GFL Environmental's Q2 2025 Earnings Call: Unpacking Contradictions on Growth, Margins, and M&A Strategy

Volume growth drivers and EPR impact, margin expansion expectations, GIP business monetization, M&A pipeline focus, and M&A strategy and execution are the key contradictions discussed in GFL Environmental's latest 2025Q2 earnings call.



Strong Financial Performance:
- GFL Environmental Inc. reported solid waste adjusted EBITDA margins of 34.7% in Q2 2025, the highest in the company's history.
- Despite external headwinds, such as FX rates and commodity prices moving against guidance, the company delivered trailing 12-month adjusted EBITDA margins of 27.8%.
- This performance was driven by effective revenue-related strategies, disciplined pricing, and operational efficiencies.

Volume and Pricing Growth:
- Volume was positive for the third consecutive quarter, accelerating 150 basis points over the first quarter.
- Pricing was 5.8%, exceeding expectations and leading to an increased pricing guidance of over 5.5% for the year.
- Growth in volumes was attributed to strategic investments in EPR, while pricing was driven by the intentional shedding of lower-quality revenue and disciplined pricing strategy.

M&A Activity and Outlook:
- The company completed 3 small tuck-in acquisitions in Q2, with plans to close 3 more acquisitions in the following days.
- GFL anticipates closing 3 more acquisitions by the end of the year, with a pipeline that remains robust.
- This activity sets up a larger rollover amount for 2026, positioning GFL for another year of exceptional growth.

Updated Financial Guidance:
- Guidance for adjusted EBITDA was increased to $1.95 billion to $1.975 billion, a $25 million increase over the prior guidance.
- Revenue guidance is now expected to be approximately $6.55 billion to $6.75 billion, reflecting an organic revenue growth of 1.7% compared to original guidance.
- The increased guidance is supported by positive pricing and volume trends, despite external uncertainties.