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    CLH
    Earnings call· Jun 2026(Q2 FY26)

    CLEAN HARBORS Q2 FY26 earnings call CLH

    Jul 29, 2026 Source

    Executive summary

    Clean Harbors Q2 FY26 — Record Revenue & EBITDA, Strong ES Performance, and Strategic Growth Initiatives

    Clean Harbors delivered record Q2 FY26 results, driven by strong performance in both Environmental Services and Safety-Kleen Sustainability Solutions. The company is strategically investing in new growth vectors like data centers and expanding its service footprint through acquisitions, while capitalizing on favorable market trends such as reshoring and increased demand for disposal capacity. Management is bullish on continued profitable growth for the remainder of the year and beyond.

    Highlights

    5

    • Achieved record revenue of $1.74 billion, up 12% year-over-year.

    • Delivered record adjusted EBITDA of $409 million, a 22% increase year-over-year, with a consolidated adjusted EBITDA margin of 23.6% (up 190 basis points).

    • Environmental Services revenue grew by over $100 million, with Technical Services up 18% and Safety-Kleen Environmental Services up 11%.

    • Secured a 10-year disposal contract with an estimated value of $600 million, commencing in Q4 FY26.

    • Safety-Kleen Sustainability Solutions (SKSS) adjusted EBITDA increased 143% due to elevated market pricing.

    Concerns

    3

    • Industrial Services revenue was comparable to Q2 FY25 due to limited refinery downtime and turnaround activity.

    • SG&A expense as a percentage of revenue increased year-over-year to 12.4% due to higher incentive compensation, insurance, and strategic investments.

    • Corporate segment negative adjusted EBITDA is expected to increase by 8-10% compared to FY25.

    Guidance & targets

    11
    CategoryTargetConfidence
    FY26 Adjusted EBITDA
    $1.35B - $1.41B
    high materiality
    High
    FY26 Adjusted EBITDA Growth
    ~18%
    high materiality
    High
    Q3 FY26 Adjusted EBITDA Growth
    24% to 28%
    medium materiality
    High
    FY26 Environmental Services Adjusted EBITDA Growth
    6% to 9%
    medium materiality
    High
    FY26 Safety-Kleen Sustainability Solutions Adjusted EBITDA
    ~$275M
    high materiality
    Medium
    FY26 Corporate Negative Adjusted EBITDA Increase
    8% to 10%
    medium materiality
    High
    FY26 SG&A Expense as % of Revenue
    mid- to high 12% range
    low materiality
    High
    FY26 Depreciation and Amortization
    $475M to $485M
    medium materiality
    High
    FY26 Net CapEx (excluding strategic projects)
    $370M to $430M
    high materiality
    High
    FY26 Adjusted Free Cash Flow
    $520M to $580M
    high materiality
    High
    Data Center Annual Revenue
    $200M
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Environmental Services
    Achieved 17th consecutive quarter of year-over-year improvement in adjusted EBITDA margin and 19th straight quarter of EBITDA growth. Strong demand for disposal assets and collection network, including a large PFAS-related filtration project contributing over $30M revenue.
    Technical Services revenue growth: 18%Safety-Kleen Environmental Services revenue growth: 11%Field Services revenue growth: 3%Industrial Services revenue: comparable to Q2 FY25Adjusted EBITDA margin change: up 10 bpsIncineration utilization: 91% (vs 86% a year ago)Landfill volumes: up 7%
    		increased by more than $100M——27.9%
    Safety-Kleen Sustainability Solutions
    Outperformed due to elevated market pricing from global lubricant shortages and strategic initiatives like Group III gallons production and increased blended volumes. Expects supply-constrained conditions to extend into Q3.
    Adjusted EBITDA increase: 143%Waste oil collected: 61 million gallonsBlended direct gallons sold: 11% of total volumes sold
    		greater than 40% increase——increased 143%

    Operational metrics

    17
    Total Revenue
    $1.74Bup 12% YoY
    Q2 FY26

    Reflecting continuation of trends from Q1.

    Adjusted EBITDA
    $409Mup 22% YoY
    Q2 FY26

    Driven by outperformance and strong execution from both segments.

    SG&A as % of revenue
    12.4%increased YoY
    Q2 FY26

    Primarily due to higher incentive compensation, insurance and claim-related costs, and strategic investments.

    Net debt-to-EBITDA ratio
    2x
    Q2 FY26

    At quarter end.

    Blended interest rate on debt
    5.2%
    Q2 FY26

    At quarter end.

    Shares bought back
    84,000
    Q2 FY26

    Approximately 84,000 shares of stock.

    Average share buyback price
    $298
    Q2 FY26

    Average price per share for buybacks in Q2.

    Remaining share repurchase authorization
    $550M
    June 30

    Just under $550 million remaining under authorization.

    Total recordable incident rate
    0.46
    YTD

    Year-to-date performance, keeping on track for 2026 goal.

    PFAS business growth
    30%+YoY
    YTD

    Accelerated growth this year, even excluding a large Q2 project.

    Industrial Services specialty lines growth
    14% to 16%YoY
    YTD

    Growth in specialty lines of business within Industrial Services.

    Industrial Services base business growth
    2% to 4%
    YTD

    Revenue growth in the industrial base business.

    Safety-Kleen Environmental Services growth split
    60% pricing / 40% volume
    Q2 FY26

    Breakdown of 11% revenue growth.

    Data Center Total Addressable Market
    $8B-$10B
    2030

    Estimated TAM by 2030 for services provided.

    Data Center market CAGR
    20%annually
    through 2030

    Expected market growth rate.

    Data Center annual revenue
    $15M-$20M
    FY26

    Estimated revenue for the current year.

    Data Center margin
    mid- to upper 20s
    current

    Expected margin for the data center business.

    Industry KPIs

    5
    MetricValueDetails
    Volume1/3%
    Core price60%%
    EBITDA margin23.6%%
    Safety turnover0.46TRIR
    Recycling commodity impact143%%

    Orderbook & backlog

    1
    10-year disposal contract$600MQ2 FY26

    Estimated value, with options to expand scope and extend duration. Commences Q4 FY26, expected to generate ~$10M revenue in FY26. Expected to reach full capacity by 2030.

    Product announcements

    1
    ProductTypeDetails
    Integrated Data Center Solutionlaunch

    Deals & partnerships

    2
    ES&HRegional leader in field services and emergency response services in the Gulf region.$305M

    All-cash transaction, subject to regulatory approval. Headquartered in Louisiana with 13 service branches across Louisiana and Texas, many coastal locations supporting maritime service. Known for on-water responses and carries Coast Guard's highest Oil Spill Response Organization classification. Includes 'Forefront' service for emergency response readiness.

    Terra NovaNew England-based field services and waste oil collection business.$30M

    Recently closed acquisition. Will support gallons for New Hampshire re-refinery and provide more spill response capabilities.

    Capital programs

    4
    Data Center Investmentunderway$50M

    Benefit: increase specialty equipment, tankage, and vehicles needed to service customers

    Additional CapEx investment to support growth to $200M annual revenue by end of 2028.

    SDA unitunderway
    Period spend: $85M

    Expected spend for FY26, part of strategic growth investments.

    Vacuum truck fleet expansionunderway
    Period spend: $25M

    Expected spend for FY26, part of strategic growth investments to support Safety-Kleen Environmental Services growth.

    Kimball incinerator ramp-upunderway

    Benefit: EBITDA contribution of ~$10M

    Ramp-up continues to go well, tonnage expectation ahead of plan. $10M contribution is hitting the mark.

    Risks & headwinds

    3
    Limited refinery downtime and turnaround activityQ2 FY26, potentially H2 FY26

    Industrial Services revenue comparable to Q2 FY25; turnaround count down ~1/3 YoY

    Mitigation: Focus on specialty lines of business (up 14-16% YoY), base business growth (up 2-4%), and new growth areas like data centers to offset decline. Well-positioned for turnarounds when they occur.

    Uncertainty in SKSS market conditionsQ3 FY26 and beyond

    Substantial uncertainty around the duration of current market conditions and impact on petroleum-derived products like base oil.

    Mitigation: Strategic investment initiatives like Group III production, more blended volumes, and closed-loop offerings are expected to position the business when base oil and blended prices return to pre-war levels. Goal to maintain 'charge for oil' model.

    Increased Corporate segment costsFY26

    Negative adjusted EBITDA expected to increase by 8-10% compared to 2025.

    Mitigation: Driven by higher incentive compensation, insurance claim costs, acquisition impacts, and strategic investments. Expected to remain flat as a percentage of revenue.

    What to watch in Q3 FY26

    5

    SKSS Adjusted EBITDA cadence

    Q3 FY26
    Current$93M (Q2 FY26)
    TargetSlightly better than Q2, then trending down in Q4

    Why it matters

    Indicates the sustainability of elevated base oil prices and the company's ability to manage re-refining spreads, impacting full-year guidance.

    I think pretty similar to what you just mentioned, when we move into Q3, assuming kind of pricing remains at an elevated point kind of similar to where we are today, and then begins to kind of trail back down kind of in Q4. So we see -- what I would tell you is kind of we see Q3 here maybe a little bit better than Q2, just have some differences around some turnaround timing that we had early in Q2, and then Q3 kind of trending down for the balance to arrive at that $275 million.

    Q&A highlights

    7

    Can you provide more detail on the components driving the ES guide increase, especially regarding Industrial Services?

    The ES guide increase is driven by the Terra Nova acquisition ($10M), strong Q2 momentum (volume, pricing), and the new long-term contract. Industrial Services is expected to be flattish for the back half, with potential upside from refinery turnarounds. Field Services is performing well.

    “The remaining pieces there, certainly, the good momentum we're seeing exiting June and into the second quarter has been strong, both on the volume and continued pricing side. The new contract that we talked about will kick in, in the fourth quarter. We've got some upside from that.”

    asked by Patrick Brown · answered by Eric Dugas

    2 min read7 chapters

    Detailed Narrative

    01

    Strong Q2 Performance & Market Trends

    Clean Harbors achieved record Q2 revenue of $1.74 billion and adjusted EBITDA of $409 million, with a 23.6% adjusted EBITDA margin, marking its 17th consecutive quarter of year-over-year adjusted EBITDA margin improvement in ES. This performance was driven by high utilization rates of disposal assets, strong demand for Technical Services (up 18%), and robust growth in Safety-Kleen Environmental Services (up 11%), reflecting favorable market trends like scarcity of disposal capacity and global lubricant shortages.

    02

    Strategic Long-Term Contract Win

    The company secured a 10-year disposal contract with a manufacturing customer, valued at an estimated $600 million, leveraging its incineration and complex wastewater treatment capabilities. This contract, commencing in Q4 FY26 and expected to reach full capacity by 2030, validates Clean Harbors' unique capabilities and positions it to capitalize on the reshoring of U.S. manufacturing.

    03

    Entry into Data Center Market

    Clean Harbors is launching an integrated data center solution, targeting $200 million in annual revenue by the end of 2028. The initial focus is on the construction phase with industrial services, chemical passivation, and water filtration, with plans to expand into maintenance services. The company estimates a total addressable market of $8 billion to $10 billion by 2030 and will invest an additional $50 million in CapEx over three years to support this growth.

    04

    Acquisition of ES&H

    Clean Harbors announced the acquisition of ES&H for $305 million, a regional leader in field services and emergency response in the Gulf region. ES&H is expected to generate $90 million in annual revenue and $30 million in adjusted EBITDA, with $5 million in cost synergies post-first year, accelerating the growth and coverage of Clean Harbors' Field Services business.

    05

    SKSS Segment Rebound

    The Safety-Kleen Sustainability Solutions (SKSS) segment delivered a 143% increase in adjusted EBITDA, driven by elevated market pricing due to global lubricant shortages and strategic initiatives like Group III gallon production and increased blended volumes. The company expects supply-constrained conditions to extend into Q3 and is focused on its closed-loop offering to manage cyclicality.

    06

    Capital Allocation & Growth Investments

    The company maintains a strong balance sheet with a net debt-to-EBITDA ratio of approximately 2x, enabling both M&A and internal strategic investments. Key internal investments include the SDA unit, vacuum truck fleet expansion, and the new data center initiative, all aimed at accelerating growth and increasing profitability.

    07

    PFAS Business Acceleration

    Clean Harbors' PFAS business has seen accelerated growth, increasing over 30% year-over-year, excluding a large project in Q2. This growth is driven by increased demand, including a large PFAS-related filtration project resulting from prior emergency response work, and momentum from the DoD lifting its moratorium on incineration, leading to increased activity with military installations.

    AI-generated summary of the company’s earnings call. Not investment advice.