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    CWST
    Earnings call· Jun 2026(Q2 FY26)

    CASELLA WASTE SYSTEMS Q2 FY26 earnings call CWST

    Aug 7, 2026 Source

    Executive summary

    Casella Waste Systems, Inc. Q2 FY26 — Strong Pricing and Landfill Volumes Drive Revenue Growth

    Casella Waste Systems delivered solid Q2 FY26 results, driven by robust pricing execution and strong landfill volumes, despite margin headwinds from fuel and Resource Solutions. The company is actively integrating recent acquisitions and investing in technology to drive long-term efficiencies and scale, with a focus on unlocking synergies faster in the coming quarters.

    Highlights

    5

    • Revenue increased 16.9% year-over-year to $543.7 million, driven by acquisitions and same-store growth.

    • Solid waste pricing was up 5.5% overall, with collection up 5.8% and disposal up 4.7%.

    • Landfill volumes increased 8.4% year-over-year, reflecting strong activity and internalization efforts.

    • Adjusted EBITDA grew 12.5% year-over-year to $123.2 million, with 5.7% organic growth.

    • OSHA metric improved 34% year-over-year, indicating better safety performance.

    Concerns

    4

    • Adjusted EBITDA margin decreased 80 basis points year-over-year to 22.7%.

    • Fuel represented a 40 basis point negative impact on adjusted EBITDA margin due to higher fee revenue offsetting higher fuel expense.

    • Resource Solutions was a 70 basis point headwind to adjusted EBITDA margin due to strong prior-year comparable and lower national accounts margins.

    • GAAP net income guidance was lowered to a range of $0 million to $6 million, reflecting higher forecasted amortization expense and income tax provision.

    Guidance & targets

    11
    CategoryTargetConfidence
    Revenue
    $2.09 billion to $2.11 billion
    high materiality
    High
    Adjusted EBITDA
    $473 million to $483 million
    high materiality
    High
    Adjusted Free Cash Flow
    $200 million to $210 million
    high materiality
    High
    Net Cash Provided by Operating Activities
    $370 million to $380 million
    medium materiality
    High
    GAAP Net Income
    $0 million to $6 million
    medium materiality
    Medium
    Mid-Atlantic Operating Cost Savings
    $5 million
    medium materiality
    High
    Mid-Atlantic Operating Cost Savings
    $10 million
    medium materiality
    High
    G&A Targeted Savings
    $15 million
    medium materiality
    High
    Third-Party Landfill Pricing
    4% to 5%
    medium materiality
    Medium
    Solid Waste Price Growth
    5%
    medium materiality
    Medium
    Fuel Impact on Full-Year EBITDA Margin
    30 basis point headwind
    medium materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Solid Waste
    Revenue growth driven by strong pricing and acquisitions, despite a slight volume decline.
    Price: 5.5%Volume: -0.6%
    		—18.4%——
    Solid Waste - Collection
    Strong pricing in collection, particularly in roll-off and frontload commercial, with a slight volume decrease as the company prioritizes price and profitability.
    Price: 5.8%Roll-off Price: 7%Frontload Commercial Price: 7%Volume: -1.4%
    		————
    Solid Waste - Disposal
    Significant increase in landfill volumes, driven by both internalized and third-party waste, supported by strong pricing.
    Price: 4.7%Third-party Landfill Price: 4%Transfer Station Price: 5.1%Landfill Volumes: 8.4% (86,000 tons)Internalized Landfill Volume: 24,000 tonsThird-party Landfill Volume: 62,000 tons
    		————
    Resource Solutions
    Revenue growth in Resource Solutions, with strong performance in national accounts.
    Recycling and Other Processing Revenue Growth: 5.5%National Accounts Revenue Growth: 17.1%National Accounts Price Growth: 4.3%National Accounts Volume Growth: 6.4%
    		—10.7%——
    Mid-Atlantic
    Margins were relatively flat year-over-year in Q2, but expected to improve in Q3/Q4 and next year as integration and route consolidations yield benefits. Pricing was strong at over 4%.
    Pricing: >4%
    		———relatively flat YoY

    Operational metrics

    21
    Revenue
    $543.7 millionup 16.9% YoY
    Q2 FY26

    Total revenue for the quarter, with breakdown of growth drivers.

    Adjusted EBITDA
    $123.2 millionup 12.5% YoY
    Q2 FY26

    Adjusted EBITDA for the quarter, including contributions from acquisitions and organic growth.

    Adjusted EBITDA Margin
    22.7%down 80 bps YoY
    Q2 FY26

    Adjusted EBITDA margin for the quarter, with key drivers of the year-over-year change.

    Cost of Operations
    $364.9 millionup $56.9 million YoY
    Q2 FY26

    Cost of operations for the quarter, including increases from acquisitions and base business (including fuel costs).

    General and Administrative Costs
    $63.2 millionup $8.6 million YoY
    Q2 FY26

    G&A costs for the quarter, showing an increase in absolute dollars but a decrease as a percentage of revenue.

    Adjusted Net Income
    $25.3 millionup $1.1 million
    Q2 FY26

    Adjusted net income for the quarter.

    Adjusted Diluted EPS
    $0.40up $0.02 per share
    Q2 FY26

    Adjusted diluted earnings per share for the quarter.

    Net Cash Provided by Operating Activities
    $161 millionup $21.4 million YoY
    First 6 months FY26

    Net cash from operating activities for the first six months, driven by EBITDA growth.

    Capital Expenditures
    $122.3 millionrelatively flat YoY
    First 6 months FY26

    Capital expenditures for the first six months, with a higher mix of recurring spend reflected in adjusted free cash flow.

    Total Debt
    $1.35 billion
    as of June 30, 2026

    Total debt balance at quarter-end.

    Cash Balance
    $25 million
    as of June 30, 2026

    Cash balance at quarter-end.

    Consolidated Net Leverage Ratio
    2.7x
    as of June 30, 2026

    Net leverage ratio for bank covenant purposes.

    Available Liquidity
    $500 million
    as of June 30, 2026

    Available liquidity, enabling opportunistic execution of growth strategy and acquisition pipeline.

    Fuel Recovery Fees Revenue
    $11.6 million
    Q2 FY26

    Additional revenue generated from higher cost recovery fees, including those tied to fuel prices.

    Fuel Cost Offset
    fully offset
    Q2 FY26

    The dollar increase in fuel costs was fully offset by higher related fees.

    OSHA Metric Improvement
    34%YoY
    Q2 FY26

    Improvement in key OSHA safety metric.

    Mid-Atlantic Routes Eliminated
    13
    Q2 FY26

    Routes eliminated as part of operational synergies from Mid-Atlantic integration.

    Acquisitions Completed
    5
    YTD 2026

    Number of acquisitions completed year-to-date, representing significant annualized revenues.

    Hakes Landfill Airspace
    20 years
    future

    Expected remaining valuable airspace at Hakes landfill after permit expansion.

    Construction Demo Landfill Tons
    up close to 17%
    Q2 FY26

    Increase in construction and demolition tons, mainly flowing into Hakes and other sites.

    Federal Cash Taxes
    not expected for several years
    future

    Company does not currently pay federal cash taxes and expects this to continue due to tax structuring of acquisitions and new tax law benefits.

    Industry KPIs

    5
    MetricValueDetails
    Volume-0.6%%
    Core price5.5%%
    EBITDA margin22.7%%
    Safety turnover34%%
    Price to cost spreadpositive

    Product announcements

    3
    ProductTypeDetails
    New Customer Payment Portallaunch
    Casella Phone Applaunch
    casella.com Websitelaunch

    Deals & partnerships

    1
    Multiple undisclosed entitiesBuilding density and adding key transfer stations and recycling facilities within existing operating footprint.approximately $165 million annualized revenues

    Completed 5 acquisitions so far in 2026, with one in early January, three on April 1, and one tuck-in in Pennsylvania on July 1.

    Capital programs

    3
    Hakes Landfill Airspace Expansionunderway

    Benefit: approximately 20 years of valuable airspace

    Expected to receive a permit in Q3 FY26 to expand airspace at the Hakes construction and demolition landfill in New York.

    Highland Juniper Range and Clinton Landfills Expansionunderway

    Continued progress on expansion efforts at these landfills.

    McKean Landfill Transfer Station and Railcarsunderway

    Benefit: capabilities to offload open gondolas; Casella railcars delivered

    New transfer station came online at McKean, and first Casella railcars were delivered, enabling intercompany waste movement.

    Risks & headwinds

    5
    Fuel Recovery Program Margin HeadwindQ2 FY26 and Full-year FY26

    40 basis points negative impact on Adjusted EBITDA margin in Q2 FY26; 30 basis points full-year headwind over 2025

    Mitigation: Fuel recovery program designed to recover dollar increase in fuel costs, but does not recover margin.

    Resource Solutions Margin HeadwindQ2 FY26

    70 basis points negative impact on Adjusted EBITDA margin in Q2 FY26

    Mitigation: Due to strong comparable in Q2 2025 (higher recycling volumes from competitor facility retrofit), closure of organic facility in Maine, and lower margins in national accounts.

    Acquisition Dilution on MarginsFull-year FY26

    modest dilutive impact of 40-50 basis points on full-year EBITDA margin

    Mitigation: Expected to be offset by margin improvement in the rest of the business, with a focus on faster synergy realization from acquisitions.

    Higher Forecasted Amortization and Income Tax ProvisionFull-year FY26

    Lowered GAAP net income guidance to $0 million to $6 million

    Mitigation: Company does not expect to be a federal cash taxpayer for several years due to tax structuring and new tax law benefits.

    Inflationary Pressures in TransportationOngoing

    not outsized compared to other industry inflation

    Mitigation: Fuel surcharge formulas in third-party contracts and company's own fuel recovery program aim to offset costs; focus on pricing to recover inflation.

    What to watch in Q3 FY26

    5

    Mid-Atlantic Margin Cadence

    Q3 FY26
    Currentrelatively flat YoY in Q2
    Targetpositive direction in Q3, Q4, and especially next year

    Why it matters

    Indicates the success of integration efforts and operational synergies in a key growth market.

    We really do expect though, for the margins to start to move in the positive direction in Q3, Q4 and then especially into next year.

    Q&A highlights

    8

    Clarify if the 30 basis points underlying margin improvement (excluding fuel and Resource Solutions) includes M&A dilution, and if the base business achieved the target 50 basis points.

    The 30 basis points improvement does include M&A dilution. The base business, excluding these factors and M&A, performed well in excess of 50 basis points of margin expansion.

    “Yes, it does include acquisitions netted within that. So if you pull that out, I mean, acquisitions were a bit of a dilutive impact as well. The base business performed well in excess of 50 basis points of margin expansion.”

    asked by Adam Bubes · answered by Bradford Helgeson

    2 min read6 chapters

    Detailed Narrative

    01

    Mid-Atlantic Integration and Synergies

    The company made significant progress on Mid-Atlantic integration efforts, completing customer migration to a new lead-to-cash system and payment portal in early May. This enabled operational synergies, including the elimination of 13 routes and associated trucks and labor. The company is on track to cut $5 million in operating costs in 2026 and an additional $10 million over the next two years, with benefits expected to start impacting margins in the second half of 2026.

    02

    Technology and Customer Experience Investments

    Casella launched a new customer payment portal in April, a new phone app in May, and a new casella.com website in July, focusing on improving customer experience and developing robust e-commerce capabilities. These initiatives are also expected to yield cost efficiencies and enhance selling capabilities. The company is also deploying in-cab AI technology (Lytics) across its fleet to drive safer behavior and expanding its Triage program to reduce workers' compensation costs.

    03

    Landfill Capacity Expansion

    The company expects to receive a permit in Q3 FY26 to expand airspace at its Hakes construction and demolition landfill in New York, which will provide approximately 20 years of valuable airspace. Additionally, progress is being made on expansion efforts at the Highland Juniper Range and Clinton landfills, securing long-term disposal capacity in the Northeast market.

    04

    Acquisition Strategy and Pipeline

    Casella completed five acquisitions in 2026 year-to-date, representing approximately $165 million in annualized revenues. These transactions align with the strategy of building density and adding key transfer stations and recycling facilities. The acquisition pipeline remains strong, with a focus on smaller tuck-in opportunities that can be integrated quickly, leveraging new systems for faster synergy realization.

    05

    New Leadership Appointments

    The company welcomed Damian Rebar as the new Executive Vice President and Chief Operating Officer, bringing over 30 years of industry operating and finance experience. Henry Bobby also joined as Vice President of Investor Relations and Finance, following a 20-year career in the buy side. These hires are part of a broader strategy to scale the organization and bring in leaders with experience in larger enterprises.

    06

    McKean Landfill Development

    Progress at the McKean landfill includes the new transfer station coming online, allowing for offloading of open gondolas with various waste types. Casella's first railcars were delivered, and intercompany waste movement from Massachusetts to McKean began in July. This long-term positioning aims to leverage the site for specialty waste streams like biosolids and sludges, addressing evolving disposal needs.

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