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The call highlighted strong sequential and year-over-year financial performance (notably adjusted EBITDA +36%, adjusted EPS +74%, and meaningful federal/ICE-driven revenue growth), successful activation of idled facilities, a strategic acquisition (Clinical Solutions) that materially expands recurring revenue and adjacencies, and continued shareholder-friendly capital deployment (buybacks). Offsetting risks include short-term ICE population volatility that pressures Q2 results, some decline in Marshals revenue, dependence on government funding and policy decisions (including potential ICE asset ownership or warehouse strategies), and modest near-term leverage and short-term borrowings. On balance, the operational and financial upside — including raised full-year guidance, accretive acquisition, and strong organic activations — outweigh the transitory policy and population headwinds.
CoreCivic raised full‑year 2026 guidance to diluted EPS $1.51–$1.61 and adjusted diluted EPS $1.53–$1.63, FFO $2.58–$2.68 and normalized FFO $2.60–$2.70, and adjusted EBITDA $453.8–$461.8M (up from $437–$445M), reflecting a Q1 beat of about $0.05/share plus the Midwest Regional contribution ($0.05–$0.06 per share for the remainder of 2026) and the Clinical Solutions Pharmacy acquisition (expected 2026 revenue $215–$230M and net EPS contribution $0.03–$0.05), partially offset by a $0.09–$0.15 per‑share reduction from lower ICE populations; management expects Q2 to reflect the $0.06 per‑share employee retention credit reversal, an ICE‑driven $0.05–$0.07 per‑share headwind partially offset by seasonal +$0.01–$0.02, guidance assumes maintenance CapEx $60–$70M, other CapEx $15M, $40–$45M for idle‑facility activations, AFFO $250.4–$264.9M, an effective tax rate of 25–30%, and continues to incorporate share repurchases while excluding unannounced contract awards, additional acquisitions or dispositions.
Adjusted EBITDA of $110.1M in Q1 2026, up 36% YoY (from $81.0M); adjusted EPS (ex‑M&A) $0.40 vs $0.23 prior, a 74% increase; normalized FFO per share $0.65 vs $0.45 prior, up 44%; GAAP EPS $0.38. Results beat consensus by $0.12 per share (EPS) and $13.3M (adjusted EBITDA).
Federal revenue grew 48% YoY, with ICE revenue increasing $128.1M (a 96.2% increase). ICE populations in CoreCivic care rose ~4,500 individuals (≈45% increase from beginning of 2025 to Mar 31, 2026). CoreCivic managed ~24% of total ICE populations at quarter end.
Five idle facilities were activated; revenue from four activated facilities totaled $100.8M in Q1 (annualized ≈93% of expected stabilized revenue). California City and Diamondback had 1,817 and 735 individuals respectively as of Mar 31. Midwest Regional Reception Center reactivation approved and expected to add $0.05–$0.06 incremental EPS for remainder of 2026.
Acquired Clinical Solutions Pharmacy for ~$148M (paid with cash and revolver borrowings). CSP serves over 600 correctional facilities across 28 states, fills ~60,000 prescriptions/day, 50% of shipments fully automated, no single customer >15% revenue. CSP expected to generate $215M–$230M revenue in 2026 and contribute $0.03–$0.05 EPS (net of acquisition financing).
Raised full-year guidance: adjusted diluted EPS $1.53–$1.63 (from $1.49–$1.59 prior); adjusted EBITDA $453.8M–$461.8M (up from $437M–$445M); FFO per share and normalized FFO per share ranges increased slightly. AFFO guidance of $250.4M–$264.9M supports capital deployment plans.
Repurchased 2.3M shares in Q1 for $44.7M; cumulative repurchases since 2022 of 28.1M shares for $444.2M (avg $15.82/share), with $255.8M remaining authorization. Management prioritizes continued buybacks where accretive.
Cash of $209.7M and $131.3M revolver availability (revolver balance $425M outstanding) for total liquidity ~$341M as of Mar 31, 2026. Net debt to adjusted EBITDA of 2.8x (TTM). Executed $100M 364‑day term loan post-quarter to replenish revolver borrowings.
Combined operating margin for Safety & Community facilities was 24% in Q1 2026 vs 23.6% prior year; excluding employee retention credits, operating margins were ~23% in both periods, indicating stable operational performance despite capacity activations.
Good day, and thank you for standing by. Welcome to the Q1 2026 CoreCivic, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.
Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jeb Bachmann, Managing Director of Investor Relations. Please go ahead.
Thank you, operator. Good morning, and welcome to CoreCivic, Inc.'s first quarter 2026 earnings call. Participating on today's call are Patrick Swindle, CoreCivic, Inc.'s President and Chief Executive Officer, and David M. Garfinkle, our Chief Financial Officer. We are also joined here in the room by our Vice President of Finance, Brian Hammonds. On this call, we will discuss financial results for the first quarter of 2026 as well as updated financial guidance for the 2026 year. We will also discuss developments with our government partners and provide you with other general business updates. During today's call, our remarks, including our answers to your questions, will include forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act.
Our actual results or trends may differ materially as a result of a variety of factors including those identified in our first quarter...