The GEO Group Reports Revenue Growth in Q2 2025 Despite Decline in Operating Income

The GEO Group, Inc. reported a notable increase in financial performance for the second quarter and first half of 2025, as detailed in its latest 10-Q filing. For the three months ended June 30, 2025, the company generated revenues of $636.2 million, a 4.8% increase from $607.2 million in the same period of 2024. The six-month revenue figures also reflected growth, reaching $1.24 billion compared to $1.21 billion in the prior year. Despite the revenue growth, the company experienced a decline in operating income, which fell to $72.0 million for the second quarter, down from $80.1 million a year earlier, and to $133.0 million for the first half, compared to $159.7 million in 2024.

The filing highlighted several strategic developments, including the completion of a significant asset sale and acquisition. GEO sold the Lawton Correctional Facility in Oklahoma for $312 million, resulting in a gain of approximately $228 million, and subsequently acquired the Western Region Detention Facility in San Diego for about $60 million. These transactions are part of GEO's ongoing strategy to optimize its portfolio and enhance operational efficiency. The company also reported an increase in its employee headcount, reflecting its commitment to expanding service capabilities.

Operationally, GEO managed approximately 77,000 beds across 98 facilities as of June 30, 2025, with an average occupancy rate of 89%. The company noted a slight decrease in compensated mandays in its U.S. Secure Services segment, which totaled approximately 4.2 million in the second quarter of 2025, down from 4.3 million in the same quarter of 2024. The U.S. Secure Services segment remained the largest contributor to revenue, generating $441.7 million in the second quarter, up 9.8% year-over-year. However, the Electronic Monitoring and Supervision Services segment saw a revenue decline of 6.9%, attributed to decreased participant counts.

Looking ahead, GEO expressed optimism about future growth opportunities, particularly in response to federal government initiatives aimed at expanding immigration enforcement. The company plans to invest significantly in capital expenditures to enhance its service delivery capabilities. However, it also acknowledged potential challenges, including budgetary constraints and the need to navigate contract modifications and terminations. The company remains focused on maintaining compliance with its debt covenants and managing its financial resources effectively to support ongoing operations and strategic initiatives.