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Casella Waste Systems (CWST) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 7, 2026

Source: earnings call transcript

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

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

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

CWST operating KPIs by quarter

CWST operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q1 FY26This call Jun 2026 Q2 FY26Change vs prior quarter
Capital expenditures Recent acquisitions
$9.2M Capital expenditures were $50 million, down $5.5 million year-over-year with $9.2 million of upfront investment in recent acquisitions. Source: earnings call transcript
$20.6M Capital expenditures were $122.3 million with $20.6 million of upfront investment in recent acquisitions. Source: earnings call transcript
+123.9%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

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

Deals & partnerships

Multiple undisclosed entities Building 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

Hakes Landfill Airspace Expansion underway

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 Expansion underway

Continued progress on expansion efforts at these landfills.

McKean Landfill Transfer Station and Railcars underway

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

Fuel Recovery Program Margin Headwind Q2 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 Headwind Q2 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 Margins Full-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 Provision Full-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 Transportation Ongoing

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

Mid-Atlantic Margin Cadence

Q3 FY26
Current relatively flat YoY in Q2
Target positive 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.

Find out whether CWST delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.