The GEO Group, Inc. (NYSE: GEO) is a leading provider of contracted support services for secure facilities and processing centers, as well as enhanced in-custody rehabilitation and electronic monitoring programs. The company is currently in a state of decline, as evidenced by its fourth quarter and full-year 2024 financial results. Net income for the fourth quarter of 2024 decreased to $15.5 million, or $0.11 per diluted share, compared to $25.2 million or $0.17 per diluted share in the fourth quarter of 2023. For the full year 2024, net income was $32 million, down significantly from $107.3 million reported in 2023.

Total revenues for the fourth quarter of 2024 were approximately $607.7 million, compared to $608.3 million in the same period the previous year. For the full year, revenues increased slightly to $2.42 billion from $2.41 billion in 2023. Adjusted net income for the fourth quarter was approximately $18.2 million, or $0.13 per diluted share, a decrease from $36.6 million, or $0.29 per diluted share, for the same period in the previous year.

Adjusted EBITDA also saw a decline, reported at approximately $108 million for the fourth quarter of 2024, down from $129 million in the fourth quarter of 2023. The annual adjusted EBITDA for 2024 was approximately $463.5 million, compared to $507.2 million in the prior year. The decline in both earnings and adjusted EBITDA is attributed to higher general and administrative expenses, increased labor costs, and costs related to debt extinguishment and employee restructuring.

GEO’s financial guidance for 2025 indicates continued expectation of revenue stability, with projected net income attributable to GEO expected to be between $0.74 and $0.88 per diluted share on revenues of approximately $2.5 billion. The effective tax rate is anticipated at around 28%. The company forecasts adjusted EBITDA to be between $460 million and $485 million for the full year.

In terms of capital expenditures, GEO expects to invest between $125 million and $145 million in 2025, including a $70 million investment to enhance detention capacity and other operational capabilities. This investment consists of $47 million for facility renovations, $16 million for additional GPS tracking device production, and $7 million for expanding secure transportation fleet capabilities.

Overall, GEO reported total net debt of approximately $1.7 billion at the end of the fourth quarter and anticipates reducing net debt by $150 million to $175 million through 2025. The company’s operational adjustments and restructuring, including anticipated new contract awards, aim to mitigate the impact of its current decline and prepare for future growth opportunities.