Casella Waste Systems' Q2 Earnings Miss Expectations, Share Price Down 5.29%

Casella Waste Systems' Q2 revenue reached $465mln, a 23% YoY increase, but GAAP net income fell to $5.2mln from $7mln YoY, missing analysts' expectations of $0.33 per share. The company completed six acquisitions and saw higher landfill volumes, but its revised full-year 2025 guidance cut GAAP net income to $8mln-$18mln from $10mln-$25mln.

Casella Waste Systems (CWST) reported its Q2 2025 earnings, with revenue reaching $465.3 million, a 23.4% year-over-year (YoY) increase. The company's adjusted EBITDA was $109.5 million, up 19.5% YoY, while GAAP net income fell to $5.2 million from $7 million in the same period last year, missing analysts' expectations of $0.33 per share [2].

The strong revenue growth was driven by acquisitions and organic growth, with $67.1 million from acquisitions and $21 million from organic growth contributing to the quarter's total revenue. The company completed six acquisitions in the first half of 2025, including the pending acquisition of Mountain State Waste, which will add $30 million in annualized revenues [1].

Landfill volumes were up 9.5% YoY, driven by higher third-party municipal solid waste (MSW) and construction and demolition (C&D) volumes. Resource Solutions revenues were up 10% YoY to about $95.8 million, with recycling and other processing revenue up 9.6% [1].

Despite the strong financial performance, Casella revised its full-year 2025 guidance for GAAP net income to a range of $8 million to $18 million, down from a previous range of $10 million to $25 million. This revision was attributed to slower-than-expected synergy realization in the Mid-Atlantic region due to truck delivery delays and legacy system challenges [2].

The company expects about 55 more trucks to be delivered to the Mid-Atlantic region later in the year, 40 of which are automated, to help offset labor cost pressures and improve operational efficiency in the region. Casella also completed 11 route optimization projects in the Eastern and Western regions that helped offset hurdles in the Mid-Atlantic [1].

Casella's solid waste pricing for the quarter was up 5% YoY, with 4.9% collection price growth and 5.8% disposal price growth. The company's adjusted free cash flow hit a record for the first half, at $70.8 million, with capital expenditures of $121.9 million, including $40 million in upfront investment in recent acquisitions [2].

Management reaffirmed its adjusted EBITDA and adjusted free cash flow guidance ranges, signaling caution due to the integration challenges in the Mid-Atlantic region. The company expects the integration challenges to represent a margin expansion opportunity in the future, with expectations of realizing this opportunity in 2026 [2].

References:
[1] https://www.wastedive.com/news/casella-q2-2025-earnings-mid-atlantic-acquisitions-guidance/756616/
[2] https://seekingalpha.com/news/4476757-casella-raises-2025-revenue-guidance-to-1_83b-midpoint-while-integrating-new-acquisitions