GEO Group (GEO): Buy, Sell, or Hold Post Q3 Earnings?

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the safety & security services industry, including GEO Group and its peers.

Rising concerns over physical security, cybersecurity threats, and workplace safety regulations will present opportunities for companies in this sector. AI and digitization will enhance surveillance, access control, and threat detection, which could benefit key players in Safety & Security Services. These trends could also introduce ethical and regulatory concerns over data privacy and automated decision-making in security operations, giving rise to headline risks. Finally, increasing scrutiny on private security practices and evolving criminal justice policies again mean that companies in the space need to operate with the utmost care or risk being the poster child of abuse of power.

The 5 safety & security services stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 2.7% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

GEO Group

With a global footprint spanning three continents and approximately 81,000 beds across 100 facilities, GEO Group operates secure facilities, processing centers, and reentry services for government agencies in the United States, Australia, and South Africa.

GEO Group reported revenues of $682.3 million, up 13.1% year on year. This print exceeded analysts’ expectations by 2.5%. Despite the top-line beat, it was still a slower quarter for the company with revenue guidance for next quarter missing analysts’ expectations significantly and a significant miss of analysts’ EPS guidance for next quarter estimates.

George C. Zoley, Executive Chairman of GEO, said, “During the first three quarters of 2025, we believe we have made significant progress towards meeting our growth and strategic objectives. Since the beginning of the year, we have entered into new or expanded contracts that represent over $460 million in new incremental annualized revenues that are already under contract and are expected to normalize in 2026. This represents the largest amount of new business we have won in a single year in our Company’s history.

Unsurprisingly, the stock is down 6.3% since reporting and currently trades at $15.75.

Read our full report on GEO Group here, it’s free for active Edge members.

Best Q3: MSA Safety

Founded in 1914 as Mine Safety Appliances to protect coal miners from dangerous gases, MSA Safety designs and manufactures advanced safety products that protect workers and facilities across industries including fire service, energy, construction, and manufacturing.

MSA Safety reported revenues of $468.4 million, up 8.3% year on year, outperforming analysts’ expectations by 1.1%. The business had a strong quarter with a beat of analysts’ EPS estimates and a narrow beat of analysts’ revenue estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1% since reporting. It currently trades at $161.04.

Is now the time to buy MSA Safety? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: CoreCivic

Originally founded in 1983 as the first private prison company in the United States, CoreCivic operates correctional facilities, detention centers, and residential reentry programs for government agencies across the United States.

CoreCivic reported revenues of $580.4 million, up 18.1% year on year, exceeding analysts’ expectations by 7.3%. Still, it was a softer quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.

As expected, the stock is down 5.6% since the results and currently trades at $17.61.

Read our full analysis of CoreCivic’s results here.

Brady

Founded in 1914 and evolving through more than a century of industrial innovation, Brady manufactures and supplies identification solutions and workplace safety products that help companies identify and protect their premises, products, and people.

Brady reported revenues of $405.3 million, up 7.5% year on year. This print topped analysts’ expectations by 2.6%. It was a strong quarter as it also produced a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is up 7.9% since reporting and currently trades at $80.80.

Read our full, actionable report on Brady here, it’s free for active Edge members.

Brink's

Known for its iconic armored trucks that have been a fixture in American cities since 1859, Brink's provides secure transportation and management of cash and valuables for banks, retailers, and other businesses worldwide.

Brink's reported revenues of $1.34 billion, up 6.1% year on year. This number was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it also recorded revenue guidance for next quarter slightly topping analysts’ expectations but EPS in line with analysts’ estimates.

Brink's had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 6.3% since reporting and currently trades at $112.60.

Read our full, actionable report on Brink's here, it’s free for active Edge members.

GEO Group’s third quarter was marked by substantial revenue growth, but the market reacted negatively as margin pressures and near-term headwinds overshadowed the top-line beat. Management attributed the sales gains to new and expanded contracts with U.S. Immigration and Customs Enforcement (ICE) and the U.S. Marshals, which drove facility occupancy and transportation services. CEO George Zoley highlighted that "these facility activations have increased our total ICE capacity to over 26,000 beds, and our current census is over 22,000, the highest ICE population we've ever had." However, higher staffing costs and the expense of ramping up new contracts weighed on overall profitability.

Is now the time to buy GEO? Find out in our full research report (it’s free for active Edge members).

GEO Group (GEO) Q3 CY2025 Highlights:

• Revenue: $682.3 million vs analyst estimates of $665.7 million (13.1% year-on-year growth, 2.5% beat)
• EPS (GAAP): $1.24 vs analyst estimates of $0.78 (58.8% beat)
• Adjusted EBITDA: $120.1 million vs analyst estimates of $120.1 million (17.6% margin, in line)
• Revenue Guidance for Q4 CY2025 is $663.5 million at the midpoint, below analyst estimates of $696.2 million
• EPS (GAAP) guidance for Q4 CY2025 is $0.25 at the midpoint, missing analyst estimates by 19.4%
• EBITDA guidance for the full year is $460 million at the midpoint, below analyst estimates of $473.9 million
• Operating Margin: 6%, down from 13.7% in the same quarter last year
• Market Capitalization: $2.04 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From GEO Group’s Q3 Earnings Call

• Joseph Gomes (NOBLE Capital): Asked about the slower-than-expected pace of ICE detention contract awards and population growth. CEO George Zoley pointed to government shutdowns and ICE staffing needs as main bottlenecks.
• Gomes (NOBLE Capital): Inquired about margin expectations for the ISAP 5 contract. Zoley acknowledged margin compression due to competitive pricing, but expects efficiencies in staffing and device costs to support future profitability.
• Gomes (NOBLE Capital): Sought clarity on staffing challenges for new facility openings. Zoley explained that recruiting and training for ICE clearance is time-consuming and costly, impacting near-term earnings.
• Matthew Erdner (JonesTrading): Asked about the scale and timing of ISAP contract revenue ramp-up. CFO Mark Suchinski said actual participant counts and revenue timing depend on government actions, which are uncertain.
• Gregory Gibas (Northland Securities): Queried about the ongoing shift toward higher-intensity monitoring and its impact on guidance. Suchinski confirmed a steady increase in ankle bracelet usage, expecting further benefits as the mix evolves.

Catalysts in Upcoming Quarters

In the quarters ahead, the StockStory team will be watching (1) the ramp-up and normalization of new ICE facility contracts and whether utilization rates remain high; (2) the pace and mix of participant growth in the ISAP 5 program, including the adoption of higher-intensity monitoring devices; and (3) progress in managing staffing costs and operational efficiencies as facility activations stabilize. Developments in government contract timing and ICE funding will also be important indicators for GEO’s future outlook.

GEO Group currently trades at $15.07, down from $16.82 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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Private corrections company GEO Group beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 13.1% year on year to $682.3 million. On the other hand, next quarter’s revenue guidance of $663.5 million was less impressive, coming in 4.7% below analysts’ estimates. Its GAAP profit of $1.24 per share was 58.8% above analysts’ consensus estimates.

Is now the time to buy GEO? Find out in our full research report (it’s free for active Edge members).

GEO Group (GEO) Q3 CY2025 Highlights:

• Revenue: $682.3 million vs analyst estimates of $665.7 million (13.1% year-on-year growth, 2.5% beat)
• EPS (GAAP): $1.24 vs analyst estimates of $0.78 (58.8% beat)
• Adjusted EBITDA: $120.1 million vs analyst estimates of $120.1 million (17.6% margin, in line)
• Revenue Guidance for Q4 CY2025 is $663.5 million at the midpoint, below analyst estimates of $696.2 million
• EPS (GAAP) guidance for Q4 CY2025 is $0.25 at the midpoint, missing analyst estimates by 17.4%
• EBITDA guidance for the full year is $460 million at the midpoint, below analyst estimates of $471.8 million
• Operating Margin: 6%, down from 13.7% in the same quarter last year
• Market Capitalization: $2.1 billion

StockStory’s Take

GEO Group’s third quarter was marked by substantial revenue growth, but the market reacted negatively as margin pressures and near-term headwinds overshadowed the top-line beat. Management attributed the sales gains to new and expanded contracts with U.S. Immigration and Customs Enforcement (ICE) and the U.S. Marshals, which drove facility occupancy and transportation services. CEO George Zoley highlighted that "these facility activations have increased our total ICE capacity to over 26,000 beds, and our current census is over 22,000, the highest ICE population we've ever had." However, higher staffing costs and the expense of ramping up new contracts weighed on overall profitability.

Looking ahead, GEO Group’s guidance reflects uncertainty, with management citing delays in new contract awards and the impact of government staffing and shutdowns as key risks. CFO Mark Suchinski noted that reduced contract pricing for the ISAP 5 electronic monitoring program and additional start-up costs at reactivated facilities will dampen margins in the upcoming quarter. Zoley emphasized, “The pace of new detention contracts has been slower than anticipated,” pointing to bureaucratic hurdles and ICE staffing shortages. The company is focused on normalizing operations and integrating recent contract wins to support future revenue growth, but expects operating challenges to persist in the near term.

Key Insights from Management’s Remarks

Management attributed Q3 performance to record contract wins, ICE facility activations, and secure transportation growth, while noting that ramp-up costs and shifting contract economics pressured margins.

• ICE facility activations: GEO activated five major ICE detention facilities in 2025, raising ICE bed capacity and census to record levels. These contracts, including Delaney Hall and the North Lake Facility, significantly increased occupancy and are expected to contribute more as they normalize next year.
• ISAP 5 contract awarded: The company secured a new two-year contract for the Intensive Supervision Appearance Program (ISAP 5), a key electronic monitoring initiative for immigrants, which includes both increased participant counts and lower unit pricing. Management noted that this contract required margin concessions but positions GEO for future growth in electronic monitoring services.
• Secure transportation expansion: GEO expanded its secure ground and air transportation services for ICE and the U.S. Marshals, signing a new five-year contract covering 26 federal judicial districts. This segment is expected to add roughly $60 million in incremental annualized revenue.
• Adelanto facility reactivation: The reopening of the Adelanto ICE Facility in California created additional start-up costs, including hiring and overtime expenses, which pressured margins this quarter but are expected to normalize in 2026 as operations stabilize.
• Share buyback and asset sales: GEO completed the sale of the Lawton, Oklahoma facility, using proceeds to reduce debt and fund share repurchases. The board expanded the stock buyback authorization to $500 million, with management emphasizing opportunistic capital allocation amid perceived undervaluation.

Drivers of Future Performance

Guidance for the next quarter and year is shaped by contract ramp-ups, cost management measures, and uncertainty surrounding government actions and staffing levels.

• ISAP 5 margin and mix shift: The new ISAP 5 contract features lower pricing but anticipates a shift toward higher-intensity monitoring devices (such as ankle monitors), which carry higher costs and service intensity. Management expects this mix to eventually benefit margins as case management services expand, though short-term profitability is pressured by the transition.
• Contract ramp-up and normalization: Recent contract wins, particularly the newly activated ICE facilities, require significant start-up investment in staffing and operations. The company expects these costs to normalize in 2026, supporting a step-up in both revenues and profitability if facility utilization remains high.
• Government and staffing delays: Progress toward scaling up ICE detention capacity is slower than anticipated, due to bureaucratic reviews, government shutdowns, and ICE’s need to double its staff. Management views these delays as temporary, but notes that timing and volume of new contract awards remain outside GEO’s control.

Catalysts in Upcoming Quarters

In the quarters ahead, the StockStory team will be watching (1) the ramp-up and normalization of new ICE facility contracts and whether utilization rates remain high; (2) the pace and mix of participant growth in the ISAP 5 program, including the adoption of higher-intensity monitoring devices; and (3) progress in managing staffing costs and operational efficiencies as facility activations stabilize. Developments in government contract timing and ICE funding will also be important indicators for GEO’s future outlook.

GEO Group currently trades at $15.13, down from $16.82 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).

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