Casella Waste Systems, Inc.

Second-quarter revenue was $543.7 million, up $78.4 million or 16.9% year over year. Adjusted EBITDA was $123.2 million, up $13.7 million or 12.5%, and adjusted net income was $25.3 million, or $0.40 per diluted share, up $1.1 million and $0.02 per share. Adjusted EBITDA margin was 22.7%, down 80 bps year over year, with about a 40 bp fuel headwind and a 70 bp Resource Solutions headwind; excluding fuel and Resource Solutions, the business expanded margins by 30 bps. For the first six months, operating cash flow was $161 million, adjusted free cash flow was $78.1 million, capital expenditures were $122.3 million, debt was $1.35 billion, cash was $25 million, and net leverage was 2.7x. Management raised full-year revenue guidance to $2.09 billion-$2.11 billion from acquisition activity and higher expected fuel recovery fees, reaffirmed adjusted EBITDA guidance of $473 million-$483 million, reaffirmed adjusted free cash flow of $200 million-$210 million, and reaffirmed operating cash flow guidance of $370 million-$380 million. GAAP net income guidance was lowered to $0 million-$6 million.

Ned Coletta said Casella executed well across the business, with strong pricing, landfill volume growth, and acquisitions all contributing. He emphasized that the company is shifting from a regional operator to a scalable enterprise, and that the priority now is to unlock more synergy and operating leverage from technology, process discipline, and acquisitions. He sounded constructive on the back half of the year, pointing to strong landfill positioning in the Northeast, a re-built sales organization, and continued expansion of the company’s platform.

Brad Helgeson focused on the math behind the quarter and the guide. He said same-store growth was 6.9%, solid waste price was up 5.5%, landfill volumes rose 8.4%, and Resource Solutions revenue increased 10.7%; he also noted $11.6 million of incremental revenue from higher cost recovery fees, including fuel-related fees. On margins, he said adjusted EBITDA margin was 22.7%, down 80 bps because of fuel and Resource Solutions, while excluding those items the base business expanded margins by 30 bps. He also cited $161 million of operating cash flow in the first half, $78.1 million of adjusted free cash flow, $1.35 billion of debt, $25 million of cash, and about $500 million of liquidity, and said the revenue raise was mostly fuel-driven with a smaller contribution from the July 1 acquisition.

Analysts pressed management on whether the stock market was rewarding growth enough to justify continued M&A, and Ned said Casella does not plan to “tap the brakes” but does need to extract synergy value and scale faster from acquisitions. They also asked about Mid-Atlantic integration and margins; management said systems integration is complete, route consolidations are underway, and margin benefits should start in Q3/Q4 and become more visible next year. On landfill volumes, management pointed to tightening Northeast capacity, the closure/announced closure of key facilities, and a stronger landfill sales team as drivers. Questions on revenue and margin guidance led to management saying the guidance raise was mostly fuel-related, with fuel still expected to be a headwind for the rest of the year.