $0.19.

• Federal partners, mainly ICE and US Marshals, contributed just over half of total revenue; ICE revenue declined 3.4% but increased 10.9% excluding South Texas Family Residential Center, which was terminated in August 2024.

• State and local revenues grew, with new contracts in Wyoming, Montana, Hinds County (MS), and Harris County (TX) boosting results.

• Occupancy in Safety and Community segments rose to 75.2% from 72% year-over-year, supporting margin improvement.

Financial highlights

• Q3 2024 net income was $21.1 million ($0.19/share), up from $13.9 million in Q3 2023; adjusted EPS was $0.20.

• Adjusted EBITDA was $83.3 million, up from $75.2 million in Q3 2023.

• Operating margin in Safety and Community segments improved to 24.9% from 21.3% year-over-year.

• Debt was reduced by $75.6 million in Q3; leverage at 2.2x net debt/EBITDA, below the long-term target.

• $108 million cash on hand and $257 million available on a revolver, totaling $365 million in liquidity.

Outlook and guidance

• 2024 adjusted EPS guidance raised to $0.69–$0.75; normalized FFO per share to $1.59–$1.65; net income guidance raised to $55.5–$61.5 million.

• Guidance assumes stable federal populations; upside possible if detention populations rise.

• AFFO expected at $177.8–$185.8 million ($1.58–$1.65/share), up from prior guidance.

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

• Management prioritizes debt reduction over share repurchases following ICE contract termination.