Q2 2025 GEO Group Inc Earnings Call
Good day and welcome to the Geo Group. Second, quarter 2025 earnings call. All participants will be in a listen-only mode. Should you need assistance, please single a conference specialist by pressing the star key followed by zero.
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I would now like to turn the conference over to pop up as Executive, Vice President of corporate relations. Please go ahead, sir.
Thank you, operator. Good morning, everyone, and thank you for joining us for today's discussion of the GEO Group's second quarter 2025 earnings results.
With us today are George oolie executive, chairman of the board. Dave, Donahue chief executive officer in March, the chinsky Chief Financial Officer
This morning, we will discuss our second quarter results, as well as our Outlook, we will conclude the call with a question and answer session.
Group.com.
Today, we will discuss non-gaap basis information. A Reconciliation from non-gaap basis information to gaap basis. Results is included in the press release and the supplemental disclosure. We issued this morning.
Additionally much of the information we will discuss today, including the answers. We give in response to your questions may include forward-looking statements regarding our beliefs and current expectations with respect to various matters.
These forward-looking statements are intended to fall within the safe harbor, provisions of the Securities laws.
our actual results May differ materially from those in the forward-looking statements as a result of various factors contained in our Securities and Exchange Commission filings including the form, 10 K 10 q and 8K, reports
With that, please allow me to turn the call over to our executive chairman George Ollie. George thank you. Pablo and good morning to everyone and thank you for joining us on our second quarter 2025 earnings call.
I'm pleased to be joined today by our CEO. Dave. Donahue and our CFO, Mark shoots chinsky.
During the first half of the year, we achieved several important milestones and we have made significant progress towards meeting our growth and strategic objectives.
In February, we entered into a 15-year contract with ICE for the establishment of an ice processing center at our company-owned 1,000-bed Delaney Hall facility in New Jersey.
Delaney Hall, began intake of ice, detainees on May 1st and remains in the process of ramping up.
The, the support services contract for Delaney Hall is expected to generate in excess of 60 million in annualized, revenues in the for First full year of operations.
In March, we entered into a letter contract with ice for the activation of our company-owned, 1800 bed, North Lake facility in Michigan.
Over the past few months. We were in discussions with ice to defend a 2-year Support Services contract for that facility, which has now been finalized and executed.
Based on the scope of services in terms of the contract, we now expect our North Lake facility to generate in excess of $85 million in annualized revenues in the first full year of operations.
North Lake has already begun intake of ice detainees and we expect it to gradually ramp up during the third and fourth quarters.
In June, we announced the activation of our company-owned 1868 bed Dre, James facility, in Georgia, under a contract modification to the existing intergovernmental service agreement that is in place for our company-owned 1118 bed, folks in ice processing center, thus creating a 2,986 bed facility, complex.
Under the modified agreement, we expect to generate approximately $66 million in additional incremental annualized revenues in the first full year of operations.
The rate James has also begun intake of ice detainees and we expect the facility to gradually ramp up during the third and fourth quarters.
In June, we also announced a recent court settlement, which allowed for the immediate full intake at our company-owned 1940 bed at alanto ice processing center in California.
Intake at alanto have been Pro prohibited by a court order issued more than 4 years ago. Based on then prevailing coid 19 conditions.
With the lifting of these Court restrictions Adelanto has begun.
Ramping up over the last 2 months and is nearing full occupancy.
At full occupancy, the Adelanto contract is expected to generate up to approximately $31 million in additional incremental annualized revenues.
These 4 facilities which remain at different stages of activation represent more than 240 million dollars in Combined annualized revenues with margins consistent. With our company-owned secure Services facilities which averaged between 25 and 30%.
Will ramp up a populations. We expect full year Revenue contributions from these activations to be reflected in 2026.
As a reminder, facility, activations generally require 60 to 90 day period of time to hire train and clear staff.
During this time frame, we typically incur startup expenses.
once intake begins population is generally increased gradually to allow for smooth operational activation
During the second quarter of this year, the utilization across our current ice contracts has increased from approximately 15,000 beds, to 20,000 beds at 21 facilities, which is the highest level of ice utilization in our company's history.
This represents more than 1/3 of the current ice detention levels, which we estimate to be approximately 507,000 beds Nationwide.
additionally, we have 5,000 beds currently available across our existing 21 ice facilities, primarily at our 4 ice facilities that remain under activation
Once these facilities are fully occupied, our total ice beds are expected to increase to approximately 25,000.
We also have approximately 5,900 Idol beds at 6 company owned for facilities which remain available.
These facilities include our 1200 bed, Lee County facility in New Mexico.
Our 1300 bed, Rivers facility in North Carolina,
our 1450 bed, flight line.
Facility, and a 900.
Bed. Cedar Hill facility in Texas.
Our 700 bed, Cheyenne Mountain facility in Colorado.
And our 300-bed McFarland facility in California.
The majority of these facilities were formerly, contracted to the US Bureau of Prisons and our high-security facilities which makes them ideally suited for the needs of ice and the US Marshal Service.
If fully utilized these 6 facilities would could generate up to approximately 310 million in annualized revenues.
We are an active discussions with both ice and US Marshal Service for the potential activation of these facilities.
We continue to be pleased with the pace of these contract discussions and remain optimistic that additional contractor Awards will materialize during the third and fourth quarters of the year.
As has been publicly reported ice is focusing on increasing its detention capacity from the current 5700 beds to 100,000 beds or more by the end of the year.
While the annual Appropriations provided under the current continuing resolution only funded eyes for 4, 4 4100 and 541,500 detention beds. The budget reconciliation bill that was approved by Congress and signed into law by the president on July 4th included. A significant increase in funding to support this expansion in detention beds and other areas of immigration enforcement,
The budget recurring syation Bill provides 171 billion in incremental funding for border security and immigration enforcement, including 45 billion dollars for is detention and 30 billion dollars for other ice areas, all of which will remain available through September 30th 2029 and can be spent at the discretion of DHS and ice.
We believe that the funding provided by the budget reconciliation. Bill is currently in the process of being allocated by the Office of Management and budget and will likely be available in mid to late August.
To the best of our knowledge of the current bet.
Facilities would likely provide ice capacity for approximately 75 to 80,000 beds.
Scaling up to 100,000 beds or more will likely require ice to seek alternative Solutions like temporary softsided facilities which we believe the administration is exploring.
Primarily on military bases. Or as has recently been supported.
state provided sites at this time in such States as
Florida Indiana.
and,
um,
Louisiana.
While our primary focus remains on the activation of our remaining idle facilities by either ICE or the U.S. Marshal Service, we are also exploring other potential alternatives to further assess ICE's meeting and stated objectives.
to that and we have and will continue to evaluate the potential acquisition or leasing of third-party owned facilities and we will also identify several
Of our existing ice facilities where we can add approximately 5,000, combined beds, using different options of temporary and permanent facilities.
Additionally, we have entered into teaming agreements with an established Department of Defense contractor to position our company to pursue potential procurements that may...
Be issued for Operational Support Services at military sites.
All of these efforts are aimed at placing our company in the best competitive position possible to pursue. What we continue to believe our unprecedented growth opportunities.
As a long-standing support services provider for ice with a 40 year, long track record. We believe We Are uniquely positioned to assist the agency to meet its objectives.
In addition to providing special purpose facilities that meet the unique operational needs and requirements set by Ice. We are also the agency's sold provider of electronic monitoring In Case Management Services through our bi subsidiary.
Bi has a long track record of delivering quality services under the Intensive supervision appearance program or isap as it's called.
With the bipartisan support of approximately.
20 years.
On July 17th, 2025, ice posted a justification and approval of that notified. The public of Isis intention to extend the IP contract for a period of 12 months, to allow the agency to prepare for a new competitive procurement.
On July 31st. I MBI agreed to extend the isep contract through August 31st 2025, we believe this interim, agreement provides iced additional time to extend the isap contract period of performance for 6 to 12 months, with possible, further extensions, during which time ice will likely be evaluated
evaluating the isap program for potential, programmatic changes, and scale of operations.
This process would likely be followed by the issuance of a national request for proposals.
Taking place over several months to evaluate submissions from interested parties.
We Believe bi is in a highly competitive position, having held the isap contract for approximately 20 years, consistently winning multiple competitive, rebids of the contract. During that time frame.
We Believe bi has consistently delivered high-quality Services Under the isab contract. These Services entail Diversified electronic monitoring Technologies as well as compliance Management Services which are delivered through a nationwide network of approximately 100 offices and close to 1,000 employees.
In addition to another 9.5 to 10 million people who are also estimated to be in the United States without legal status.
Given the size of this population of the 17-18.
The current number of IAP participants is approximately 180,083,000 individuals, and isap participant counts have remained in a relatively stable range.
For most of the year.
We believe that the lack of growth in isap has been primarily driven by intense Focus from ice on increasing and maximizing the utilization of detention capacity.
Once the detention capacity is maximized by the end of the year. We speculate that the focus will likely shift to increasing the use of GPS tracking.
Our current expectation is for ISAP participant counts to remain stable through the third and fourth quarters.
With growth, starting to materialize late this year, or early next year, to coincide with the maximization advice. Detention capacity.
With our previously announced investment to ramp up inventory.
Of our GPS tracking devices to several tens of thousands. We believe we've taken the necessary resources to significantly and quickly respond to the eventual expansion of isap.
Now turning to the important investment we've made for the continued growth of our secure.
Transportation services. Our oh, wholly owned Transportation, subsidiary or GTI has a long-standing record providing secure ground, transportation services on behalf of ice, primarily in connection with our existing ice processing centers.
Starting in 2023, our contractual partnership with CSI Aviation has allowed GTI to become the largest provider of secure ground and air transportation for ice.
We expect that an increase in the number of removal flights. Could generate an incremental 40 to 50 million dollars in annualized revenues for GTI under this existing contractual partnership.
GTI has been a long-standing partner to the US Marshal Service in June. We announced an expansion to this partnership when GTI entered into a new 5-year contract with the US Marshal Service for the provision of security transportation services. Covering 26 Federal Judicial districts in spanning 14 States.
This new contract is expected to generate up to approximately $30 million in annualized revenues.
GTI revenues have grown 240% from 58 million in 2022. To 140 million dollars, projected for 2025.
In addition to these important operational milestones, we have taken significant steps to strengthen our capital structure by deleveraging our balance sheet and positioning our company to enhance, shareholder value through Capital returns.
In mid July, we completed an amendment to our credit agreement. To increase the size of our revolver from 310.
Million to 450 million.
Extend its maturity to July of 2030 and decrease. The interest rate on outstanding borrowings by 1/2 of a percent.
But we've also repaid $132 million of the Term Loan B outstanding under the credit agreement. At the time, on July 25th, we completed the sale of our company-owned 2000-388 bed facility.
Facility in the state of Oklahoma for 312 million which has been a financially transformative event in our company's history.
130,000 per bed is representative of the intrinsic value of our company-owned facilities, which now total approximately 50,000 beds.
On July 31st. We used a portion of the net proceeds from the sale of the lawn facility to acquire the 770 bed, Western Regional Detention Facility in San Diego, California for approximately million dollars and I like Kind real estate property exchange. That is expected to be accretive to ibadan.
This is an important facility that recently celebrated its 25th anniversary of providing Federal Detention capacity on behalf of the US Marshal Service, under a long-standing contract that generates approximately 57 million dollars in annualized. Revenues for geo.
We use the remaining net proceeds from the sale of Law and facility to pay off the additional senior secured debt, including the remaining balance of our Term Loan B.
These combined transactions have reduced our total net debt to approximately $1.47 billion and positioned our company to enhance shareholder value through capital returns.
Given the intrinsic value of our assets and the unprecedented growth opportunities we anticipate will materialize over the balance of this year and next year, we believe that our current equity valuation offers an attractive opportunity for investors.
Similarly, we believe it offers an opportunity for our company to enhance, shareholder value through share repurchases.
To that end. Our board of directors recently, authorized a 300 million dollar stock buyback program effective through June 30th 2028. We expect to conduct our 3-year stock buyback program at a rate of approximately 100 million dollars per year. While paying down debt at also approximately 100 million dollars per year.
We expect to execute on our new stock 5-bag program, opportunistically balancing it with our growth capital needs and our continued efforts to deleverage our balance sheet.
At this time, I will now turn the call over to our CFO mark.
To review our financial highlights and guidance.
Thank you, George and good morning, everyone.
We're pleased with our strong second quarter results, which exceeded our previously issued guidance.
For the second quarter of 2025, we reported net income attributable, to Gio of approximately 209 million or 21 cents per diluted. Share on quarterly revenue of approximately 636 million.
This compares to net loss attributable, to go of approximately 32.5 million or 25 cents per diluted share in the second quarter of 2024 due to the refinancing costs of 82 million.
On revenues of approximately $607 million.
Adjusted net income for the second quarter of 2025 was approximately $31 million or $0.22 per diluted share, compared to approximately $30 million or $0.23 per diluted share from the prior year’s second quarter.
Adjusted ibida for the second quarter of 2025 was approximately 119 million.
Consistent with approximately 119 million reported in the prior year's second quarter.
Our second quarter.
2025 revenue, net income, and adjusted EBITDA were well ahead of our previously issued guidance.
Beginning with revenues.
Quarterly revenues in our owned and leased secure facilities, increase by approximately 12% year-over-year.
By the activation of our new ice contracts.
And census growth across our existing Isis, ice processing centers.
while revenue is
in our owned and least secure service facilities increase in second quarter. Net operating income for this segment was largely unchanged year-over-year. As a result of startup expenses, incurred. During the quarter in connection with the activation of our new ice facilities.
From the prior year, second quarter.
These quarterly Revenue increases were offset by lower quarterly revenues, in 3 of our business units.
A 7% reduction in our Electronic Monitoring and Supervision Services Unit.
A 2% reduction in our re-entry centers and a 3% reduction in our managed only contracts.
Turning it to our expenses during the second quarter of 2025 our operating expenses increase by approximately 7% compared to the prior year. Second quarter.
The increase in our operating expenses reflects startup expenses related to the hiring of additional staff in connection with the activation of our new ice facilities.
We have increased our budget to approximately a hundred million dollars in physical plant and Technology improvements to better position Geo in responding to Isis expanding needs.
Our general and administrative expenses for the second quarter of 2025 increased by approximately 8% from the prior year. Second quarter in part due to the reorganization of our senior management team at the end of last year, higher employee related benefit costs
An additional support for our new contract awards.
Our second quarter, 2025 results. Reflect a year-over-year, decrease in our net, interest expense,
Of approximately $9 million as a result of our continued debt reduction efforts.
Our effective tax rate for the second quarter of 2025 was approximately 28%.
Now if we move to our Outlook, we have updated our financial guidance for the full year and issued guidance, for the third and fourth quarter of 2025.
Our updated guidance for Flex. Several moving pieces.
But the delivering component is anchored by the 312 million dollar sales of our law in Oklahoma facility.
first, we have several facilities at different stages of activation,
Second, the sale of our law and facility in Oklahoma and the depopulation of our Lea County facility in New Mexico will result in some revenue and earnings loss.
While the recent purchase of the Western Region Detention Facility will be a contributor to our adjusted EBITDA in the second half of the year.
Third, we have recalibrated our expectations regarding our isap contract to remain stable in the third and fourth quarters.
Forth. Our net interest expense is expected to decrease significantly in the second half of 2025 as a result of our recent efforts to repay outstanding portions of our higher-cost debt.
Finally consistent with our long-standing practice. Our guidance does not include any new contract awards that have not yet been previously announced.
Taking a new account. These moving pieces, we have increased our full year 2025 guidance. For gaap net income to arrange of
a dollar.
And 999 cents to $2.99 per diluted share including a 228 million gain on the sale of our lot facility.
We have increased our full year 2025 guidance for adjusted net income to a range of $0.84 to $0.94 per diluted share on increased annual revenues of approximately $2.56 billion.
And based on an effective tax rate of approximately 26%, inclusive of known discrete items.
We expect total Capital expenditures for the full year 2025.
To be approximately 200 million and 210 million.
Which includes approximately dollars.
For the purchase of our western region Detention Facility.
And we are maintaining our full year 2025 adjusted IBA guidance. In the range of 465 million to 490 million.
For the third quarter. 2025, we expected just an income to be in the range of 20 cents to 23 cents per diluted share on quarterly revenues of 650 to 660 million.
We expect third quarter, 2025 adjusted Eva to be between 115 million and 125 million.
For the fourth quarter of 2025, we expect the adjusted, net income to be in the range of 28 cents to 35 cents per diluted. Share on quarterly, revenues of 658 million to 673 million.
And 147 million.
Let's now move to our capital structure. We ended the second quarter of 2025 with total net debt of approximately 1.7 billion dollars.
Subsequent to the end of the second quarter. We completed several important steps to strengthen our capital structure and further, deliver our balance sheet, largely due to the 3012 million sale of our law in Oklahoma facility.
First, we completed an amendment to our credit agreement. To increase the size of a revolver from 310 million to 450 million.
The amendment also extended our revolving.
Revolvers maturity to July of 2030 and lowered the interest rate on borrowing Under The Revolver by 50 basis points.
This important financing transaction.
Is representative of the support. We are enjoying from our existing and new banking partners.
prior to the execution of the credit Amendment, we had repaid 132 million of outstanding borrowings under the term Term Loan, B,
Following the closing of the 3001, 12 million sale of our lawn facility in Oklahoma.
We use 222 million in net proceeds to pay off additional senior secured debt, including the remaining balance of our Term Loan B.
On a pro forma basis, these combined transactions have reduced our total net debt to approximately $1.47 billion and our total net leverage to approximately 3.3 times adjusted debt.
Additionally, our debt maturities are now fairly evenly. Staggered between 2029 and 2031.
Given the intrinsic value of our owned real estate assets, as evidenced by the sale of our lawn facility, the significant steps we have taken to reduce debt, the growth we have already captured, and the additional growth we expect to capture going forward, we believe strongly that our current equity valuation presents a very attractive proposition.
We believe this represents a significant opportunity for our company to enhance long-term value for our shareholders.
To this end, our Board of Directors has authorized a $100 million share repurchase program, effective through June 30, 2028.
The expiration date can be extended. The size of the program can be increased in the future at our board's sole discretion.
We intend to execute on our new stock buyback program at a rate of approximately a hundred million dollars per year while opportunistically balancing it with our other Capital allocation priorities to support continued company growth, Capital needs and Achieve long-term debt reduction.
We're also targeting to further, reduce debt.
At a rate of approximately $100 million per year, plus balancing, the capital benefits to our shareholders.
We remain focused on disciplined allocation of capital to enhance long-term value for our shareholders. And we believe that our strong cash flows, which we expect to grow forward. Will also allow us to support our Capital allocation priorities.
At this time, I will turn the call over to our CEO. Dave Donahue, to review our geo, geo secure services, and giocare highlights Dave.
Thanks Mark and good morning everyone.
I'm pleased to review our quarterly highlights for geo secure services and giocare.
During the second quarter of 2025, we renewed 2 secure service contracts at the state level in Georgia and Arizona.
On June 30th, we completed the previously announced depopulation of our company-owned 1,200-bed Lea County, New Mexico facility, which was previously under contract with the New Mexico Corrections Department. We are currently marketing this facility to the federal government.
During the second quarter our secure Services facilities successfully underwent a total of 44 audits including internal audits government reviews, third-party accreditations and prison rape elimination act or Prius certifications.
3 of our secure Services facilities, underwent accreditation audits from the American Correctional association with an average score of 99.1%
And another three facilities received PREA certifications.
our GTI Transportation Division and our go Amy UK joint venture completed approximately 4.9 million miles driven in the United States and the UK during the second quarter
Approximately 15,000 beds to 20,000 beds with an additional 5,000 beds at different stages of activation.
This census level represents the highest utilization of our contracted ice facilities in our company's history.
Go has a long-standing track record of delivering professional support services on behalf of ICE at GEO contracted Federal Immigration Processing Centers, and we stand ready to support ICE with any additional needs.
Go contracted ice processing center offer. Around-the-clock access to quality health care services.
Our healthcare staffing at the ICE processing centers, where we provide residential healthcare, is generally more than double the number of healthcare staff at a typical state correctional facility.
Geo contracted ice processing. Centers offer full access to legal counsel, and legal, libraries and resources.
And we have dedicated space at each eye center to provide residents with confidential meetings with their legal counsel.
Go contracted ice processing centers. Provide residents with 3 daily Mills that are culturally sensitive, special diet, appropriate and approved by registered dietitians.
We also provide access to faith-based, and religious opportunities. At each Geo, contracted ice processing center, and we've partnered with community volunteers as needed to ensure Fair representation of various faiths and the nominations
Geo contracted ice processing centers. They also offer access to enhanced amenities, including artificial turf, soccer fields, covered pavilions, exercise equipment, and multi-purpose rooms.
Moving to our Geo re-entry segment during the second quarter of 2025 we renewed 17 residential re-entry, Center contracts, including 5 contracts with the Federal Bureau of Prisons and 1 non-residential day reporting Center contract.
During the second quarter, our residential re-entry centers, non-residential day reporting centers, and ISAP offices successfully underwent a combined total of 79 audits, including internal audits, government reviews, third-party accreditations, and Prison Rape Elimination Act (PREA) certifications.
Our 35 residential re-entry centers, including 14 centers under contract with the Federal Bureau of Prisons.
Provide transitional housing and Rehabilitation programs for individuals re-entering their communities across 14 States.
Average daily census levels at these centers remain stable, at approximately 5,000 individuals, during the second quarter of 2025.
3 of our non-residential. Excuse Me, 3 of our residential re-entry centers received react during the second quarter from the American Correctional association with an average accreditation score of 100% And 3 additional residential re-entry centers received prea certifications.
Our non-residential and day reporting centers, provide high quality Community Based Services, including cognitive behavior treatment for up to 107% at approximately 102 locations across 10 different states.
Moving to our enhanced Rehabilitation programs.
We currently deliver in custody Rehabilitation to an average daily population of approximately 2,700 individuals. At 38, in prison program, sites and 7 States. And engage approximately 30,000 program. Participants at 10 go Continuum of Care, sites and 6 States.
Our in custody rehabilitation services include academic programs focused on the attainment of high school equivalency diplomas.
We have made a significant investment to equip all of our classrooms with smartboards and our education departments to Aid in the delivery of academic instruction.
We've also focused on developing vocational programs that lead to certification for good jobs in the markets where our graduates will live upon release.
Our substance abuse treatment programs are an important part of our rehabilitation services because many of the individuals in our facilities, suffer from addiction and substance use disorder.
Our facilities. Also provide extensive faith-based and character-based programs with designated housing units across our facilities designed to enhance the delivery of these programs.
During the second quarter of 2025. We completed approximately 1.7 million hours of enhanced in custody Rehabilitation programming.
Our academic programs and learning academy. Awarded more than 1,200 high school equivalency diplomas.
Our vocational training programs have awarded more than 2,100 vocational training certifications.
Our substance abuse treatment programs have awarded over 2,000 program completions.
Completions and close to 5400 individual cognitive behavioral treatment sessions.
During the second quarter, we also allocated approximately 380,000 dollars towards post-release services.
This funding supported close to 1,700 individuals released from go service facilities as they continue to return to their communities.
Our Geo Continuum of Care Program, integrates enhanced in custody Rehabilitation, including cognitive behavioral treatment with post-release support services, that address, the critical Community needs of released individuals.
We believe our award-winning program provides a proven model for how the 2.1 million people in the U.S. criminal justice system can be better served in changing their lives.
Our GO Continuum of Care has had a positive impact on the reduction of criminal recidivism rates, with our programs achieving a reduction of between 42% and 47% in recidivism over 3 and 5 year periods when compared to the national averages.
Finally, turning to our electronic monitoring and supervision services segment, our bi subsidiary continues to provide a full suite of monitoring and supervision solutions, products, and technologies for government agency partners at the local, state, and federal levels.
Bi is continuously evaluating the development of new cutting-edge electronic monitoring technologies.
To support the growing need for these services from government agencies across the United States.
At this time, I'll turn the call back over to George for closing remarks.
Thank you Dave, in closing.
We are very pleased with our strong second-quarter results, with significant progress we've made towards meeting our growth and strategic objectives.
Since the beginning of the year, we've announced the activation of four facilities, totaling approximately 66,600 beds under contracts with ICE.
Which could generate an additional $310 million in annualized revenues if fully activated.
Additionally, we've identified several of our existing ice facilities where we could add approximately 5,000 combined beds either through temporary or permanent facility. Expansions,
We’ve stocked up the inventory of our monitoring devices and are well positioned to assist the federal government to scale up the use of GPS tracking for non-detained illegal aliens, once the ICE detention capacity has been maximized.
We expect growth in our isap contract could begin to materialize late this year or early next year to coincide with the maximization of the ice detention capacity.
We're pleased with the continued growth of our ground and secure transportation services for ICE and the U.S. Marshals.
This.
This is a unique moment in our company's history as a long-standing support services provider for ICE with a 40-year track record. We believe we are uniquely positioned to assist the agency in meeting its objectives.
All of our efforts are aimed at placing our company in the best competitive position possible to pursue what we believe to be unprecedented growth opportunities.
And we've budgeted 100 million dollars in physical, plant vehicles and electronic monitoring improvements towards that objective.
given the intrinsic value of our own real estate assets as evidenced by the scale of our
uh, the sale of our lot and facility and the unprecedented growth opportunities in front of our company, we believe strongly that our current Equity evaluation offers an attractive opportunity for our investors.
We believe we've taken significant steps to strengthen our capital structure, deleverage our balance sheet, and position our company to enhance shareholder value through capital returns.
To capitalize on this unique opportunity to enhance the long-term shareholder value. Our board of directors recently, authorized a 3 year $300 million stock buyback program, which we expect to execute opportunistically while balancing it with our continued objective of deleveraging, our balance sheet at a rate of approximately $100 million per year.
Our focus as a management team remains on enhancing value for our shareholders through the disciplined allocation of capital and achieving a new level of financial success in 2026.
On a personal note, I would like to thank the Geo board for extending my employment contract to April 2029 allowing me to participate in guiding our company through the remainder of this presidential Administration,
That completes our remarks and we'd be glad to take any questions. Thank you.
We will now begin the question and answer session to ask a question. You may press star then 1 on your touchtone phone,
If you are using a speakerphone, please pick up your handset before pressing the keys.
If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.
At this time, we will pause momentarily to assemble our roster.
And your first question today will come from Joe Gomez with Noble Capital. Please go ahead.
Good morning. Congrats on the quarter and all the positive news.
Thank you. Thank you.
So I I just kind of wanted to to run through um, some of the numbers that that you you guys have given, um, just to make sure all the the same page. So it sounds like you've got
roughly 5,000 beds at existing facilities that are under contract, another 5,900 beds at the idle facilities.
And the potential that you could ramp up another 5,000 beds, kind of, in in temporary, let's call it. Um, um,
310 million, but if all 16,000 were to come on, what kind of Revenue would that generate.
well, I think we're talking about an additional
5,000 or 10,000.
It would really be.
Full of pricing would be on the 5,000 temporary beds, the existing facilities.
There's pricing already established for that, right?
So, I mean, we'd really be talking about 5,000 additional beds. There's some upside in the existing facility beds. That's probably about 250 million. That's at approximately 50 million per thousand beds of that type. Because those would be ex, uh,
Incremental beds. That were the overhead is already paid for, they'd be expansions of an existing facility. So approximately $250 million.
Okay, great. Thanks for that. Um, and then I just wanted to turn to ISAP for a second here. So, you know, the population that said there have been, you know, stable to modestly declining, you know, from 1855 to roughly 183 today, our most recent ICE numbers.
Um, but there's been a a lot of discussion, our reports. I guess, I should say uh the potential of moving from the the smart link application to the ankle monitor application. Uh, now you guys hearing that what could that be the implication of that because the the ankle monitors generate you know, almost 3 times the amount on a tech cost on a daily basis as the smart link does um and that would use up funding faster, I guess so to to, so, to speak. Um, so I just wondering, ah, you know, what you guys are hearing on that, you know what, you think of the potential be and would you have the capacity? Um, you know, on the ankle monitors, if all of the sudden they decided to to move more towards ankle monitors and then the smart link application
we we've stocked up the inventory on ankle monitors, and as you pointed out, it is more expensive device and it, it would require
I believe additional funding to the isap contract, which may be available through a reprogramming of some of this money that will be coming available later on this month.
Through the reference affiliation Act.
Okay.
and then,
as you're
talked about their goals here, you know, the the the um Sherry purchase program congrats on on us finally getting there. Um, and but also looking to continue to reduce debt by about uh,
You know, I think you said 100 million. Um,
You know, historically the goal has been that 150 to 175 million. Um, that was, you know, obviously prior to the Oklahoma facility sale.
Are you looking to do any additional?
Debt reduction, the second half of this year are are we good at where we are? And then we'll start looking at that 100 million going in you know, 26 and Beyond.
Joe, I think the way I would characterize it, you know, we...
We expect to.
To generate additional cash excess cash in the back half of the year. So that's going to enable us to to continue to to de-lever in the in the back half of this year.
And really, when we think about the play here of a 100 million share repurchases, and we target the $100 million, uh, continued reduction in debt, you know, over the next couple of years, you know, the benefits that I see for us is, you know, we have opportunities to um,
To have excess cash uh in excess of that $200 million. We're looking at deleveraging which reduces our cash, interest expense it frees up cash. We have the growth as we move into 2026, the Top Line will be higher and that will enable us to uh uh generate more cash flow. And then as we move into 2026, we'll get back to more normal capital expenditure. Um,
Time. You know, will you know, give us an opportunity here to to further pay down debt and reduce uh, cash interest expense. But uh, you know, getting back to your original point, we expect the, the further, reduce our debt, balances over the course of the remainder of the Year. While opportunistically looking at buying back shares,
Okay, great and and 1 more, if I met, um, you know, there's been a lot of talk obviously because it's in the news on, on, on ice and and, you know, the the whole opportunity at ice.
On the state level. I was just wondering, you know how things are are going there. You know, often times you you you see per deem increases in the the June July time frame wondering if you guys saw any of that. Um and and you know are you are there any opportunities on the state level? Are we just really focused on on the ice at this point?
Well, in Florida, we're involved in competitive bidding on three facilities.
Two of which we operate presently on 1 and 1st. Uh hasn't diminished at all. It's actually increased since George's point. We're involved in a competitive reprogramming of three major correctional facilities here in Florida, which we have operational experience with.
Uh, and then also, we're we're working with our other clients around the country to support their initiatives as well. And increased capacity at the state level is is driven generally speaking by the budget process. And this year, the legislative activity, uh, that you referenced at the June July timeline, we did see Improvement, uh, operationally and our Georgia environment, the legislative process supported an additional increase in our funding streams for that project. And again, we're optimistic that other jurisdictions are supporting uh, those discussions presently with their General assemblies. And so again, very committed to the, uh, efforts of supporting our state clients and a meeting their needs as they present them.
Great, I'll get back to you. Thanks, and congrats again on the quarter, and the fantastic growth opportunities ahead of us.
Thank you, Joe. Thank you.
And your next question today will come from Matt Earner with Jones Trading. Please go ahead.
Hey guys, thanks for taking the question. Um, and congrats on getting that, uh, Sherry purchase agreement from the board. Um, that's great there. So, you know, as private beds, kind of fill up towards that 100K level and it looks like we've got pretty good decent line of sight into that ramping up kind of by a year end early. Once you up next year. Um, you know, how are you guys positioning yourselves for management contracts at some government facilities? Uh,
You touched on it during the prepared remarks, a little bit with the defense contractor and those agreements there, but any expansion would be great. Thank you.
Um, I'm really kind of unclear as to what your question is.
Could you repeat that?
Yeah, so kind of the management of, you know, government facilities. So it's not company-owned.
Well, you know, we we look at that fairly carefully. We, we had some opportunities here in Florida and, um, we, we kind of passed on it, but, uh, we prefer to be the owner of the facility. And we have several, that are idle that we would like to reactivate. And they are primarily, uh, former Bop facilities that are high security. And really ideally s suited for, as I said, in my previous remarks, ideally suited for ice in the US Marshal Service, as well as the view of Prisons, you know, who was the previous user of these facilities. They're primarily self facilities. So it's high security. They, they have, uh, perimeter fencing in in some places they have, uh, towers that Overlook the facility. So, you know, our physical plant inventory, that's available.
Able to, the 3 federal agencies is quite substantial. And that's really where our focus is right now, as well, as I, I said it earlier that there's a lot of activity going on in our transportation division. You know where they are.
So, that division has really taken off.
Literally, and figuratively.
But, Matt, to further state the obvious, obviously we're partnered with a defense contractor, positioning ourselves for procurement activity in the event that the DOD, in partnership with Homeland Security, considers projects in the future. And obviously we're committed to ensuring that we support the mission of the client, Immigration and Customs Enforcement. So we're always evaluating next steps, if you will, and positioning ourselves to support ICE.
Great. That's helpful. Caller, that's all from me. Thank you, guys.
Your next question today will come from Greg Gibbus with Northland Securities. Please, go ahead.
Great. Thanks guys. And congrats on the quarter. Um, you know, wondering if you could maybe follow or I guess if I could follow up on, you know, an update on the opportunity to contract additional facilities with the Marshal Service. You know, I know that there's the New Mexico facility Big Spring in Texas. Uh, Rivers facility in North Carolina, with multiple rfps out there, um, if you can give kind of an update on on your outlook there and timing on those.
Well, the the dis discussions are underway they've begun some time ago. And I think there's a general awareness of the location of these facilities. And um, you know, and funding is always the, the big issue, you know. Uh, I think all the agencies or or towards the tail end of their budget year, which expires the end of September and in particularly, if I say have a we have read that they have a budget uh deficit of excess of a billion dollars. So they have to be careful as to when they contract. I think everybody is waiting for this reconciliation funding which will occur towards the middle or the end of this month, but, uh, the agencies are are well aware of these locations for um,
Some of the agencies like maybe the Marshal Service in particular. It it that it constitutes, uh, uh, uh, consolidation play based on certain Geographic areas, I mean, in the East, or the west of the country. And we're, uh, a lot of times through the Marshal Services, really.
Contracting for beds with several, um, Sheriff's jurisdictions in a geographic area. And.
Our facilities allow them to consolidate those beds into one secure, high-secure facility where they're the exclusive client. They have exclusive control of the facility, which is generally their preference, rather than a fragmented system covering a large geographic area.
Yeah, Greg, I mean I think is George is described. We are in discussions with the marshals were
You know, cautiously optimistic, there's some some opportunities ahead for us but um you know as it relates to growth obviously ice is a big priority. Uh, but you know and somebody mentioned earlier we've got some good opportunities at the state level, um, the Marshall level as well, and, and transportation. So, you know, we think about our business holistically, we? We think that we're fairly Diversified in multiple components within our, our business segments. We we're seeing lots of different growth opportunities and we think that, you know, over the coming months that that's going to pay dividends
Great. Thanks, that's helpful and good to hear. Um, you know, given the budget deficit with ICE, um, and now that we're past, you know, the budget reconciliation or additional funding.
You know, I guess how are you expecting the pace of facility reactivation timing? Once that funding is available? You know, we call it middle or end of this month. And, you know, I guess secondly, like as I kind of communicated to you that they intend to ramp BICEP participants once that detention capacity is maximized. Do you still anticipate that contract to be extended for 12 months?
they haven't communicated the
At this time, the expansion of high staff, um, you know, their focus is intensely on me. Uh, scaling up the detention capacity. So they are communicating with.
Many. Uh,
Texas is probably one of them to, you know, scale up from the capacity that.
Prospectively available by the private sector, which I estimate to be.
75 to 80,000 beds for them to get to 100,000. They need, um, several governmental Partners, you know, as, uh, indicated by the the facility recently in South Florida. Um, that has capacity of for, I believe 3,000 beds and there'll be another 1 for 2,000 beds and it'll take several of these facilities to patch together. You know, the gap between the private sector and the ultimate objective of a 100,000 beds. And that's that's about 30,000 beds that they need to patch together to get to the 100 thousand.
And then on our end, you said, yep. We're on Earth, a 30-day extension. And as George made in his remarks, we do anticipate an extension of 6 to 12 months, uh, to be awarded to us here in the near future.
Got it. Thanks, guys. Great to see the buyback. Um, and congrats on the quarter again.
And your next question today will come from Brendan McCarthy with Sid and Co. Please go ahead.
Great, thanks. Good morning, everybody. I appreciate you taking my questions here.
When is it started off on the lake, and the Riley Act? I think at one point it was discussed that the ACT could lead to the need for an incremental 60,000 beds.
Uh, but it sounds like the base case here is, is really close to 100,000 beds, um, potentially by year end, just curious if that base case includes the impact of that act. And and I guess how we can think about the overall impact on industry detention numbers.
I'm not really sure how to think about it because the original objective was just to get to the 100,000 beds before the passage of that act.
And so I've said, you know, the present my
Um, estimated capacity of the private sector.
Um, as we sit today, it is about 75,000 to 80,000. That's before considering, you know, scoping out vacant facilities that may be at the federal and state level as to whether they can be renovated and repurposed for additional capacity with what?
I think it has a lot of potential.
so,
As I said, Marshall's scale up to this 100,000 beds once they reach that.
Through. Uh, the current known means, you know, I think that there will be a re evaluation of, how do you get beyond that? And you know what, what structures are available, let me legal requirements and uh agency requirements and I think some of those structures are probably available at the federal and state levels around the country. They're not getting the attention right now because um, you know, our structures are readily available and uh ice is pursuing. Some temporary type of structures with it, with various Republican states and so it's the low-hanging fruit that gets the attention first. And then after that, it's accomplished, they'll be a re-evaluation of what other opportunities exist around the country.
Understood. I appreciate the detail there. Um, and then I wanted to touch on the Fiscal Year 2026 Homeland Security Appropriations Bill. Um, can you provide an update on maybe the verbiage in that bill? Has there been any release there or any, you know, detail on, um, whether it be alternatives to detention or any new updates with detention?
Bill there. There's no specific.
Text or Narrative of about the isap program, you know, it was a bundle of money for broad categories of services.
And, you know, those are such large amounts because I think.
uh,
Isis.
Budget presently is only 8 8 billion dollars, so you're talking about tremendous, uh, scaling up of the budget, um, that will look occur over a period of time and I believe all those monies are are have been appropriate and improved for the next 4 years you know 1 of their objectives. Uh that they are focusing on. Right now is higher in 10,000 more ice officers which is is very expensive and very complicated and very time consuming, you know, it it will take
A long time to get 10,000 people recruited.
Uh, screened, trained, and knowledgeable about how to carry out their jobs, and they are needed, you know, to facilitate, you know, the, uh,
The filling of those 100,000 myths requires more people to go across the country and identify individuals who are here unlawfully and who have committed crimes. You know it takes several people.
At any given event, you know, one person doesn't go out and do this job by themselves. It's a whole team of people, and I definitely need some more employees. That is definitely one of their priorities right now.
Understood. That's all from me. Thank you.
Thank you.
And your next question today will come from Raj Sharma with Texas Capitol. Please go ahead.
Yeah, thank you for taking my questions. Congratulations on the solid results in the Outlook.
Um, I
I had a question on I just, if you could delve into the dynamics of why, um, you expect.
um,
The.
Ice monitoring and supervision to stay stable, Q3 and Q4 is this due to the ice budgeting constraints, uh, in, you know, solely uh, till they get funding in August?
Um, I mean, how does that, how does that, um, work with them wanting to, is that when the tensions get up to, uh, max levels? Um, and they've talked about wanting to detain 180,000 more. Uh, can you talk about the timing of that? Is, um, and the color around that?
Well, as I think we've said that, we think that the focus of ice right now and through the balance of the year will be on maximizing the tension capacity. Um uh, with respect to the isap program, certainly this budgeted year. They've they've tried to stay within their budget, which has not been expanded. And you know, as we've said, even the detention budget has been exceeded. Uh, so they've they've had a balancing act. Uh, as we speak uh, at this time of the, of the budget and the additional funds will not materialize until we believe later this month.
But at once, they get those.
Funds, additional funds. I think that the priority and the focus is still going to be from. We believe the balance of this year will be on maximizing detention capacity because it's complicated. It's.
Getting a facility up and going and operational uh with the respect to who was involved in operating the facility as well as the ice Personnel that are supporting that facility is very complicated and uh it's never been done at this level before in our history. So you there these are Uncharted
Ordered waters for the agency, you know, to, um,
Expand their platform of detention nationally, you know, around the country to literally more than doubling the size of the previous administration.
It it can't be done overnight and it's it requires a lot of attention and requires more, I staff.
Um, got it. Thank you for that.
and then, um,
Of the 118 million Majesty but uh in in Q2 what was the contribution from the newly ramping facilities? Um, the 4 facilities and then I have a follow on on the, on the contribution going forward.
Well, well, Raj. We don't give specific, you know, contributions by facility. But you know what? What we can tell you is,
Um, you know, owned facilities. Activation of those facilities. We've talked about.
Um, this is the revenue, the annual revenues that will be.
Driven out by those facilities. And if we've said in the past, own facilities, typically margins are somewhere between 25% and 30% on those revenues. And so, you know, as we...
um,
We, we talked about it, you know, activating 4 facilities, you know, to the tune of 200 or 250 million dollars. If you think about the math on that, you know, that'll generate 25 to 30% margins on that. So you're really, I think the big focus is as we ramp those up and they're and they're fully active and we're achieving the maximum revenues, which we expect to take place in 2026, that's where you where you're going to see the, the, the significant growth in me. But that
Got it. So, you've given the revenue contribution from the full facilities. Can I ask you this another way? When do you expect? Um
Them to reach mature margin profiles so that we can get those full 25% to 30% margins on the four facilities.
Yeah, I I I'd say you know, essentially 3 to 4 months after activation of the facility. So I think, if you think about Delaney Hall, Dre, North Lake, uh, we'd expect really the fourth quarter for us to be really, uh, maximizing the profitability, and got gotten through, what we'll call. Is the activation period, the hiring of the officers, the training of the officers right now. That's uh, it's a very costly effort. And, uh, I'd say by the time we get to the fourth quarter, um, you know, those facilities should be back, should be in a kind of what we'll call normal returning operation.
Wait, wait, wait. Thank you for that. Uh, I'll take my questions offline once again. Congratulations on solid results.
Thank you.
And your next question today will come from Ted Franchetti with Wedbush. Please go ahead.
Hey everybody, thanks so much. Um, Jay had to, um, Jay had to step off and will be likely following up with you guys, uh, this afternoon. But I just wanted to ask a couple quick questions. Um, sorry to keep going on on ISAP and monitoring. Um, but just wondering about the timing of, um,
of the extension to the end of August. And you mentioned in a previous question, um, about their, you know, the um,
The funding potentially being sort of reallocated or re, you know, reproduced post the bill, uh, the OBB bill getting done. Um, you know, was the ISAP contract.
Moved to the end of August this year, you know, to sort of allow for that money to flow. Is that, you know, a reason for that timing? Um, you know, and then I guess another question sort of about ISAP. Um, and the extension is essentially, you know, for me, do you have any different level of conviction about...
Winning that contract. Um, over the next 12 months versus your expectations over the last 6 to 12, like has anything changed there for you?
No, nothing's changed. Uh, you know, the...
The, uh, short-term extension, I believe we interpret is, um, to give additional time to consider whether it's a 6-month extension or a 12-month extension. You know, it's simple as that, which may require additional extensions as well, because once they, you know, it takes time for them to decide, you know, what their programmatic needs are within that kind of program. You know, do they take a different direction on, uh,
Who the the population is?
Submit proposals that are followed by a fairly lengthy evaluation process before there's a final award. So we
We expect that the process will take place sometime next year.
And we feel we've provided an excellent service for 20 years. Our ratings are...
Excellent. As we get rated in, I believe annually, we've achieved excellent ratings and we think we're in a highly competitive position for any rebid of this contract.
And we've invested in the infrastructure. We have 100 locations that we service. We have 2 call centers.
Uh and as George said, you know we've been the provider for the last 20 years and uh we really appreciate the partnership with Vice and isap and uh we're going to work really hard to do a great job for them.
1 quick follow-up. Uh, just as far as cash flow goes um,
You know, if if uh in 26, you exceed 200 million um in in free cash flow and and you allocate half of that to Debt Pay down and half of that to buy back. If you sort of exceed that 200 million level um you know with the incremental be Pro rata allocated to Debt Pay down and buy back or you know, would you prioritize
Repurchases.
Well it it's most likely to be Pro rata. Um but we'll also be opportunistic, you know, it it depends on what the stock price is uh, right now we think um, you know it's we think it's a very attractive price and that's why we're looking to to buy back stock. But uh, you know as as we said before it it probably be
Split between the two, um, you know, both uh, contributing some value back to our shareholders while continuing to pay down debt.
Thanks a lot.
Thank you.
And your next question today will come from Kirk LED Key with Imperial Capital. Please go ahead.
Hello, George, Dave, Mark, Pablo. I really appreciate you staying late. Um,
uh,
no problem.
Do you have a, um, a sense for the detention rate required to justify 100,000 detention beds? In other words, is it, you know, 3,000 a day equals 100,000 beds, or is there some simple rule of thumb we can use?
It is that, uh, simple rule of thumb is, you can describe that, you know, I think it was based on the objective of.
Deporting a million people a year. How do you do that? A million people a year? You need a 100,000 beds.
And you need to process those people, um, in 30-day increments. So each month, 100,000 people would be deported or approximately to get to the million, but that's just a theoretical model. I don't.
um,
It. And it's, um,
It's, um, impacted by lawsuits by, uh, probably in different jurisdictions around the country. And it's impacted by, you know, different rulings on expedited removals, and all environmental issues and all kinds of things. But that's.
That's some model that somebody came up with that we've heard many times: you need 100,000 beds and moving people out 100,000 per month to get to that million.
Yeah, I think the other way you can kind of think about it is...
You know, call it at the end of February or March, there were 41,000 beds full. It's grown to 57,000. So, over the last 3 months, the detention has grown by about 20,000.
Um, it started off slow. So, you know, it's probably possible to grow the detention by 20,000 to 30,000 every three months or so, and if you did the math that way, that's how you get to roughly 100,000 people detained by the end of the year. But I don't think there’s an exact science to it, George just described.
Got it? Yes, that's super helpful. I appreciate it. Thank you. And, uh, what percentage of the beds you contract?
To ice are, are, are under minimums or take or pay or...
Contractually guaranteed.
I think most of our beds now have some form of fixed price.
Okay, that's helpful. Thank you. Um,
And then, and then last topic, I mean, a lot of...
A lot of questions about ISAP. Um,
How would you characterize the 180,000 people they’re monitoring today? Is there?
Is there a certain?
way to
Describe that group. Is there a...
If funding was no longer a limitation, do you know how many people are actually in that group?
Well, the 183,000 is part of a...
8 to 10 million group of on detained? Uh,
Non detained docket.
Of people who, uh, have been determined previously not to go into detention, but need to be monitored. Uh, and that is a moving target and can be re-evaluated subsequently. Um, as some members in Congress have, um,
Articulated in a particularly I think, on a house resolution that all the people on the undetainable.
And, and, and where they are in their process of going before a judge and making sure they get to that.
Uh, court hearing.
So I I think that's still uh, yet to be evaluated or re-evaluated and I assume there will be as, uh, there is a rebid of the itep contract and what are the programmatic objectives of of that, that of that program?
Got it. I appreciate it. Thank you very much. That's it for me.
Thank you.
And your next question today will come from Ben Briggs with Donut Stonex. Please go ahead.
Yeah, hey, uh, good morning, guys, or I guess afternoon now, and, uh, thank you. Thank you for taking the call. Um, so first of all, congratulations on the quarter and a great day. Thank you for doing.
Um but so I I just wanted to get a little bit of clarity and and make sure that I'm doing the math right here. So it sound in the scripted portion of your call, it sounded like you said that there were 310 million of additional Revenue opportunities that are not baked in to guidance.
That are.
Uh, potentially going to come from ICE that. Did I hear that $310 million right?
That's right. Is it related to detention? It's either ICE or Marshals. That's right.
Are available capacity that hasn't been contracted.
Okay. So that $310 million was from ICE or U.S. Marshals.
Of additional revenue, got it. Okay. And then on top of that $310 million, there is $40 to $50 million of potential ice transportation revenue that you could potentially realize.
correct.
Understood is 15% EBITDA margins. The right way to think about that. Transportation revenue, just back of the envelope.
Uh, we haven't given that out. We haven't given that out specifically. Um, okay.
Yeah, correct. Okay, fair enough, fair enough. And then, as far as potential ISAP revenue is concerned.
Is there a revenue number that's not baked into EBITDA, where I should think longer term? You know, potentially you guys could realize, or is that not a number that you're prepared to give out yet?
I think our number is flat for the rest of the year. Yeah.
I'm going forward. You know, for us, we can give you our history. The history says back in 2022 and 2023, revenues at the highest level were $370 million compared to where we are today. Um, and so I think it wouldn't be appropriate for us to try to guess that. Um, but we do think that there's an opportunity for growth there, and that's going to generate additional revenue and profitability. But it's hard to quantify at this point.
Understood. Okay.
Thank you very much, guys. Uh, most of the rest of mine were answered. Um, and again, congratulations on the quarter and the growth.
Thank you. Thanks Ben.
We'll conclude our question-and-answer session. I would like to turn the conference back over to George Zoley, Executive Chairman of the GEO Group, for any closing remarks.
We thank everyone who has joined us in this lengthy presentation today and now look forward to the next call. Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.