By the numbers
Q2 net income: $10M
Up 73% YoY. Casella paid a non-recurring charge in Q3 2024 to close the Southbridge landfill.
Q2 adjusted EBITDA: $119.9M
Up 16.4% YoY
- Financial picture: During a Q3 earnings call on Friday, Casella Waste Systems CEO John Casella pointed out strong solid waste pricing and landfill volumes and the company’s work to improve issues with its optimization of mid-Atlantic assets. The company raised the lower end of some guidance ranges for the rest of the year and is on track to achieve its previously stated free cash flow guidance. It was Casella’s last earnings call as CEO, as President Ned Coletta is poised to take over as CEO next year.
- M&A updates: Casella acquired eight businesses so far this year with about $105 million in annualized revenue. The company expects another $30 million when it closes on the Mountain State Waste deal sometime in early 2026. Casella is also working on four smaller tuck-in deals worth about $30 million of annualized revenues, which could close in late Q4 or in 2026, Coletta said. Casella maintains a pipeline of deals representing about $500 million.
- Price: Solid waste pricing for the quarter was up 4.6% year over year, with 4.7% collection price growth and 4.6% disposal price growth. Solid waste revenues were up 20.3% year over year.
- Volume: Landfill volumes were up 11.7% year over year, with about a quarter of the increase driven by “better sales performance” and the rest from increased volume internalization, Coletta said. Solid waste volume was flat for the quarter, but overall, “volume trends continue to improve as we move through the year, with indications of a relatively stable economy in our markets,” said CFO Brad Helgeson.
- Resource Solutions: Resource Solutions revenues were up 7.8% year over year, but recycling and other processing revenue was down 5% because of lower commodity prices, Helgeson said. Average recycled commodity revenue per ton was down 29% year over year, but Casella’s contract structure shares risk with customers by adjusting tip fees in down markets, making that impact “only about a million dollars in processing,” he said. Processing volume in revenue terms was up 2.5%, driven by higher volumes at the Willimantic, Connecticut recycling facility.
- Mid-Atlantic optimization improvements: Executives highlighted ongoing efforts to improve integration of their mid-Atlantic assets aquired from GFL Environmental, which were experiencing high labor costs and needed more work to modernize trucks, consolidate routes and get customers onto the same payment system, Coletta said. Those improvements, including delivery of new automated trucks, are expected to save about $5 million in 2026, “but the ultimate multi-year opportunity is much larger, and we're currently working to establish the cadence of these savings,” Coletta said.**
- Landfill permitting: Casella has made “solid progress” on the expansion efforts at its Hakes and Hyland landfills in New York and expects to receive permits “over the next several quarters,” Coletta said. Casella wants to more than double its capacity at Hyland from 460,000 tons a year to a million tons per year, and also add nearly 60 years of capacity at the Hakes C&D landfill. John Casella said he feels “very confident” these plans will move forward, noting shrinking disposal capacity in the region and the company’s work to coordinate with the surrounding communities.
- RNG projects: Casella has three new renewable natural gas facilities coming online in the next few months, including one at the North Country landfill in New Hampshire and two coming online in New York that will be operated by Waga Energy, Coletta said. Casella does not build or operate the facilities itself, but rather sells the gas to RNG developers, a move Coletta said is ideal to avoid volatility. “We haven't modeled much [impact] for 2026, but they could become more material,” he said. “There's a lot of really high quality methane coming off those landfills.”
- Revised outlook: Casella has increased the lower end of its guidance ranges for 2025 revenue and adjusted EBITDA, noting “confidence in strong results through the remainder of the year and our limited exposure to recycled commodity price volatility given our successful floating fees structure,” John Casella said. Revenue outlook is now between $1.83 billion and $1.84 billion. Adjusted EBITDA outlook is now between $415 million and $425 million. The company affirmed its guidance ranges for net income, net cash provided by operating activities and adjusted free cash flow.
