CoreCivic's Q2 adjusted FFO hit $0.48 a share on 78.3% occupancy; the prison operator lifted the low end of its 2026 guidance on stronger federal demand.
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CoreCivic (CXW) beat Wall Street estimates for the second quarter and raised the low end of its 2026 profit guidance. The company reported the figures after Tuesday's market close. Revenue was $503.4 million in the three months through June 30, up from $493.9 million a year earlier and above the $499.6 million consensus compiled by FactSet. Adjusted funds from operations, a key profit gauge for prison real estate investment trusts, came in at $0.48 per share, up from $0.46 and in line with the average analyst forecast.
Average compensated occupancy across CoreCivic's 47 owned facilities reached 78.3%, against 77.9% in the year-ago quarter. Management tied the improvement to continued placements by the federal Bureau of Prisons and the U.S. Marshals Service. Per diem rates rose about 2% year over year, Chief Financial Officer David Garfinkle said.
For 2026, CoreCivic now sees adjusted FFO of $1.87 to $1.97 per share, compared with the prior range of $1.85 to $1.97. The revenue outlook moved to $2.0 billion to $2.05 billion from $1.98 billion to $2.05 billion.
Management credited two federal contract developments. The Bureau of Prisons has been moving inmates to CoreCivic's Tallahatchie County Correctional Facility in Mississippi since the federal government ended its contract at a competing facility last year. La Palma Correctional Center in Arizona, which had been running well below capacity, is drawing more placements from the U.S. Marshals Service.
“We are seeing continued demand from our federal partners, and we expect that trend to persist through the balance of the year,” Chief Executive Patrick Swindle said.
Same-store revenue, which covers only facilities open in both periods, rose 2.1%. The company credited the gain entirely to price and mix rather than population growth. Owned properties, the largest segment, brought in $468 million of revenue. Leased facilities added $28 million, and community corrections contributed $7.4 million.
Costs rose slightly faster than revenue. Operating expenses climbed 2.3% to $395 million on higher medical costs and wage pressure at some facilities. Adjusted EBITDA reached $56.2 million, against $55.4 million a year earlier, and the adjusted EBITDA margin slipped to 24.3% from 24.6%.
CoreCivic ended the quarter with $195 million in cash and $328 million drawn on its $600 million revolving credit facility. Its weighted average cost of debt was 5.5%, down from 5.7% at the end of 2025. Management plans to refinance a $350 million unsecured note due in 2027 before year-end, taking advantage of lower interest rates.
No shares were repurchased during the quarter. Swindle said debt reduction remains the priority, and the board will revisit buybacks once leverage falls to the low end of its target range. CoreCivic shares rose 1.8% in afternoon trading Wednesday.
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