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 normalized FFO per share up 23%; nine-month revenue reached $1,482.4 million, net income $49.6 million.

• Adjusted EBITDA for Q3 2024 was $83.3 million, up 11% year-over-year; operating margin improved to 24.9% from 21.3% year-over-year.

• Federal partners, mainly ICE and US Marshals, contributed over half of total revenue; ICE revenue declined 3.4% but rose 10.9% excluding South Texas contract termination.

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

• ICE contract termination at South Texas Family Residential Center and lease expiration at California City Correctional Center impacted revenue and outlook.

Financial highlights

• Q3 2024 net income was $21.1 million ($0.19/share); adjusted EPS was $0.20; normalized FFO per share was $0.43; AFFO per share was $0.42.

• Adjusted EBITDA for Q3 2024 was $83.3 million; nine-month adjusted EBITDA was $256.7 million.

• Debt was reduced by $75.6 million in Q3; leverage at 2.2x net debt/adjusted EBITDA.

• Cash on hand was $108 million, with $257 million available on a revolving credit facility.

• Weighted average shares outstanding decreased 3% year-over-year due to share repurchases.

Outlook and guidance

• 2024 adjusted EPS guidance raised to $0.69–$0.75; normalized FFO per share to $1.59–$1.65; AFFO guidance increased to $177.8–$185.8 million ($1.58–$1.65/share).

• Full-year 2024 net income guidance raised to $55.5–$61.5 million; adjusted net income guidance to $78.0–$84.0 million; adjusted EBITDA guidance to $317.0–$321.0 million.

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

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

• Debt reduction prioritized over share repurchases following ICE contract termination.