CoreCivic(US:CXW)2025-11-06 20:45Financial 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].