With a market cap of $64.9 billion, Republic Services, Inc. (RSG) is one of North America’s largest environmental services providers, offering non-hazardous waste collection, recycling, landfill operations, and renewable energy solutions to roughly 13 million customers. Headquartered in Phoenix, the company operates thousands of sites across the U.S. and Canada and continues to expand through core pricing, volume growth, and strategic acquisitions. Republic Services has been stuck in the slow lane compare ...

Back when I first covered Republic Services, Inc. ( RSG ), I rated it a Hold, citing their " Amazing Growth Story, But Not Worth Paying Big-Tech Prices ," with the stock now being down ~16% due mostlyAs of 2025, I've got over 10 years of researching companies. In total, throughout my investing life, I estimate that I researched (in depth) well over 1000 companies, from commodities like oil, natural gas, gold and copper to tech like Google or Nokia and many emerging market stocks, which I believe could help ...

Back when I first covered Republic Services, Inc. ( RSG ), I rated it a Hold, citing their " Amazing Growth Story, But Not Worth Paying Big-Tech Prices ," with the stock now being down ~16% due mostlyAs of 2025, I've got over 10 years of researching companies. In total, throughout my investing life, I estimate that I researched (in depth) well over 1000 companies, from commodities like oil, natural gas, gold and copper to tech like Google or Nokia and many emerging market stocks, which I believe could help ...

Core Insights - Republic Services reported mixed results for Q3 2025, with revenue increasing by 3.3% year over year to $4.2 billion, while net income decreased by 2.8% to $550 million, resulting in a margin of 13.1% [1] - The company's adjusted EBITDA rose by 6.1% year over year to $1.38 billion, with a margin of 32.8% [1] Revenue and Volumes - The core recycling and waste business saw revenue growth of 4.7% to $3.8 billion year over year, driven by strong performance in construction and demolition (C&D) and special waste activities [1] - C&D landfill volumes increased by 45%, largely due to $35 million in hurricane recovery efforts in the Carolinas, while special waste volumes rose by 18% [1] - Residential volumes declined by 2.4%, attributed to the intentional shedding of certain contracts [1] Recycling Initiatives - Republic began commercial production at the Indianapolis Polymer Center in July, with expectations for the Blue Polymer center to start production in late Q4 [1] - The company is planning further development of co-located facilities in Allentown, Pennsylvania, next year [1] - Despite a decline in commodity prices from $177 to $126 per ton year over year, demand at recycling centers remains strong [1] Environmental Services - Revenue for the environmental services segment fell by approximately 6.9% to $433 million, impacted by lower event-based volumes and ongoing weakness in the manufacturing sector [1] - The company is adjusting its pricing strategy for event-based work to better align with volume [1] Fleet Electrification - Republic's fleet electrification initiative continues to receive support from OEMs and customers, with 137 electric collection vehicles in operation by the end of the quarter, aiming for over 150 by year-end [1] Renewable Energy Projects - The company launched another renewable natural gas facility during the quarter, with six RNG facilities operational and a target of seven by year-end [1] - Republic is exploring landfill-gas-to-electricity projects to meet rising electricity demand [1] Labor Costs - Republic incurred $56 million in costs related to labor disputes this year, including revenue credits for missed services, with disputes concluding in October [1] - Employee turnover rates are trending lower compared to 2024 [1]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Revenue and Income - Revenue for the nine months ended September 30, 2025, increased by 3.9% to $12,456 million compared to $11,986 million for the same period in 2024[132] - Total revenue for the three months ended September 30, 2025, was $4,212 million, a 3.3% increase from $4,076 million in 2024[143] - Total revenue for the nine months ended September 30, 2025, reached $12,456 million, up from $11,986 million in 2024, reflecting a 3.9% growth[143] - Adjusted net income for the nine months ended September 30, 2025, was $1,646 million, or $5.26 per diluted share, compared to $1,535 million, or $4.87 per diluted share for the same period in 2024[137] - Net income attributable to Republic Services, Inc. for the three months ended September 30, 2025, was $550 million, or $1.76 per diluted share, compared to $566 million, or $1.80 per diluted share for the same period in 2024[134] Expenses and Costs - Expenses for the nine months ended September 30, 2025, included a cost of operations of $7,226 million, which was 58.0% of revenue[133] - Labor and related benefits for the three months ended September 30, 2025, were $812 million, representing 19.3% of total revenue[151] - Total cost of operations for the three months ended September 30, 2025, was $2,463 million, or 58.5% of total revenue[151] - Labor and related benefits increased for the nine months ended September 30, 2025, due to higher hourly and salaried wages, resulting in a total of $842 million, or 6.8% of revenue[162] - Selling, general and administrative expenses totaled $422 million, or 10.0% of revenue, for the three months ended September 30, 2025, compared to $406 million, also 10.0% of revenue in 2024[162] Restructuring and Charges - The company recorded restructuring charges of $3 million and $13 million for the three and nine months ended September 30, 2025, respectively[140] - The company expects to incur additional restructuring charges of approximately $3 million during the remainder of 2025[141] Operational Impact - Labor disruptions during the three and nine months ended September 30, 2025, had an impact of $56 million, including $16 million of customer credits and $40 million of cost of operations[142] - The average yield increased by 4.2%, contributing to revenue growth, while revenue from acquisitions net of divestitures added 1.3%[132] - Acquisitions, net of divestitures, contributed a 1.6% increase in revenue for the three months ended September 30, 2025, reflecting the company's growth strategy[152] Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2025, was $3,315 million, an increase from $2,914 million in the same period of 2024[195] - Capital expenditures during the nine months ended September 30, 2025, were $1,310 million, compared to $1,357 million for the same period in 2024[202] - The company plans to invest at least $1.1 billion in acquisitions in 2025[194] Debt and Interest - Total interest expense for the three months ended September 30, 2025, was $143 million, up from $138 million in the same period in 2024, primarily due to a higher overall debt balance[165] - The total debt to EBITDA ratio was approximately 2.5 as of September 30, 2025, which is below the maximum allowed ratio of 3.75[210] - The company had $1,941 million of principal floating rate debt as of September 30, 2025, with a potential annualized interest expense change of approximately $19 million for a 100 basis point interest rate shift[233] Assets and Equity - Total assets as of September 30, 2025, amounted to $33,789 million, an increase from $31,814 million as of September 30, 2024[176] - Cash and cash equivalents increased to $84 million as of September 30, 2025, up from $74 million at December 31, 2024[190] - The company repurchased 2.6 million shares of common stock for $599 million during the nine months ended September 30, 2025, compared to 1.7 million shares for $321 million in the same period of 2024[202] Environmental and Market Factors - Environmental solutions revenue decreased by 1.4% and 0.7% during the three and nine months ended September 30, 2025, primarily due to reduced manufacturing and emergency response activities[152] - The average price for recycled commodities was $126 per ton for the three months ended September 30, 2025, down from $177 per ton in 2024[152] - A $10 per ton change in the price of recycled commodities would impact annual revenue and operating income by approximately $11 million[149] - A twenty-cent per gallon change in diesel fuel price would impact fuel costs by approximately $27 million annually, while the fuel recovery fee would change by about $38 million per year at current participation rates[154]

Core Insights - Republic Services reported revenue of $4.21 billion for the quarter ended September 2025, reflecting a year-over-year increase of 3.3% [1] - The earnings per share (EPS) was $1.90, up from $1.81 in the same quarter last year, resulting in an EPS surprise of +7.34% against the consensus estimate of $1.77 [1] Revenue Performance - Environmental solutions revenue was $433 million, which is -6.8% year-over-year and below the average estimate of $493.31 million [4] - Recycling & Waste revenue matched the estimate at $3.78 billion [4] - Total Collection revenue was $2.84 billion, slightly below the estimate of $2.89 billion, with a year-over-year increase of +3.4% [4] - Small-container Collection revenue was $1.27 billion, compared to an estimate of $1.29 billion, showing a +4.8% year-over-year change [4] - Large-container Collection revenue was $797 million, slightly below the estimate of $810.97 million, with a +2.9% year-over-year change [4] - Residential Collection revenue was $754 million, below the estimate of $772.44 million, reflecting a +1.9% year-over-year change [4] - Landfill revenue was $845 million, exceeding the estimate of $812.49 million, with a +10% year-over-year increase [4] Stock Performance - Over the past month, shares of Republic Services have returned -7.4%, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Insights - Republic Services (RSG) reported quarterly earnings of $1.9 per share, exceeding the Zacks Consensus Estimate of $1.77 per share, and showing an increase from $1.81 per share a year ago, resulting in an earnings surprise of +7.34% [1] - The company posted revenues of $4.21 billion for the quarter ended September 2025, which was below the Zacks Consensus Estimate by 0.99%, but an increase from $4.08 billion year-over-year [2] - Republic Services has consistently surpassed consensus EPS estimates over the last four quarters, but has not beaten revenue estimates during the same period [2] Earnings Outlook - The immediate price movement of Republic Services' stock will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.72 on revenues of $4.22 billion, and for the current fiscal year, it is $6.85 on revenues of $16.72 billion [7] Industry Context - The Waste Removal Services industry, to which Republic Services belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Republic Services' stock performance [5][6]

Financial Data and Key Metrics Changes - The company achieved revenue growth of 3.3% and adjusted EBITDA growth of 6.1% in Q3 2025, with an adjusted EBITDA margin expansion of 80 basis points [4][10] - Adjusted earnings per share reached $1.90, and year-to-date adjusted free cash flow was $2.19 billion [4][14] - The customer retention rate remained strong at 94% [4] Business Line Data and Key Metrics Changes - Organic revenue growth was driven by strong pricing, with average yield on total revenue at 4% and related revenue at 4.9% [5][11] - Environmental solutions business faced a decline due to softness in manufacturing activity and lower event-driven volumes, impacting total company revenue by 140 basis points [6][13] - Adjusted EBITDA margin in the recycling and waste business was 34.3%, up 150 basis points compared to the prior year [13] Market Data and Key Metrics Changes - The average commodity price for recycling was $126 per ton, down from $177 per ton in the prior year, affecting organic revenue growth [12] - The company recorded approximately $100 million of event-driven revenue associated with hurricane and wildfire cleanups year-to-date [11] Company Strategy and Development Direction - The company aims for mid-single-digit revenue growth and faster growth in EBITDA and free cash flow, supported by disciplined pricing and strategic acquisitions [15] - Investments in sustainability, including polymer centers and renewable natural gas projects, are expected to contribute to long-term growth [8][9] Management's Comments on Operating Environment and Future Outlook - Management noted persistent headwinds in construction and manufacturing markets but expressed confidence in the business model and operational execution [4][15] - The outlook for 2026 remains cautious, with expectations of overcoming commodity headwinds and stabilizing demand in environmental solutions [20][39] Other Important Information - The company has invested over $1 billion in strategic acquisitions year-to-date and returned $1.13 billion to shareholders through dividends and share repurchases [9][10] - The company is advancing its fleet electrification efforts, with plans to have over 150 electric vehicles by year-end [9] Q&A Session Summary Question: Long-term growth algorithm for 2026 - Management confirmed the long-term growth algorithm of mid-single-digit revenue growth and faster EBITDA growth, while acknowledging tougher comparisons in 2026 [20] Question: Event-driven volumes and revenue impact - Management provided a breakdown of event-driven revenue across quarters, totaling $100 million year-to-date [21] Question: Market conditions and volume performance - Management indicated that the slowdown in manufacturing and project work has impacted volumes, but they expect a rebound as conditions stabilize [23][50] Question: Pricing and cost spread outlook - Management expects a price-cost spread of 75 to 100 basis points above inflation, indicating a positive outlook for pricing [27][56] Question: M&A pipeline and opportunities - The M&A pipeline remains strong, with a focus on both recycling and waste, and environmental solutions [32][76] Question: Environmental solutions business expectations - Management anticipates growth in the environmental solutions business next year, despite current sluggishness [35][39] Question: Labor disruption impact - Management believes the impact of labor disruptions has been captured, with no significant residual effects expected [44][45] Question: EV targets and OEM production - Management remains confident in their EV targets despite potential delays from OEMs, citing strong customer demand [46] Question: Revenue impact from union contract settlements - Management acknowledged a revenue impact of $16 million from credits related to union contract settlements [86]

Financial Performance - Reported net income for Q3 2025 was $550 million, or $1.76 per diluted share, compared to $566 million, or $1.80 per diluted share in Q3 2024[2] - Adjusted net income for Q3 2025 was $594 million, or $1.90 per diluted share, versus $568 million, or $1.81 per diluted share in Q3 2024[2] - Net income for the nine months ended September 30, 2025, was $1,595 million, an increase from $1,531 million in 2024[19] - Adjusted diluted earnings per share for Q3 2025 were $1.90, compared to $1.81 in Q3 2024[30] Revenue and Growth - Total revenue for Q3 2025 was $4.21 billion, reflecting a growth of 3.3%, with 1.7% organic growth and 1.6% growth from acquisitions[7] - Total revenue for the nine months ended September 30, 2025, was $12,456 million, up from $11,986 million in 2024, reflecting a growth of 3.9%[21] - Revenue for the Recycling & Waste segment in Q3 2025 was $3,779 million, with adjusted EBITDA of $1,295 million and a margin of 34.3%[28] Cash Flow and Investments - Year-to-date cash flow from operations was $3.32 billion, and adjusted free cash flow was $2.19 billion[4] - Cash provided by operating activities increased to $3,315 million for the nine months ended September 30, 2025, compared to $2,914 million in 2024[19] - Cash used in investing activities for the nine months ended September 30, 2025, was $2,571 million, compared to $1,749 million in 2024[19] - The company invested more than $1 billion in value-creating acquisitions year-to-date[4] Shareholder Returns - Cash returned to shareholders year-to-date was $1.13 billion, including $584 million in share repurchases and $544 million in dividends paid[4] - The company declared a quarterly dividend of $0.625 per share for shareholders of record on January 2, 2026[9] - Cash dividends paid increased to $544 million for the nine months ended September 30, 2025, from $505 million in 2024[19] - During the three months ended September 30, 2025, the company repurchased 2.3 million shares for $539 million at an average cost of $232.00 per share[41] Costs and Expenses - Total cost of operations for the nine months ended September 30, 2025, was $7,226 million, compared to $7,033 million in 2024, representing an increase of 2.8%[23] - Total selling, general and administrative expenses for Q3 2025 were $422 million, representing 10.0% of revenue, compared to $406 million and 10.0% in Q3 2024[24] - Labor and related benefits accounted for 19.9% of total revenue for the nine months ended September 30, 2025, slightly down from 20.1% in 2024[23] Operational Metrics - The average recycled commodity price per ton sold was $126, a decrease of $51 per ton compared to the prior year[7] - The average yield for the nine months ended September 30, 2025, was 5.1%, down from 6.5% in 2024[22] - Accounts receivable as of September 30, 2025, totaled $1,900 million, with days sales outstanding at 41.0 days, compared to 40.9 days in December 2024[39] Adjustments and Charges - Total adjustments for adjusted earnings in Q3 2025 were $59 million, leading to an adjusted net income of $594 million[30] - Restructuring charges incurred in Q3 2025 amounted to $3 million, down from $8 million in Q3 2024[34] - Interest expense for Q3 2025 was $143 million, slightly up from $138 million in Q3 2024[27] - The provision for income taxes in Q3 2025 was $95 million, compared to $81 million in Q3 2024[27] Risks and Future Outlook - The company expects revenue to be near the low end of its full-year 2025 guidance range[7] - The company acknowledges risks that could impact future performance, including labor disruptions and economic conditions[44] - Labor disruptions impacted the company by $56 million during the three and nine months ended September 30, 2025, including $16 million in customer credits and $40 million in operational costs[36]