The GEO Group Awarded 15-Year Contract by U.S. Immigration and Customs Enforcement for Company-Owned, 1,000-Bed Delaney Hall Facility in New Jersey

Rhea-AI Summary

The GEO Group (NYSE: GEO) has secured a 15-year fixed-price contract with U.S. Immigration and Customs Enforcement (ICE) for its company-owned Delaney Hall Facility in Newark, New Jersey. The 1,000-bed facility will serve as a federal immigration processing center, providing security, maintenance, food services, and access to recreational amenities, medical care, and legal counsel.

Key financial highlights:

• Expected to generate over $60 million in annualized revenues in the first full year
• Estimated 15-year contract value of approximately $1 billion with cost of living adjustments
• Facility reactivation planned for Q2 2025
• Revenue and earnings expected to normalize in H2 2025

GEO is investing $70 million in capital expenditures to enhance capabilities for expanded detention capacity, secure transportation, and electronic monitoring services for ICE.

Positive

• Secured 15-year fixed-price contract worth ~$1B
• $60M+ annual revenue expected in first full year
• Margins align with existing Secure Services facilities
• Company-owned facility reduces operational costs
• $70M strategic investment to expand capabilities

Negative

• Operations won't start until Q2 2025
• Full revenue impact delayed until H2 2025
• Significant upfront capital investment required ($70M)

Insights

Financial Analyst

GEO Group's newly secured 15-year ICE contract represents a significant financial catalyst, adding $60+ million in annual revenue from its company-owned Delaney Hall Facility in New Jersey. With an estimated $1 billion total contract value, this agreement provides exceptional long-term revenue visibility through 2040, addressing a key investor concern in the corrections sector where contract stability is highly valued.

The financial impact is substantial for GEO's $3.6 billion market cap company, with the contract representing approximately 1.7% of its current market value annually. The contract's margin profile, described as consistent with company-owned Secure Services facilities, typically translates to EBITDA margins in the 25-30% range – considerably higher than GEO's managed-only facilities.

The timing is particularly favorable, with facility reactivation in Q2 2025 and full revenue recognition in H2 2025, creating a clear growth catalyst for next fiscal year. The $70 million capital expenditure investment represents just 7% of the total contract value, suggesting a compelling return on invested capital.

This contract signals strong federal demand for detention capacity in the Northeast and potentially indicates broader opportunities for GEO within the immigration enforcement sector. The 15-year fixed-price structure with "normal cost of living adjustments" provides inflation protection while maintaining predictable cash flows. As a company-owned facility, GEO maintains greater operational control and higher margin potential than leased alternatives.

Policy Analyst

This 15-year ICE contract for GEO's Delaney Hall Facility represents a significant shift in federal immigration infrastructure in the Northeast, establishing a 1,000-bed processing center in Newark. The contract's lengthy duration – spanning potentially multiple administrations – signals a structural rather than temporary expansion of detention capacity, regardless of potential policy oscillations.

The timing and location are strategically significant. The Northeast has faced persistent detention capacity constraints, particularly as migration patterns have diversified beyond traditional Southwest border crossings. Newark's proximity to transportation hubs and immigration courts likely influenced site selection, addressing logistical challenges in processing and adjudicating cases.

The contract's emphasis on support services including "access to recreational amenities, medical care, and legal counsel" reflects ongoing scrutiny of detention conditions and legal requirements established through litigation like Flores v. Garland. However, the contract announcement lacks specifics on detention standards, oversight mechanisms, or performance metrics.

GEO's characterization of an "unprecedented opportunity" in immigration enforcement aligns with current data showing record-high enforcement actions. ICE's detention capacity has fluctuated significantly in recent years – from approximately 55,000 beds pre-pandemic to below 20,000 during COVID-19, and now expanding again.

The facility's designation as a "processing center" rather than a detention facility potentially signals a focus on expedited case management rather than long-term detention, possibly indicating a shift toward more efficient immigration adjudication while maintaining robust enforcement capabilities. This aligns with bipartisan concerns about immigration court backlogs exceeding 3 million cases.

BOCA RATON, Fla.--(BUSINESS WIRE)-- The GEO Group, Inc. (NYSE: GEO) (“GEO” or the “Company”) announced today that it has been awarded a 15-year, fixed-price contract by U.S. Immigration and Customs Enforcement (“ICE”) to provide support services for the establishment of a federal immigration processing center at the company-owned, 1,000-bed Delaney Hall Facility (the “Facility”) in Newark, New Jersey. GEO’s support services include the exclusive use of the Facility by ICE, along with security, maintenance, and food services, as well as access to recreational amenities, medical care, and legal counsel.

The new support services contract is expected to generate in excess of $60 million in annualized revenues for GEO in the first full year of operations, with margins consistent with GEO’s company-owned Secure Services facilities. GEO estimates the 15-year value of the contract with normal cost of living adjustments to be approximately $1 billion. GEO expects to reactivate the Facility in the second quarter of 2025 with revenues and earnings from the new contract normalizing during the second half of 2025.

George C. Zoley, Executive Chairman of GEO, said, “Our company-owned Delaney Hall Facility will play an important role in providing needed detention bedspace and support services for ICE in the Northeast. We are continuing to prepare for what we believe is an unprecedented opportunity to help the federal government meet its expanded immigration enforcement priorities. We are taking several important steps to meet this opportunity, including making a previously announced $70 million investment in capital expenditures to strengthen our capabilities to deliver expanded detention capacity, secure transportation, and electronic monitoring and related services to ICE and the federal government.”

About The GEO Group
The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 99 facilities totaling approximately 79,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.

Use of forward-looking statements
This news release may contain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the cautionary statements and risk factors contained in GEO's filings with the U.S. Securities and Exchange Commission including its Form 10-K, 10-Q and 8-K reports. All forward-looking statements speak only as of the date of this news release and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Readers are strongly encouraged to read the full cautionary statements and risk factors contained in GEO’s filings with the U.S. Securities and Exchange Commission, including those referenced above. GEO disclaims any obligation to update or revise any forward-looking statements, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250226902647/en/

Pablo E. Paez (866) 301 4436

Executive Vice President, Corporate Relations

Source: The GEO Group, Inc.

FAQ

What is the value of GEO Group's new ICE contract for Delaney Hall Facility?

The 15-year contract is valued at approximately $1 billion, with expected annualized revenues of over $60 million in the first full year.

When will GEO Group's Delaney Hall Facility begin operations under the new ICE contract?

The facility is scheduled for reactivation in Q2 2025, with revenues and earnings normalizing during H2 2025.

What services will GEO provide at the Delaney Hall Facility under the ICE contract?

GEO will provide facility use, security, maintenance, food services, recreational amenities, medical care, and legal counsel access.

How many beds will GEO's Delaney Hall Facility provide for ICE operations?

The Delaney Hall Facility in Newark, New Jersey, will provide 1,000 beds for federal immigration processing.

What capital investment is GEO making to support the new ICE contract?

GEO is investing $70 million in capital expenditures for expanded detention capacity, secure transportation, and electronic monitoring services.