By M. Marin
READ THE FULL CXW RESEARCH REPORT
Recent contracts set the stage for a strong 2026 and beyond
CoreCivic (NYSE:CXW) reported 3Q25 results this week, beating our and consensus projections. We believe the reactivation of idled facilities and multiple new contracts position CXW for strong performance going forward. CXW has been awarded contracts at five idle facilities in 2025 and is in discussions with ICE and other government partners to reactivate others. Reactivation activities at one – the Midwest Regional Reception Center – have been paused by a lawsuit (see below). Once the other four reach stabilized occupancy, they are expected to generate roughly $320 million of annual revenue. Of these, California City and West Tennessee facilities late in 3Q25, and expect to reach stabilized occupancy in 1Q26 at both facilities. CXW still has five additional idle facilities containing over 7,000 beds that it can bring back online. Our takeaways include:
- CXW’s 3Q25 results beat our / consensus projections. Total revenue of $580.4m was well ahead of our $551m forecast, and adjusted EPS excluding costs to reactivate idled facilities exceeded our/consensus EPS forecasts.
- CXW’s detention populations and revenue have not been impacted by the shutdown. Revenue from ICE was up 54.6% in 3Q25 & average occupancy was 76.7% vs. 75.2%.
- We believe reactivation of idled facilities & multiple new contracts position CXW for strong performance ahead.
- CXW has five additional idle facilities and is in discussions to bring some back online.
- CXW has a strong balance sheet and liquidity to support operations, growth measures, share buybacks and other capital allocations.
- The company is entitled to receive full payment and interest payments once the government shutdown ends.
- CXW has been actively repurchasing its shares, a trend that we expect to continue or accelerate.
CXW’s detention populations and revenue have not been impacted by the shutdown. CXW’s revenue from ICE, its largest government partner, was $215.9 million in 3Q25 compared to $139.7 million in 3Q24, which represents a 54.6% increase. The average daily residential population at CXW facilities was 55,236 in 3Q25 compared to 50,757 in 3Q25. Average occupancy was 76.7% compared to 75.2%. The number of beds occupied under contracts with ICE has increased by about 36.9% year-to-date through September 30, 2025, or about 3,700 beds. We believe this underscores ICE’s need for capacity and CXW’s longstanding role in supplying capacity and services to ICE, its largest government partner. The company has a long history of providing capacity and related services to ICE, the federal government’s highest-funded law enforcement agency, according to the New York Times, and other government partners. In addition to ICE, other new contracts have come online over the past several quarters with states and/or counties.
CXW has a strong balance sheet and liquidity during government shutdown
With $56.6 million of cash at the end of 3Q25 and $191.4 million available under its revolver, for liquidity of about $248 million, CXW has a strong balance sheet and liquidity to support operations during the government shutdown. The company expects to receive full payment and interest payments once the shutdown ends.
Share repurchases are a capital allocation priority
CXW has been actively repurchasing its shares, a trend that we expect to continue or accelerate. The company repurchased 5.9 million shares at an aggregate cost of $121.0 million, or $20.60 per share, year-to-date through September 30, 2025. In 3Q25 alone, CXW bought 1.9 million shares at an aggregate cost of $40.0 million. Since the share repurchase program was authorized in May 2022, through September 30, 2025, we have repurchased a total of 20.4 million shares of our common stock at an aggregate cost of $302.1 million, or $14.81 per share. The company also increased the share repurchase authorization recently and had $197.9 million remaining under the plan as of September 30, 2025.
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