second quarter 2026
Filed Aug 6, 2026Casella Waste Systems reported 16.9% revenue growth and 12.5% Adjusted EBITDA growth in the second quarter, while lowering fiscal year 2026 net income guidance.
Revenue, pricing, landfill volumes, acquisitions, Adjusted EBITDA and year-to-date cash flow advanced, although GAAP net income declined and fiscal year net income guidance was lowered.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenuesGAAP | $543.7 million | – | up $78.4 million, or up 16.9% |
| Operating incomeGAAP | $20.0 million | – | up $0.7 million, or up 3.6% |
| Net incomeGAAP | $3.8 million | – | down $(1.4) million, or down (27.6)% |
| Adjusted Net Incomenon-GAAP | $25.3 million | – | up $1.1 million, or up 4.6% |
| Adjusted EBITDAnon-GAAP | $123.2 million | – | up $13.7 million, or up 12.5% |
| Net cash provided by operating activities for the six months ended June 30, 2026GAAP | $161.0 million | – | up $21.4 million, or up 15.3% |
| Adjusted Free Cash Flow for the six months ended June 30, 2026non-GAAP | $78.1 million | – | up $7.3 million, or up 10.3% |
| Solid waste pricing year-over-year changeother | 5.5% | – | – |
| Collection price growthother | 5.8% | – | – |
| Disposal price growthother | 4.7% | – | – |
| Municipal solid waste and construction & demolition pricing growth at the landfillsother | 4.5% | – | – |
| Adjusted EBITDA margin headwind from floating fuel recovery feesnon-GAAP | 40 basis points | – | – |
| Businesses acquired thus far in 2026other | five businesses | – | – |
| Aggregate annualized revenues of businesses acquired thus far in 2026other | approximately $165 million | – | – |
fiscal year 2026 outlook
- Revenuebetween $2.090 billion and $2.110 billion
- NoteNet income between $0 and $6 million
- NoteAdjusted EBITDA between $473 million and $483 million
- NoteNet cash provided by operating activities between $370 million and $380 million
- NoteAdjusted Free Cash Flow between $200 million and $210 million
- NoteThe guidance ranges do not include the impact of any acquisitions that have not been completed.
What drove it
- Revenue growth was mainly driven by the positive impact from acquisitions, including the rollover contribution from deals closed in prior periods; positive collection and disposal price; an increase in landfill volumes; and strong National Accounts growth in the Resource Solutions operating segment.
- Adjusted EBITDA growth was driven by both acquisition contribution and organic growth.
- Landfill volume growth was related to both third party-sales and internalization efforts.
- The Company completed systems integration work and initiated route optimization initiatives in its Mid-Atlantic region.
Concerns
- Net income declined to $3.8 million from $5.2 million, largely reflecting the factors impacting operating income and higher interest expense, net.
- Higher depreciation and amortization expense was mainly related to acquisition growth.
- Rapidly increased and elevated fuel prices created a headwind to Adjusted EBITDA margins of 40 basis points, despite floating fuel recovery fees offsetting the higher cost.
- Fiscal year 2026 net income guidance was lowered from a range of $4 million to $10 million to between $0 and $6 million.
What to watch
- Execution of route optimization initiatives and further operating-plan progress in the Mid-Atlantic region during the second half of the year.
- Landfill volumes, collection and disposal pricing, and National Accounts growth in the Resource Solutions operating segment.
- The contribution and integration of five businesses acquired thus far in 2026 with approximately $165 million in aggregate annualized revenues.
- Fuel costs and the associated effect of floating fuel recovery fees on Adjusted EBITDA margins.
- Delivery against fiscal year 2026 Adjusted EBITDA guidance of between $473 million and $483 million and Adjusted Free Cash Flow guidance of between $200 million and $210 million.
Balance sheet and cash flow
- Net cash provided by operating activities was $161.0 million for the six months ended June 30, 2026, up $21.4 million from the same period in 2025.
- Adjusted Free Cash Flow was $78.1 million for the six months ended June 30, 2026, up $7.3 million from the same period in 2025.
Analysis
Casella reported revenues of $543.7 million for the quarter, up $78.4 million, or up 16.9%, from the same period in 2025. Management attributed growth to acquisitions and rollover contribution from prior deals, collection and disposal price, higher landfill volumes, and strong National Accounts growth in Resource Solutions. Solid waste pricing was up 5.5%, supported by 5.8% collection price growth and 4.7% disposal price growth. Municipal solid waste and construction & demolition pricing growth at the landfills was 4.5%.
Operating income was $20.0 million, up $0.7 million, or up 3.6%, with improved operating performance partly offset by higher depreciation and amortization expense mainly related to acquisition growth. Adjusted EBITDA was $123.2 million, up $13.7 million, or up 12.5%, driven by acquisition contribution and organic growth. Elevated fuel costs were offset by floating fuel recovery fees, but these fees produced a 40 basis point headwind to Adjusted EBITDA margins.
GAAP net income declined to $3.8 million from $5.2 million, down $(1.4) million, or down (27.6)%, as higher interest expense, net added to the factors affecting operating income. In contrast, Adjusted Net Income was $25.3 million, up $1.1 million, or up 4.6%. The divergence between GAAP net income and adjusted earnings is a central item for investors, alongside acquisition-related depreciation and amortization and higher interest expense.
Cash generation increased through the first half. Net cash provided by operating activities was $161.0 million for the six months ended June 30, 2026, up $21.4 million, or up 15.3%, from the same period in 2025. Adjusted Free Cash Flow was $78.1 million, up $7.3 million, or up 10.3%. The company acquired five businesses thus far in 2026 with approximately $165 million in aggregate annualized revenues, making integration and the realization of acquisition contribution important operating priorities.
For fiscal year 2026, Casella increased revenue guidance to between $2.090 billion and $2.110 billion from a range of $2.060 billion to $2.080 billion, citing acquisition activity and higher floating fuel recovery fees. It lowered net income guidance to between $0 and $6 million from a range of $4 million to $10 million. The company reaffirmed Adjusted EBITDA guidance of between $473 million and $483 million, operating cash flow guidance of between $370 million and $380 million, and Adjusted Free Cash Flow guidance of between $200 million and $210 million.
Management, verbatim
We delivered another quarter of solid financial and operating performance as our teams continued to execute at a high level across the business.
Ned Coletta, President and CEO of Casella Waste Systems, Inc.
Our disciplined operating approach, strong pricing execution, healthy landfill volumes, and continued acquisition activity drove positive results during the quarter.
Ned Coletta, President and CEO of Casella Waste Systems, Inc.
We are increasing our revenue guidance reflecting our acquisition activity and expectation of higher floating fuel recovery fees associated with offsetting elevated fuel costs.
Ned Coletta, President and CEO of Casella Waste Systems, Inc.
Not in the filing
stated, not guessed- GAAP gross profit and gross margin
- GAAP and non-GAAP earnings per share
- Adjusted EBITDA margin
- Prior-year revenue, operating income, Adjusted Net Income, Adjusted EBITDA, operating cash flow, and Adjusted Free Cash Flow values
- Prior-quarter comparisons for reported metrics
- Segment revenue and segment profitability
- Capital expenditures
- Cash balance
- Debt balance
- Share repurchases
- Dividends
- Fiscal year 2026 gross margin guidance
- Fiscal year 2026 operating expense guidance
- Fiscal year 2026 tax rate guidance
- Previous outlook section for formal actual-versus-prior-guidance comparison
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.