Casella Waste Systems, Inc. (CWST) Earnings & Analysis

Latest quarter

Casella reported Q2 FY2026 revenue of $543.7 million, up 16.9% from $465.3 million a year earlier. On the consensus measure, revenue was $543.8 million, above the $535.4 million estimate; adjusted earnings per share of $0.40 also exceeded the $0.27 consensus. Diluted EPS was $0.06, compared with $0.08 a year earlier.

CFO Brad Helgeson said acquisitions and same-store growth contributed to the revenue increase. He said solid waste revenue rose as pricing increased, although overall volume declined; landfill volumes rose while collection volumes fell. Resource Solutions revenue also increased, with growth in both processing and national accounts.

Casella’s gross margin fell to 32.9% from 33.8%, while operating margin declined to 3.67% from 4.14%. Helgeson said higher fuel recovery fees offset the dollar increase in fuel costs but diluted adjusted EBITDA margin, and that Resource Solutions also weighed on the margin comparison. Casella reported quarterly free cash flow of $26.7 million, compared with $23.4 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Ned Coletta said higher disposal volumes largely offset lower collection volumes as Casella prioritized pricing and profitability in collection. He said volumes followed their normal seasonal increase through July and early August. CFO Brad Helgeson said landfill volumes rose 8.4% year over year in the quarter, while overall solid waste pricing rose 5.5%.

Helgeson said fuel recovery fees fully offset the dollar increase in fuel costs, but the added fee revenue diluted margins. He said Resource Solutions also weighed on the adjusted EBITDA margin comparison, partly because recycling volumes had been higher a year earlier while a competitor’s facility was undergoing a retrofit. Coletta said that facility came back online in the third quarter.

Asked about Mid-Atlantic margins, Helgeson said he expected them to improve in the third and fourth quarters. Coletta said systems integration was completed in May and route consolidation began in late June and July. He said the process would take more than five months and involve employees and customers across the business. Helgeson described cost reductions from operating fewer routes as the immediate opportunity; he said pricing was a longer-term opportunity but did not put a specific dollar figure on it.

Coletta said Casella had eliminated 13 routes and their related trucks and labor. He also said the company was investing in AI-enabled tools and data infrastructure to improve back-office efficiency. Casella had completed five acquisitions so far in 2026, representing approximately $165 million of annualized revenue, Coletta said.

Helgeson said the July 1 acquisition represented about $15 million of annual revenue. Discussing the revenue guidance increase, he said most of the change reflected fuel recovery fees and that the underlying business was performing close to expectations.

Guidance

Casella raised its FY2026 revenue guidance to $2.09 billion to $2.11 billion from $2.060 billion to $2.080 billion. Helgeson attributed the increase to acquisitions and higher expected fuel recovery fees, assuming fuel prices remain elevated.

The company lowered its GAAP net income guidance to $0 to $6 million from $4 million to $10 million. Helgeson attributed the change to higher forecast amortization expense and income tax provision.