Casella Waste Systems Reports Record Earnings and Positive Outlook

Casella Waste Systems ((CWST)) has held its Q3 earnings call. Read on for the main highlights of the call.

Casella Waste Systems’ recent earnings call painted a picture of robust performance and optimism for the future. The company reported record-breaking revenue and EBITDA figures, alongside successful acquisitions and positive growth projections. Despite facing challenges such as commodity price headwinds and integration issues in the Mid-Atlantic segment, the overall sentiment was optimistic, highlighting significant achievements and a promising outlook for 2026.

Record Revenue and EBITDA

Casella Waste Systems reported record quarterly revenue and adjusted EBITDA figures of approximately $485 million and $120 million, respectively. This impressive year-over-year growth was driven by strong waste pricing and increased landfill volumes, showcasing the company’s solid operational performance.

Strong Free Cash Flow Growth

The company achieved a year-to-date adjusted free cash flow of $119 million, marking a 21% increase compared to the previous year. This growth was supported by the rise in EBITDA and improved working capital performance, underscoring Casella’s financial strength.

Successful Integration and Acquisition Strategy

Casella completed eight acquisitions year-to-date, adding $105 million in annualized revenue. The company expects to finalize the Mountain State Waste transaction by year-end, which will contribute an additional $30 million, highlighting its effective acquisition strategy.

Strategic Pricing and Operational Efficiency

Solid waste operations delivered strong results, with pricing and landfill volumes driving margin expansion. The Mid-Atlantic integration is progressing well, with anticipated improvements in operational efficiency, reflecting the company’s strategic focus.

Sustainability Leadership Awards

Casella Waste Systems was recognized for its sustainability efforts, honoring customers who reduced waste, increased recycling, and advanced the circular economy. This recognition underscores Casella’s commitment to environmental responsibility.

Positive Outlook for 2026

The company anticipates strong growth in revenue, adjusted EBITDA, and cash flow for 2026, with planned margin improvements and acquisition rollovers. This positive outlook reflects Casella’s strategic planning and growth potential.

Commodity Price Headwinds

The Resource Solutions segment faced challenges due to lower commodity prices, resulting in a 5% decline in recycling and processing revenue. The average recycled commodity revenue per ton was down 29% year-over-year, indicating ongoing market pressures.

G&A Cost Increase

General and administrative costs increased by $10.2 million year-over-year, reflecting a 40 basis point rise as a percentage of revenue. This was attributed to technology upgrades and integration investments, highlighting the company’s focus on modernization.

Mid-Atlantic Segment Challenges

The Mid-Atlantic integration posed a year-over-year margin headwind of about 10 basis points, illustrating the ongoing challenges in fully integrating these operations. Casella remains focused on overcoming these obstacles to enhance performance.

Forward-Looking Guidance

Looking ahead, Casella Waste Systems expects organic growth of 4% to 5% in 2026 and anticipates total revenue growth of 7% to 8%. The company targets an EBITDA margin improvement of 25 to 50 basis points, driven by operational enhancements and acquisition rollovers, indicating a strong growth trajectory.

In conclusion, Casella Waste Systems’ earnings call highlighted a period of significant achievement and a positive outlook for the future. With record revenue and EBITDA, successful acquisitions, and strategic initiatives in place, the company is well-positioned for continued growth despite facing some challenges. Investors and stakeholders can remain optimistic about Casella’s potential in the coming years.