Republic Services (RSG) Q3 2026 Earnings Call: Guidance Raised as Environmental Solutions Grows
Source Tradingkey
Key Takeaways
- Republic Services reported third-quarter revenue growth of 8.2%, adjusted EBITDA growth of 4.8% and adjusted EPS of $1.94. Year-to-date adjusted free cash flow reached $2.28 billion.
- Core price on related revenue was 6.3%, while average yield was 3.5% and remained above internal cost inflation. Price increases exceeded 8% when higher fuel recovery fees were included.
- Environmental Solutions organic revenue increased 21% and contributed 2.1 percentage points to total company revenue growth. Excluding several large emergency response projects, segment revenue grew approximately 9%.
- Environmental Solutions adjusted EBITDA margin expanded 440 basis points to 25.4%. Total company adjusted EBITDA margin was 31.8%, despite pressure from diesel costs, prior-year landfill event volumes and elevated healthcare expenses.
- Management raised its 2026 outlook to revenue of $17.425 billion to $17.475 billion, adjusted EBITDA of $5.5 billion to $5.575 billion and adjusted free cash flow of $2.565 billion to $2.585 billion.
- Management expects its long-term growth framework to remain intact in 2027, targeting mid-single-digit revenue growth and 30 to 50 basis points of annual adjusted EBITDA margin expansion.
Key Financial Data
| Metric | Q3 2026 result or change | Commentary |
|---|---|---|
| Revenue growth | 8.2% | Supported by pricing, fuel recovery fees and Environmental Solutions |
| Adjusted EBITDA growth | 4.8% | Environmental Solutions was a key contributor |
| Adjusted EPS | $1.94 | As reported by management |
| Adjusted EBITDA margin | 31.8% | Included several temporary cost headwinds |
| Year-to-date adjusted free cash flow | $2.28 billion | Primarily driven by EBITDA growth |
| Core price on related revenue | 6.3% | Included 7.6% open-market and 4.1% restricted pricing |
| Average yield on related revenue | 3.5% | Down 50 basis points sequentially due mainly to unit growth |
| Fuel recovery fee contribution to revenue | 1.8% | Offset higher fuel expense and related surcharges |
| Related-revenue volume | (0.7)% | Positive 0.2% excluding prior-year landfill event volumes |
| Environmental Solutions revenue growth | 21% | Approximately 9% excluding large emergency response jobs |
| Environmental Solutions adjusted EBITDA margin | 25.4% | Expanded 440 basis points year over year |
| Total debt | Approximately $14.2 billion | Quarter-end leverage was approximately 2.6x |
| Total liquidity | $2.3 billion | At quarter-end |
Business and Operating Performance
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