Casella Waste Systems, Inc.

What they do

Casella provides solid waste collection and disposal, transfer, recycling and organics services to residential, commercial, municipal, institutional and industrial customers. It operates through three geographic solid waste segments — Eastern, Western and Mid-Atlantic — plus a Resource Solutions segment covering materials processing, industrial recycling, organics and resource management, with corporate functions in a Corporate Entities segment. Operating locations span Vermont, New Hampshire, New York, Massachusetts, Connecticut, Maine, Pennsylvania, Delaware, New Jersey, Maryland and West Virginia, headquartered in Rutland, Vermont.

Revenue drivers

• Eastern, Western and Mid-Atlantic solid waste regions — Each region provides a full range of non-hazardous solid waste services including collection, disposal, transfer and recycling. These regions are the core of the business; solid waste pricing rose 5.5% in Q2 2026, with collection price up 5.8% and disposal price up 4.7%.
• Resource Solutions — Leverages materials processing, industrial recycling, organics and resource management to serve larger commercial, municipal, institutional and industrial customers with more diverse waste and recycling needs. The segment contributed strong National Accounts growth in Q2 2026.
• Acquisitions — Nine acquisitions closed in fiscal 2025, particularly densifying the Mid-Atlantic region, and the Mountain State Waste acquisition closed January 1, 2026, expanding into West Virginia. Five acquisitions closed thus far in 2026 represent approximately $165 million in aggregate annualized revenues.
• Landfill volumes and internalization — Landfill volumes increased year-over-year in Q2 2026 from both third-party sales and internalization efforts, supporting disposal revenue alongside price growth.

Recent performance

Q2 2026 revenues were $543.7 million, up $78.4 million or 16.9% from the prior-year period, driven mainly by acquisitions, positive collection and disposal pricing, higher landfill volumes and strong National Accounts growth in Resource Solutions. Operating income was $20.0 million, up 3.6%, while net income fell 27.6% to $3.8 million from $5.2 million, largely due to higher depreciation and amortization and higher interest expense. Adjusted EBITDA rose 12.5% to $123.2 million and Adjusted Net Income rose 4.6% to $25.3 million. Net cash provided by operating activities was $161.0 million for the first half, up 15.3%, and Adjusted Free Cash Flow was $78.1 million, up 10.3%. Elevated fuel costs reduced Adjusted EBITDA margins by 40 basis points despite floating fuel recovery fees offsetting the higher cost.

Strategy

Management's stated objective is to maximize long-term shareholder value through financial performance, acquisition and organic growth, and strategic asset positioning. Key strategies include driving additional profitability in collection operations, optimizing long-term disposal capacity, creating incremental value through Resource Solutions, allocating capital to return-driven growth, and strengthening foundational pillars covering team, culture, customer focus and technology. The company continues to invest in team, technology, facilities and capital to support this plan, and describes its acquisition pipeline as very strong. In the Mid-Atlantic region, systems integration work is complete and route optimization initiatives have been initiated.

Risks

• Acquisition integration and expected benefits — The company's growth depends on consummating and integrating acquisitions and achieving expected annualized revenues, with nine deals closed in 2025 and five more in 2026 to absorb.
• Inflation and cost recovery — Management states that whether pricing programs and operational initiatives will outpace higher operating and construction costs from inflation and regulatory changes is a key uncertainty.
• Severe weather — Severe weather could impair results through increased costs, lost revenue, reduced operational efficiency or disruptions to operations, per the company's stated risk factors.
• Fuel and commodity price exposure — Higher fuel prices create margin pressure — elevated fuel costs were a 40 basis point headwind to Adjusted EBITDA margins in Q2 2026 — and recycling commodity pricing fluctuates.

Outlook

CEO Ned Coletta said the momentum built through the first half of the year and the strength of the operating platform reinforce confidence in the strategy and execution for the remainder of the year. Management pointed to further execution against its Mid-Atlantic plan in the second half and described the acquisition pipeline as very strong. Net income declined year-over-year in Q2 2026 on higher depreciation, amortization and interest expense, even as Adjusted EBITDA and Adjusted Free Cash Flow grew.