Clean Harbors (CLH) Q1 FY26 earnings call: guidance and Q&A

How should we think about the Q2 EBITDA guide from a segment perspective, given strong exit trends in March? Also, how does the field expansion generate cross-sell opportunities across businesses?

SKSS is expected to overperform, with Environmental Services showing similar growth patterns to Q1. Industrial Services remains cautious. Field Service expansion complements Technical Services and Safety-Kleen Environmental by providing emergency response, vacuum services, and other needs, leveraging the existing customer base and expanding the company's footprint for emergency response.

“Our job is to make sure that as we grow out our footprint that when we have a technical service branch footprint or SKE branch that we're complementing that by building out all of our Field Service branch capabilities in those same locations and growing our cross-sell with all of our lines of business.”

asked by Noah Kaye · answered by Eric Gerstenberg

Is there any impact from rising diesel costs on the '26 guide, and where do you see the greatest opportunities for AI (top-line, bottom-line, efficiency, safety)?

Rising diesel prices have an immaterial effect on Environmental Services' profitability due to a monthly reset recovery fee. For AI, the company has been using it since 2017 for safety, compliance, and profitability drivers like invoice audit automation and faster profiles, with ongoing projects aimed at further improvements across these areas.

“It's all that and many other things we do as an organization. With that type of safety, compliance and profitability drivers, whether it be invoice audit automation, faster profiles and the list goes on and on.”

asked by Bryan Burgmeier · answered by Michael Battles

What is the cadence of demand in Industrial Services, especially for refinery turnarounds, and what is the potential upside? Can you discuss the size and timing of potential M&A deals?

Refinery turnaround counts are consistent, but they are shorter 'pit-stop related' due to refiners maximizing fuel production. The company is cautiously optimistic but doesn't have large turnaround activity built into H2 guidance. M&A pipeline consists of many smaller tuck-in deals, primarily in Environmental Services, with some very close to closing.

“So these are many out there. I think some are very close to closing. Some are -- but there's plenty in the mostly smaller deals, tuck-ins type of transactions. But I think those have been plentiful this year.”

asked by Jerry Revich · answered by Michael Battles

Does the 'pit-stop' nature of Industrial Services turnarounds suggest something more meaningful in the back half? Which market verticals are driving positive trends in ES?

No change in the pricing environment is expected. While there's hope for more heavily loaded turnarounds in Q3/Q4, current guidance assumes a flattish year-on-year for Industrial Services. Strong trends are seen in multiple ES verticals, including healthcare, retail, pharma, and manufacturing, driving volume growth across Technical Services and SK Environmental.

“Jim, the only thing I'd add to that is that you've been covering us for a long time. We've been doing this for a long time. And normally, we don't raise guidance after 90 days in the quarter, whether we -- unless there's an M&A or something like that. So the fact that we're raising guidance on both segments here just after just giving guidance 6, 7 weeks ago, should tell you about our view as we think about the rest of the year.”

asked by James Ricchiuti · answered by Michael Battles

Has the Iran conflict impacted customer behavior or caused inflationary pressures outside of energy customers? Are we still waiting for finalized PFAS guidelines to accelerate growth, or is the current guidance sufficient?

No significant disruption from the conflict has been observed, and it may even drive more U.S. manufacturing. For PFAS, the company's pipeline is accelerating (25-35% growth range) due to customer response to the existing framework and regulatory guidance from DoD and EPA, even without more formalized specific items.

“So I think that the point is that we're seeing that framework being enacted, customers acting more and more responsibly, regulatory agencies acting more and more responsibly. There definitely seems like there's more momentum going into this year than a year ago at this time.”

asked by Lawrence Solow · answered by Eric Gerstenberg

Will the SKSS benefit from base oil spreads flow ratably through Q2-Q4, or is it more front-loaded? Is the Kimball incinerator running on a normal schedule and taking normal waste streams?

The base oil pricing benefit is expected to be spread between Q2 and Q3, with more insight into Q2. Q4 assumes pricing may normalize. Kimball incinerator ramp-up has gone extremely well, exceeding tonnage targets and expectations, running well, and on track financially, expected to contribute an additional $10 million to $15 million in EBITDA in 2026.

“Kimball ramp-up has gone extremely well. We more than exceeded our tonnage targets in 2025 were out of the gate exceeding our expectations. And in 2026, the plant is running well.”

asked by David Manthey · answered by Eric Gerstenberg

How is Clean Harbors thinking about holding onto charge-for-oil actions in a base oil upcycle? Can you provide insight into realized base oil prices in Q1 and exit rates?

The company worked hard to shift to a charge-for-oil model and is not interested in reverting to pay-for-oil, aiming to be selective to maintain talent flow to re-refineries. Base oil prices certainly went up towards the end of Q1, contributing to the Q1 beat and Q2 guide, but specific realized prices were not disclosed.

“Adam, we worked really hard to change the industry from a pay for oil to a charge for oil, and it's a long, painful 18 months, and we're not that interested in giving it back.”

asked by Adam Bubes · answered by Michael Battles

Can you clarify the breakdown of the $30 million SKSS guide increase across quarters? Is 20% still the right PFAS growth rate, or is it accelerating?

The Q1 beat included some benefit, with the remaining $30 million increase spread pretty evenly between Q2 and Q3, and Q4 being flattish to slightly up. For PFAS, the growth rate is accelerating to a 25% to 35% range, driven by a strong pipeline and increased customer activity.

“It's more in the 25% to 35% range, what we're seeing initially year-end during the year. So a strong pipeline.”

asked by James Schumm · answered by Eric Gerstenberg

What is your perspective on the EPA guidelines for PFAS, any differences from DoD, and what are you hearing from customers?

The EPA and DoD guidance revalidates Clean Harbors' end-to-end PFAS solution, confirming their proven capabilities. Customers are responding to the company's framework, accepting their guidance for needs like FFF system change-outs and site remediation, indicating increased market momentum and responsible action from both customers and regulatory agencies.

“Tobey, just revalidates what we already know that we have a great end-to-end solution, as Eric said in his prepared remarks, we have -- we can solve any of our customers PFAS problems, and we've proven that both internally with our own framework as well as externally with the Department of War or the EPA.”

asked by Tobey Sommer · answered by Michael Battles