Casella Waste Systems (NASDAQ:CWST) reported second-quarter revenue growth of 16.9% as acquisitions, pricing gains and higher landfill volumes supported results, while the company raised its full-year revenue outlook and reaffirmed its adjusted EBITDA and cash-flow guidance.
Revenue for the quarter totaled $543.7 million, an increase of $78.4 million from a year earlier. Acquisitions, including rollover activity, contributed $46.2 million of the increase, while same-store growth accounted for $32.2 million, or 6.9%, Chief Financial Officer Brad Helgeson said during the company’s earnings call.
Pricing and Landfill Volumes Drive Growth
President and Chief Executive Officer Ned Coletta said results reflected “strong pricing execution, higher landfill volumes, and continued acquisition activity.” Overall solid-waste pricing increased 5.5%, including a 5.8% gain in collection and a 4.7% increase in disposal.
Collection pricing was led by 7% increases in both roll-off and front-load commercial service, though collection volumes declined 1.4% as the company continued to prioritize pricing and profitability. Solid-waste volumes overall declined 0.6%.
Landfill activity was a major offset. Landfill volumes rose 86,000 tons, or 8.4%, from the prior-year quarter. Internalized volume increased by 24,000 tons and third-party volume rose by 62,000 tons. Coletta attributed the growth to the company’s reconstituted post-collection sales team, internalization efforts and landfill positioning in the Northeast.
Management also pointed to tightening regional disposal capacity. Coletta said the Hudson Falls incinerator in New York is scheduled to close at the end of 2026, while Albany has announced plans to close its landfill and develop a transfer station. Construction-and-demolition volumes rose nearly 17% during the quarter, with strength also reported in municipal solid waste and special-waste streams.
Casella expects third-party landfill pricing to improve 4% to 5% in 2026, consistent with its expectation for 5% overall solid-waste pricing growth. Coletta said the company is targeting landfill pricing growth of 5% or more while balancing pricing with the need for soil at certain sites.
Fuel Program Offsets Higher Costs, Pressures Margins
Higher fuel costs added $11.6 million of revenue through cost-recovery fees during the quarter. The company said its floating fuel fees fully offset the dollar increase in fuel costs, although the gross-up of revenue and expenses created an approximately 40-basis-point margin headwind.
For the full year, Helgeson said fuel is expected to represent roughly a 30-basis-point headwind compared with 2025, assuming prices remain at elevated levels. The company’s updated revenue guidance assumes fuel costs remain near current levels for the remainder of the year.
Resource solutions revenue increased 10.7%, including 5.5% growth in recycling and other processing revenue and 17.1% growth in national accounts. However, the segment created a 70-basis-point year-over-year EBITDA margin headwind against a strong prior-year comparison. The comparison reflected higher recycling volumes last year when a competitor was retrofitting a facility, the closure of Casella’s Maine organics facility in the third quarter, and lower national-accounts margins.
Mid-Atlantic Integration and Cost-Savings Plans Advance
Casella said it completed the migration of Mid-Atlantic customers to its lead-to-cash system and payment portal in early May. The company has since shifted focus toward route consolidations and automated truck conversions, eliminating 13 routes along with associated trucks and labor.
The company remains on track to remove $5 million of Mid-Atlantic operating costs in 2026 and an additional $10 million over the following two years. Helgeson said segment margins were relatively flat year over year in the second quarter but are expected to begin improving in the third and fourth quarters and especially in 2027.
Mid-Atlantic pricing increased 4.7% during the quarter, excluding fuel recovery fees. Management said the unified operating platform is providing improved visibility into customer profitability and should support a more targeted pricing approach over time. The potential pricing benefit has not been quantified and is separate from the identified cost-reduction targets.
Casella also said it remains on track to achieve $15 million in general and administrative savings over the next three years. The first phase is expected in the second half of 2026 through credit-card convenience fees, followed by the elimination of redundant systems in 2027 and further back-office automation thereafter.
Acquisitions, Landfill Expansion and Updated Outlook
The company completed five acquisitions so far in 2026, representing approximately $165 million in annualized revenue. Coletta said future activity through early 2027 is expected to focus primarily on smaller tuck-in acquisitions, generally businesses with roughly $10 million to $20 million in revenue or strategically located transfer-station assets.
Casella ended June with $1.35 billion of debt, $25 million of cash and a consolidated net leverage ratio of 2.7 times for bank-covenant purposes. The company said it had approximately $500 million of available liquidity.
The company expects to receive a third-quarter permit to expand airspace at its Hakes construction-and-demolition landfill in New York. At current operating rates, Coletta said the expansion would provide about 20 years of airspace. Casella also cited progress on expansion work at its Hyland, Juniper Ridge and Clinton landfills.
At McKean, Casella’s new transfer station came online during the second quarter, and the company began moving intercompany waste from Massachusetts to the site in July using its own rail cars. Management characterized the operation as a long-term positioning effort rather than an immediate push for higher third-party volumes.
Casella raised 2026 revenue guidance by $30 million to a range of $2.09 billion to $2.11 billion. Helgeson said more than $20 million of the increase reflects higher anticipated fuel recovery fees, while less than $10 million is tied to the acquisition completed July 1.
- Adjusted EBITDA guidance was reaffirmed at $473 million to $483 million.
- Adjusted free cash flow guidance was reaffirmed at $200 million to $210 million.
- Net cash provided by operating activities guidance was reaffirmed at $370 million to $380 million.
- GAAP net income guidance was lowered to $0 million to $6 million, reflecting higher expected amortization expense and income-tax provision.
For the second quarter, adjusted net income was $25.3 million, or $0.40 per diluted share, up $1.1 million, or $0.02 per share, from a year earlier. GAAP net income declined $1.4 million, which the company attributed to higher depreciation and amortization, interest expense and costs associated with the organics facility closure.
About Casella Waste Systems (NASDAQ:CWST)
Casella Waste Systems, Inc is a regional resource management company headquartered in Rutland, Vermont. Established in 1975, the company has grown from a single-truck operation into a multi-state provider of integrated waste management solutions. Casella offers a comprehensive range of services, including residential, commercial and industrial waste collection, transfer station operations, landfill disposal, recycling processing and organics management.
Through a network of solid waste transfer stations, recycling facilities and landfills, Casella serves communities primarily across the northeastern United States and parts of the mid-Atlantic region.
