The nation's two largest private prison owners and operators are cashing in on the federal government's decision earlier this year to back off its plan to buy warehouses and convert them into detention centers.

The Department of Homeland Security paid Tennessee-based CoreCivic $2.2B for four facilities in California, Minnesota and Kansas and expects to keep the company on to operate the properties as Immigration and Customs Enforcement detention centers. DHS has also agreed to pay CoreCivic and Geo Group $240M a year to reactivate defunct facilities amid a renewed push to detain and deport unauthorized immigrants.

The deals have been handed out amid an acceleration in the Trump administration's immigration enforcement activities.

In the first seven months of this year, ICE arrested more than 238,000 people, including more than 43,000 in July, the highest total under President Donald Trump's second administration, The Washington Post reported.

Between April and July, the number of immigrants in detention increased from 60,311 to 65,765, according to Trac Immigration.

"Last year's new contracts with ICE for additional beds and reactivation of formerly idle facilities will provide a significant earnings boost to CoreCivic, although the increase in detainees is moving at a slower pace than originally anticipated," Joe Gomes, a research analyst for Noble Capital Markets, wrote in a research report following the private prison operator's earnings release. "We believe there remains a substantial opportunity to provide ICE with additional beds and services."

After the president's campaign goal to deport a million people per year, ICE received $45B in last year's One Big Beautiful Bill Act to expand its detention bed capacity — and its strategy for spending that funding has shifted dramatically in 2026.

Initially, then-DHS Secretary Kristi Noem decided to pull back from the more than 40-year relationships it had built with CoreCivic and Geo Group and spend roughly $38.3B to purchase its own industrial warehouses and convert them into detention centers. ICE spent more than $1B on 11 vacant properties between December and April, paying an 11% to 13% premium compared to market prices.

Stocks for both companies dropped, with CoreCivic's share price falling from $20 in January to $16 by mid-February and Geo Group's falling from nearly $19 in mid-January to $13 in mid-February.

But the public fallout from local, state and federal lawmakers was almost immediate, including lawsuits that resulted in judges blocking two conversion projects, stymying the plan.

The strategy started to shift after the White House replaced Noem with former Oklahoma Sen. Markwayne Mullin to lead the department at the beginning of March. Not too long after, the department paused the program and launched a probe to investigate how contracts were awarded.

DHS then reportedly decided it wanted to reverse course and sell seven of the 11 warehouses acquired, while still planning to move forward with converting the remaining four warehouses. It is unclear whether the department has moved forward with those plans.

Now ICE has turned back to CoreCivic and Geo Group to expand detention capacity.

"We believe the federal government is continuing to pursue the priority of increasing immigration detention capacity to 100,000 beds or more and consolidating to fewer, larger facilities," Geo Group CEO George Zoley said on the company's earnings call Thursday afternoon. "As a 40-year partner to ICE, we expect to be part of that solution."

Geo Group and CoreCivic's share prices have doubled since their February nadirs, far outpacing the overall stock market.

CoreCivic this week announced it sold the shuttered 1,600-bed Prairie Correctional Facility in Appleton, Minnesota, for $495.6M and landed a new management deal with ICE to reopen the facility in a deal that is expected to generate $75M in annual revenue. ICE also purchased the Midwest Regional Reception Center in Leavenworth, Kansas, for $238.4M.

Those deals were on top of the $1.5B ICE paid CoreCivic for the 2,560-bed California City Detention Facility and the 1,994-bed Otay Mesa Detention Center last month.

The Tennessee-based company's revenue increased by 27% year-over-year in the second quarter, according to its earnings report. Following the transactions, CoreCivic updated its guidance for the company's net income this year from between $147.8M and $157.8M to roughly $1.5B — a nearly tenfold increase, fueled by the property sales.

The company is using the funding for a $500M stock buyback and to pay down its debt.

"This is more liquidity than the company has ever had and provides us with significant flexibility to execute our capital allocation strategy and growth plans," CoreCivic Chief Financial Officer David Garfinkle said on the company's earnings call Thursday morning.

Geo Group is riding a similar wave, with profits up 63%, according to its second-quarter earnings report.

The Boca Raton-based company signed two deals totaling $165M with ICE to reopen idle facilities — an $85M annual contract in July to operate the 1,188-bed Big Horn Facility in Colorado and an $80M contract in August for the 1,320-bed Rivers Facility in North Carolina.

Geo Group expects the sites to be up and running fully by early next year.

Both companies are in negotiations with the federal government to continue selling and operating facilities, signaling they don't expect the Trump administration's desire to increase detention capacity — or rely on its private prison partners — to diminish anytime soon.

"There's been really a number of organic shifts in demand, and we've been there consistently through that process and continue to believe we provide an optimal solution for ICE to the extent they wish to use it," CoreCivic President and CEO Patrick Swindle said.