CoreCivic's Q2 Net Income Dips Amid Facility Closures, Debt Refinancing

TL;DR

**CXW's net income is down, but their debt refinancing buys them time; watch contract renewals closely.**

AI Summary

CoreCivic, Inc. reported a net income of $25.3 million for the six months ended June 30, 2025, a decrease from $30.1 million in the prior year period. Total revenue for the six months ended June 30, 2025, was $950.5 million, compared to $945.2 million for the same period in 2024, representing a modest increase of 0.56%. The company's Safety segment generated $800.2 million in revenue for the six months ended June 30, 2025, while the Community segment contributed $105.3 million. Key business changes include the closure of the Farmville Detention Center on June 10, 2025, impacting future revenue streams. CoreCivic also refinanced its revolving credit facility, extending its maturity to October 31, 2028, and issued $350 million in 8.25% Senior Notes due 2029, enhancing liquidity. Risks include potential contract non-renewals, such as the U.S. Immigration and Customs Enforcement (ICE) contract at the West Tennessee Detention Facility, which was not renewed as of June 30, 2025. The strategic outlook focuses on optimizing facility utilization and managing debt maturities, with $250 million of 4.75% Senior Notes due in 2027. The company's idle facilities, including the Huerfano County Correctional Center, continue to incur operating expenses without generating revenue.

Why It Matters

CoreCivic's performance directly impacts its investors through dividend payouts and stock valuation, especially given its REIT structure. The closure of facilities like Farmville Detention Center and the non-renewal of the ICE contract at West Tennessee Detention Facility signal potential shifts in government contracting, affecting employees and local economies reliant on these operations. In a competitive landscape, CoreCivic's ability to secure and renew contracts with federal and state agencies is paramount, particularly as public sentiment and policy regarding private correctional facilities evolve. The company's debt management, including the issuance of new senior notes, is crucial for its long-term financial stability and ability to invest in new projects or maintain existing infrastructure, influencing its market position against competitors like GEO Group.

Risk Assessment

Risk Level: medium — The risk level is medium due to declining net income from $30.1 million to $25.3 million year-over-year and significant contract non-renewals, such as the ICE contract at the West Tennessee Detention Facility as of June 30, 2025. While debt refinancing provides liquidity, the company faces ongoing operational costs for idle facilities like Huerfano County Correctional Center without corresponding revenue.

Analyst Insight

Investors should monitor CoreCivic's upcoming contract renewals and new contract awards, particularly with federal agencies, as these are critical for revenue stability. Evaluate the impact of idle facilities on profitability and consider the company's ability to manage its $250 million in 4.75% Senior Notes due in 2027.

Financial Highlights

revenue

$950.5 million

net Income

$25.3 million

revenue Growth

+0.56%

Revenue Breakdown

Key Numbers

• $25.3 million — Net Income (for the six months ended June 30, 2025, a decrease from $30.1 million)
• $950.5 million — Total Revenue (for the six months ended June 30, 2025, up 0.56% from $945.2 million)
• $800.2 million — Safety Segment Revenue (for the six months ended June 30, 2025)
• $105.3 million — Community Segment Revenue (for the six months ended June 30, 2025)
• $350 million — Senior Notes Issued (8.25% Senior Notes due 2029)
• $250 million — Senior Notes Due (4.75% Senior Notes due in 2027)
• October 31, 2028 — Revolving Credit Facility Maturity (extended maturity date)

Key Players & Entities

• CoreCivic, Inc. (company) — filer of the 10-Q
• U.S. Immigration and Customs Enforcement (regulator) — contracting agency for detention facilities
• Farmville Detention Center (company) — facility closed on June 10, 2025
• West Tennessee Detention Facility (company) — facility with non-renewed ICE contract
• Huerfano County Correctional Center (company) — idle facility incurring operating expenses
• GEO Group (company) — competitor in the private correctional facility market

FAQ

Risk Factors

• Facility Closures and Non-Renewals [high — operational]: The closure of the Farmville Detention Center on June 10, 2025, and the non-renewal of the ICE contract at the West Tennessee Detention Facility as of June 30, 2025, directly impact revenue streams. Idle facilities like the Huerfano County Correctional Center continue to incur operating expenses without generating revenue, pressuring profitability.
• Debt Management and Refinancing [medium — financial]: CoreCivic refinanced its revolving credit facility to mature on October 31, 2028, and issued $350 million in 8.25% Senior Notes due 2029. While this enhances liquidity, the company also has $250 million in 4.75% Senior Notes due in 2027, requiring careful management of upcoming maturities.
• Contract Dependency [high — regulatory]: The company's revenue is heavily reliant on government contracts, particularly with ICE. The non-renewal of the West Tennessee Detention Facility contract highlights the risk associated with contract expirations and the potential for significant revenue loss.

Industry Context

CoreCivic operates within the private correctional and detention services industry, which is characterized by its reliance on government contracts. The industry faces ongoing scrutiny regarding operational standards, costs, and ethical considerations. Trends include shifts in government policy, fluctuating inmate populations, and increasing demand for specialized reentry and community-based services.

Regulatory Implications

The company's business model is highly sensitive to government policies and contract awards. Changes in immigration policy, sentencing guidelines, or a shift towards public management of correctional facilities can significantly impact demand for CoreCivic's services. Contract non-renewals, as seen with the West Tennessee Detention Facility, underscore the inherent regulatory and political risks.

What Investors Should Do

1. Monitor contract renewals and expirations closely.
2. Analyze the impact of idle facilities on profitability.
3. Evaluate the company's debt management strategy.
4. Assess the revenue contribution and outlook for the Community segment.

Key Dates

• 2025-06-10: Farmville Detention Center Closure — Impacts future revenue streams and requires operational adjustments.
• 2025-06-30: West Tennessee Detention Facility ICE Contract Non-Renewal — Represents a direct loss of revenue and highlights contract risk.
• 2025-10-31: Revolving Credit Facility Maturity Extended To — Provides extended financial flexibility and liquidity.
• 2027-10-31: Senior Notes Due — Represents a significant upcoming debt maturity that needs to be managed.
• 2029-01-31: Senior Notes Issued — New debt issuance to manage liquidity and capital structure.

Glossary

Safety Segment

Refers to CoreCivic's operations related to correctional and detention facilities. (This is the largest revenue-generating segment for the company.)

Community Segment

Refers to CoreCivic's operations related to residential and non-residential reentry and electronic monitoring services. (A smaller but distinct segment contributing to overall revenue.)

Idle Facilities

Correctional or detention facilities that are not currently under contract and are not generating revenue. (These facilities continue to incur operating expenses, negatively impacting profitability.)

Senior Notes

Unsecured debt instruments issued by the company with a specified interest rate and maturity date. (Key components of the company's debt structure, with upcoming maturities requiring management.)

Revolving Credit Facility

A type of credit facility that allows a company to borrow, repay, and re-borrow funds up to a certain limit over a specified period. (Provides ongoing liquidity and financial flexibility for the company.)

Year-Over-Year Comparison

For the six months ended June 30, 2025, CoreCivic reported a modest revenue increase of 0.56% to $950.5 million, compared to $945.2 million in the prior year period. However, net income saw a notable decrease to $25.3 million from $30.1 million in the same period last year. New risks have emerged, including the closure of the Farmville Detention Center and the non-renewal of a key ICE contract, while the company has proactively managed its debt structure through refinancing and new note issuance.

Key Financial Figures

• $0.01 — ch registered Common Stock, par value $0.01 per share CXW New York Stock Exchan

Filing Documents

• cxw-20250630.htm (10-Q) — 2407KB
• cxw-ex22_1.htm (EX-22.1) — 12KB
• cxw-ex31_1.htm (EX-31.1) — 15KB
• cxw-ex31_2.htm (EX-31.2) — 15KB
• cxw-ex32_1.htm (EX-32.1) — 9KB
• cxw-ex32_2.htm (EX-32.2) — 9KB
• 0000950170-25-104763.txt ( ) — 8758KB
• cxw-20250630.xsd (EX-101.SCH) — 1210KB
• cxw-20250630_htm.xml (XML) — 1584KB

Financial Statements

Financial Statements 1 a) Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024 1 b) Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2025 and 2024 2 c) Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2025 and 2024 3 d) Consolidated Statement of Stockholders' Equity (Unaudited) for the quarterly periods during 2025 4 e) Consolidated Statement of Stockholders' Equity (Unaudited) for the quarterly periods during 2024 5 f)

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 6 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 37 Item 4.

Controls and Procedures

Controls and Procedures 37

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 38 Item 1A.

Risk Factors

Risk Factors 38 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38 Item 3. Defaults Upon Senior Securities 38 Item 4. Mine Safety Disclosures 38 Item 5. Other Information 39 Item 6. Exhibits 39

– F INANCIAL INFORMATION

PART I – F INANCIAL INFORMATION

– FINANCIAL STATEMENTS

ITEM 1. – FINANCIAL STATEMENTS. CORECIVIC, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) ASSETS June 30, 2025 December 31, 2024 Cash and cash equivalents $ 130,524 $ 107,487 Restricted cash 12,427 14,623 Accounts receivable, net of credit loss reserve of $ 4,316 and $ 4,471 , respectively 300,439 288,738 Prepaid expenses and other current assets 40,255 38,970 Assets held for sale 3,766 — Total current assets 487,411 449,818 Real estate and related assets: Property and equipment, net of accumulated depreciation of $ 1,952,722 and $ 1,905,508 , respectively 2,060,739 2,060,024 Other real estate assets 186,588 193,105 Goodwill 4,844 4,844 Other assets 332,075 224,100 Total assets $ 3,071,657 $ 2,931,891 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 290,071 $ 273,724 Current portion of long-term debt 13,884 12,073 Total current liabilities 303,955 285,797 Long-term debt, net 1,006,584 973,073 Deferred revenue 10,898 12,399 Non-current deferred tax liabilities 92,711 89,207 Other liabilities 179,977 78,064 Total liabilities 1,594,125 1,438,540 Commitments and contingencies Preferred stock – $ 0.01 par value; 50,000 shares authorized; none issued and outstanding at June 30, 2025 and December 31, 2024 — — Common stock – $ 0.01 par value; 300,000 shares authorized; 107,311 and 109,861 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 1,073 1,099 Additional paid-in capital 1,652,782 1,732,231 Accumulated deficit ( 176,323 ) ( 239,979 ) Total stockholders' equity 1,477,532 1,493,351 Total liabilities and stockholders' equity $ 3,071,657 $ 2,931,891 The accompanying notes are an integral part of these consolidated financial statements. 1 CORECIVIC, INC. A

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