Casella Waste 2025 Q2 Earnings Mixed Results with Net Income Down 25.7%

Casella Waste Systems (CWST) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. The company posted a revenue of $465.33 million for the quarter, surpassing analyst expectations of $454.4 million. Adjusted EPS also beat estimates, coming in at $0.36 compared to the projected $0.33. However, EBITDA slightly missed market projections, with a reported $109.5 million against the forecasted $111.9 million. Casella adjusted its full-year revenue guidance upward, reflecting confidence in recent acquisitions, but lowered EBITDA expectations, indicating a mixed outlook.

Revenue

Casella Waste's total revenue for 2025 Q2 increased by 23.4%, reaching $465.33 million from the previous year's $377.16 million. The solid waste segment led the growth, contributing $373.62 million, while the collection services added $297.90 million. Disposal activities brought in $71.58 million. The landfill gas-to-energy segment generated $1.56 million, whereas processing revenue was reported twice, with figures of $2.58 million and $36.47 million. Resource Solutions accounted for $91.71 million, and National Accounts contributed $55.24 million.

Earnings/Net Income

Casella Waste's EPS declined by 33.3%, falling to $0.08 in 2025 Q2 from $0.12 in 2024 Q2. Similarly, the net income decreased by 25.7%, reaching $5.21 million compared to $7.01 million in the previous year. The reduction in EPS indicates a weaker profitability despite revenue growth.

Price Action

The stock price of Casella Waste has shown modest movement over recent periods, increasing by 1.45% on the latest trading day. However, it saw a slight decline of 0.06% over the past week and a more noticeable drop of 5.76% month-to-date.

Post-Earnings Price Action Review

Over the past three years, a strategy involving purchasing Casella Waste shares following a quarter-over-quarter revenue increase and holding them for 30 days has yielded robust returns. This approach achieved a 95.06% return, surpassing the benchmark return of 85.57% by 9.49%. The strategy demonstrated a compound annual growth rate (CAGR) of 14.41% and maintained a maximum drawdown of 0.00%, showcasing strong performance in terms of both returns and risk management. Investors have benefited from consistently strong gains, reinforcing the effectiveness of this strategy in capitalizing on Casella Waste's revenue growth.

CEO Commentary

"Casella Waste Systems, Inc. (NASDAQ: CWST) is focused on maintaining our growth trajectory amid market challenges," stated the CEO. "We plan to strengthen our market positioning through strategic investments in solid waste and recycling operations. Our leadership is optimistic about the future, as we continue to enhance operational efficiencies and customer service, driving revenue growth and ensuring sustainable practices across all levels of our organization."

Guidance

Casella Waste anticipates a successful remarketing of the $29.0 million Remarketed Bonds at an interest rate of 5.000% per annum, effective August 1, 2025. The company expects to redeem $1.0 million of the Bonds with cash on hand, reinforcing its commitment to financial stability. Casella emphasizes that the proceeds will support ongoing operations and growth initiatives, aligning with the company's strategic objectives for the upcoming years.

Additional News

Casella Waste Systems has been actively engaged in mergers and acquisitions, with six businesses acquired in the first half of 2025, contributing approximately $90 million in annualized revenue. The company is also nearing completion of its acquisition of Mountain State Waste, which is expected to add an additional $30 million in annual revenue and expand Casella's footprint into Pennsylvania and West Virginia. This strategic move aims to strengthen Casella's position in secondary and tertiary markets in the Eastern U.S., reinforcing its growth strategy through significant M&A opportunities. No C-level changes or dividend/buyback announcements have been reported within the last three weeks.