Core Insights - The article emphasizes the importance of identifying companies with the potential to consistently outperform the broader market, focusing on those with robust, consistent, and predictable cash flows [1] - It highlights the significance of combining fundamental analysis with macroeconomic factors to develop a disciplined investment framework [1] - The author expresses a willingness to engage with the investment community to share actionable ideas and insights [1] Company Focus - The investment strategy is sector and asset class agnostic, indicating a broad approach to identifying value across various markets [1] - There is a particular interest in exploring opportunities in the fixed-income market depending on market cycles [1] Macroeconomic Considerations - The article stresses that macroeconomic developments can drive market cycles and influence valuation discounts or premiums [1] - Attention to macroeconomic factors is deemed essential for accurate valuation and sensitivity analysis [1]

Core Insights - The article emphasizes the importance of identifying companies with the potential to consistently outperform the broader market, focusing on those with robust, consistent, and predictable cash flows [1] - It highlights the significance of combining fundamental analysis with macroeconomic factors to develop a disciplined investment framework [1] - The author expresses a willingness to engage with the investment community to share actionable ideas and insights [1] Company Focus - The investment strategy is sector and asset class agnostic, indicating a broad approach to identifying value across various markets [1] - There is a particular interest in exploring opportunities in the fixed-income market depending on market cycles [1] Macroeconomic Considerations - The article stresses that macroeconomic developments can drive market cycles and influence valuation discounts or premiums [1] - Attention to macroeconomic factors is deemed essential for accurate valuation and sensitivity analysis [1]

Core Viewpoint - CoreCivic has appointed Daren Swenson as Executive Vice President and Chief Corrections and Reentry Officer, effective January 1, 2026, to oversee operations for corrections, detention, and reentry facilities [1][2] Leadership Changes - Daren Swenson has been with CoreCivic since 1992, progressing through various leadership roles, and is recognized for his extensive knowledge of the business [2] - The CEO, Damon T. Hininger, expressed confidence in Swenson's leadership during a period of rapid growth for the company [2] - Patrick D. Swindle, President and COO, anticipates Swenson's contributions to operational excellence as the company addresses the needs of government partners [2] Company Overview - CoreCivic is a diversified government-solutions company that provides a range of services including corrections and detention management, alternatives to incarceration, and government real estate solutions [3] - The company is the largest owner of partnership correctional, detention, and residential reentry facilities in the U.S. and has been a reliable partner for government for over 40 years [3] - CoreCivic's employees are committed to high standards of professionalism and public service [3]

Core Points - CoreCivic has amended its Fourth Amended and Restated Credit Agreement to increase the "accordion" feature for uncommitted incremental extensions of credit from $200 million to $300 million and to expand the Revolving Credit Facility from $275 million to $575 million effective December 1, 2025 [1] - The company currently has outstanding borrowings of $165 million under the Revolving Credit Facility, with additional borrowing capacity of $391.4 million after the amendment [1] - CoreCivic's CFO indicated that recent contract awards are expected to lead to significant increases in revenues and cash flows for 2026 and 2027, enhancing the company's balance sheet flexibility for strategic investments and long-term value creation [2] - CoreCivic is the largest owner and one of the largest operators of partnership correctional, detention, and residential reentry facilities in the United States, providing a range of government solutions [3]

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Core Points - CoreCivic's Board of Directors has authorized an increase in its share repurchase program, allowing for an additional $200 million in share buybacks, raising the total authorization from $500 million to $700 million [1] - Since the program's initiation in May 2022, CoreCivic has repurchased 21.5 million shares at a total cost of $322.1 million, averaging $14.98 per share, with $377.9 million remaining for repurchase as of November 7, 2025 [2] - The CEO of CoreCivic expressed confidence that the current share price does not reflect the company's progress and opportunities, emphasizing a commitment to enhancing long-term shareholder value through capital allocation strategies [3] - CoreCivic is a diversified government-solutions company, recognized as the largest owner and one of the largest operators of correctional and detention facilities in the U.S., providing various solutions to government partners [4]

Core Points - CoreCivic reported Q3 CY2025 revenue of $580.4 million, an 18.1% year-on-year increase, exceeding analyst estimates of $541.2 million by 7.3% [1][6] - Non-GAAP profit per share was $0.24, which was 7.7% below the consensus estimate of $0.26 [1][6] - The market reacted negatively to the earnings report, leading to a sharp decline in share price [3] Revenue and Profitability - Revenue growth was attributed to new federal contracts, particularly with Immigration and Customs Enforcement (ICE), and the reactivation of previously idle facilities [3][5] - Start-up costs for newly activated centers and legal delays impacted profitability, contributing to the shortfall in non-GAAP earnings [3][5] - Adjusted EBITDA was reported at $88.83 million, missing analyst expectations of $90.96 million, with a margin of 15.3% [6] Future Guidance - Management lowered full-year Adjusted EPS guidance to $1.03 at the midpoint, reflecting a 6.8% decrease [6] - EBITDA guidance for the full year is set at $357 million at the midpoint, below analyst estimates of $371.5 million [6] - Management anticipates significant earnings growth once stabilized occupancy is achieved in 2026, despite near-term margin pressure from start-up losses [4]

Financial Performance - Net income for Q3 2025 was $26.3 million, or $0.24 per diluted share, compared to $21.1 million, or $0.19 per diluted share in Q3 2024, reflecting a 24.0% increase in net income year-over-year [110]. - Total revenue for Q3 2025 was $580.4 million, an increase of $88.8 million, or 18.1%, from $491.6 million in Q3 2024 [115]. - Total management revenue for the nine months ended September 30, 2025, was $1,593.1 million, an increase of $132.3 million, or 9.1%, compared to $1,460.8 million in the same period of 2024 [116]. - CoreCivic Safety's total revenue increased by $85.8 million, or 18.7%, from $459.3 million in Q3 2024 to $545.1 million in Q3 2025 [136]. - CoreCivic Community's total revenue increased by $2.4 million, or 8.7%, from $28.2 million in Q3 2024 to $30.7 million in Q3 2025, and by $2.1 million, or 2.4%, from $88.4 million in the first nine months of 2024 to $90.5 million in 2025 [148]. - Net income for the nine months ended September 30, 2025, was $87,801, up from $63,503 for the same period in 2024, representing an increase of approximately 38% [185]. - Funds From Operations (FFO) for the nine months ended September 30, 2025, was $164,693, compared to $124,856 for the same period in 2024, indicating an increase of approximately 32% [189]. - Normalized Funds From Operations for the nine months ended September 30, 2025, was $166,367, up from $146,839 in 2024, reflecting an increase of approximately 13% [189]. Revenue and Occupancy - Management revenue increased by $88.2 million, or 18.1%, for Q3 2025, driven by a $45.3 million increase in revenue per compensated man-day, which rose by 8.7% [116]. - Average compensated occupancy for Q3 2025 was 76.7%, up from 75.2% in Q3 2024, indicating improved facility utilization [114]. - Average daily compensated population increased by 4,479, or 8.8%, to 55,236 for the three months ended September 30, 2025, compared to 50,757 for the same period in 2024 [117]. - Federal customers generated approximately 55% of total revenue for the three months ended September 30, 2025, increasing by $70.9 million, or 28.3%, compared to the same period in 2024 [118]. - Average compensated occupancy in the Safety and Community segments increased to 76.7% from 75.2% during the three months ended September 30, 2025, and to 76.8% from 74.9% during the nine months ended September 30, 2025 [117]. Expenses and Costs - Operating expenses totaled $449.6 million for the three months ended September 30, 2025, an increase of $78.8 million, or 21.2%, compared to $370.8 million for the same period in 2024 [122]. - Total expenses per compensated man-day increased to $86.22 during the three months ended September 30, 2025, from $77.02 during the same period in 2024 [127]. - Variable expenses per compensated man-day increased to $22.79 during the three months ended September 30, 2025, from $19.42 during the same period in 2024, representing a 17.4% increase [131]. - Operating expenses increased by $100.5 million, or 9.0%, during the nine months ended September 30, 2025, compared to the same period in 2024 [123]. - General and administrative expenses rose to $45.3 million in Q3 2025 from $41.2 million in Q3 2024, primarily due to increased corporate salaries and benefits [155]. Acquisitions and Investments - The acquisition of the Farmville Detention Center effective July 1, 2025, contributed to the increase in average daily compensated population [117]. - The acquisition of the Farmville Detention Center for $71.4 million is expected to result in total annual incremental revenue of approximately $40 million [145]. - The company completed the repurchase of 5.9 million shares at a total cost of $121.0 million during the nine months ended September 30, 2025 [169]. - The company approved capital expenditures of $97.5 million to $99.5 million for activating previously idled facilities [171]. Debt and Cash Management - As of September 30, 2025, the company had cash on hand of $56.6 million and $191.4 million available under its Revolving Credit Facility [173]. - The company generated $195.0 million in cash from operating activities for the nine months ended September 30, 2025, compared to $229.9 million for the same period in 2024 [177]. - The company reported a net cash flow used in investing activities of $166.8 million for the nine months ended September 30, 2025, primarily due to capital expenditures and the acquisition of the Farmville Detention Center [178]. - As of September 30, 2025, the company had $238.5 million of 4.75% senior unsecured notes and $500.0 million of 8.25% senior notes outstanding [175]. - The total weighted average effective interest rate for the company was 6.9% as of September 30, 2025 [175]. - The company has no debt maturities until October 2027, providing flexibility for future capital management [175]. Market and Operational Insights - The CoreCivic Safety segment accounted for 92.1% of total segment net operating income for Q3 2025, down from 94.3% in Q3 2024 [111]. - Operating margins were negatively impacted by start-up expenses and labor shortages, with a facility operating loss of $3.4 million during Q3 2025 [136]. - CoreCivic anticipates an increase in demand for correctional and detention facilities due to changes in immigration policy and funding levels from the federal government [139]. - The management contract with the state of Montana for inmate care is set to expire on July 31, 2026, with the potential for a total term of up to seven years, currently managing 362 inmates at the Saguaro facility and 239 at the Tallahatchie facility [147]. - The company is exposed to market risk related to interest rates, with a potential increase or decrease in interest expense of $0.4 million and $1.0 million for the three and nine months ended September 30, 2025, respectively, if rates changed by 100 basis points [195].

Financial Data and Key Metrics Changes - In Q3 2025, the company generated GAAP EPS of $0.24 per share and FFO per share of $0.48, with adjusted EPS increasing by 20% from $0.20 in Q3 2024 [21][22] - Adjusted EBITDA rose to $88.8 million, a 6.6% increase from $83.3 million in the prior year quarter [22][23] - The operating margin for safety and community facilities was 22.7%, down from 24.9% in the prior year quarter, but adjusted for startup losses, it was 24% [26] Business Line Data and Key Metrics Changes - Revenue from federal partners, primarily ICE and the U.S. Marshals Service, increased by 28% year-over-year, with ICE revenue up by $76.2 million or 54.6% [13] - Revenue from state partners increased by 3.6%, driven by new contracts with Montana and population increases in Georgia [13][14] - Total occupancy for safety and community segments was 76.7%, up 1.5 percentage points year-over-year [14] Market Data and Key Metrics Changes - Nationwide ICE detention populations reached historical highs of around 60,000, with a 37% increase in ICE populations in company facilities from the end of 2024 to Q3 2025 [8][9] - U.S. Marshals populations slightly declined to just over 6,300, but are expected to increase in 2026 due to anticipated enforcement activities [8][9] Company Strategy and Development Direction - The company is focused on activating idle facilities, with four new contracts expected to generate approximately $320 million in annual revenue once stabilized occupancy is reached [5][19] - The company plans to accelerate share repurchases, indicating a belief that current stock valuation does not reflect the cash flows of the business [11][33] - The company anticipates reaching a run rate EBITDA of at least $450 million once new facilities reach stabilized occupancy in 2026 [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future demand, citing ongoing conversations with state partners and the potential for additional contract awards [9][60] - The company noted that the pace of ICE admissions has remained stable, with expectations for increased enforcement activity [41] - Management acknowledged challenges related to startup activities for new contracts but emphasized the importance of these contracts for future growth [43][30] Other Important Information - The company has five idle facilities containing approximately 7,000 beds, with ongoing discussions about potential future activations [10][60] - The company plans to spend $60-$65 million on maintenance capital expenditures in 2025, unchanged from prior guidance [32] Q&A Session Summary Question: Thoughts on ICE detention pace and government shutdown impact - Management indicated that the pace of admissions and activity in facilities has remained stable, with some increase in transportation demands [39][40] Question: Guidance and updated occupancy projections - Updated guidance reflects startup activities and new contracts, resulting in some operating losses but viewed positively as it includes new contracts [43][44] Question: Share repurchase strategy and leverage goals - Management confirmed plans to be more aggressive with share repurchases, considering current stock price and expected cash flow growth [46][47] Question: Future activations and state demand - Management confirmed ongoing discussions with state partners for potential bed utilization beyond ICE contracts [60][61] Question: Staffing issues and wage trends - Management reported strong hiring experiences and favorable wage trends, with no significant concerns regarding staffing [56]

CoreCivic Financial Performance - CoreCivic reported third-quarter revenue growth of 18.1% year-over-year, reaching $580.4 million, which exceeded Wall Street expectations [2] - Adjusted earnings per share (EPS) were $0.24, falling short of analysts' estimates of $0.26, indicating profitability weakness despite strong revenue growth [2] - The company lowered its full-year adjusted EPS guidance to a midpoint of $1.03, representing a 6.8% decrease from previous projections, and also reduced full-year EBITDA guidance [2] Market Reaction - Following the earnings report, CoreCivic's shares fell 12.2% in the morning session, reflecting significant market reaction to the news [1][4] - The stock has shown volatility, with 11 moves greater than 5% over the past year, indicating that this news has notably impacted market perception [4] Year-to-Date Performance - CoreCivic's stock is down 24.4% since the beginning of the year, currently trading at $16.42 per share, which is 31.4% below its 52-week high of $23.94 from November 2024 [6] - An investment of $1,000 in CoreCivic shares five years ago would now be worth $2,737, highlighting long-term growth despite recent volatility [6]