Republic Services(RSG) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Results Overview Republic Services delivered strong second quarter 2025 results, marked by significant financial and operational growth across key metrics and strategic initiatives Financial Performance Summary Republic Services reported strong Q2 2025 results with increased net income and adjusted EPS, driven by double-digit EBITDA growth and 100 basis points of adjusted EBITDA margin expansion, successfully pricing ahead of cost inflation Second Quarter 2025 Financial Performance (vs. Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | | :-------------------------- | :-------------------- | :-------------------- | :------------------- | | Net Income | $550 | $512 | +$38 | | Diluted EPS | $1.75 | $1.62 | +$0.13 | | Adjusted Net Income | $556 | $509 | +$47 | | Adjusted Diluted EPS | $1.77 | $1.61 | +$0.16 | - Expanded Net Income Margin by 40 Basis Points and Adjusted EBITDA Margin by 100 Basis Points[4] Key Operational Highlights The company achieved total revenue growth of 4.6% (3.1% organic), with core price increasing revenue by 5.7%, generating significant year-to-date cash flow and investing in acquisitions while increasing dividends Second Quarter 2025 Revenue Growth Components | Component | Growth | | :-------------------------------- | :----- | | Total Revenue Growth | 4.6% | | Organic Growth | 3.1% | | Growth from Acquisitions | 1.5% | | Core Price on Total Revenue | 5.7% | | Core Price on Related Business Revenue | 7.0% | | Average Yield on Total Revenue | 4.1% | | Volume Increase on Total Revenue | 0.2% | Second Quarter 2025 Key Financial Metrics | Metric | Value | YoY Change | | :-------------------- | :------ | :--------- | | Net Income (in millions) | $550 | - | | Net Income Margin | 13.0% | +0.4% (40 bps) | | EPS (in dollars) | $1.75 | +8.0% | | Adjusted EPS (in dollars) | $1.77 | +9.9% | | Adjusted EBITDA (in billions) | $1.36 | - | | Adjusted EBITDA Margin | 32.1% | +1.0% (100 bps) | Year-to-Date 2025 Cash Flow & Shareholder Returns | Metric | Value (in millions) | | :-------------------------------- | :------------------ | | Cash Flow from Operations | $2,130 | | Adjusted Free Cash Flow | $1,420 | | Cash Invested in Acquisitions | $888 | | Cash Returned to Shareholders | $407 | | - Share Repurchases | $45 | | - Dividends Paid | $362 | - The Company completed and commenced operations on four renewable natural gas projects during the quarter[5] Updated Full-Year 2025 Financial Guidance Republic Services updated its full-year 2025 financial guidance, raising the outlook for adjusted free cash flow while reaffirming adjusted EBITDA and adjusted diluted EPS targets Guidance Updates Republic Services updated its full-year 2025 financial guidance, increasing the outlook for adjusted free cash flow while reiterating original guidance for adjusted EBITDA and adjusted diluted EPS Updated Full-Year 2025 Financial Guidance | Metric | Previous Guidance | Updated Guidance | | :-------------------------- | :---------------- | :--------------- | | Revenue (in billions) | - | $16.675 - $16.750 | | Adjusted EBITDA (in billions) | $5.275 - $5.325 | Reiterated | | Adjusted Diluted EPS (in dollars) | $6.82 - $6.90 | Reiterated | | Adjusted Free Cash Flow (in billions) | - | $2.375 - $2.415 (Increased) | Quarterly Dividend Increase Republic Services' Board of Directors approved a 4.5-cent increase in the quarterly dividend, bringing it to $0.625 per share, payable on October 15, 2025 - Increased quarterly dividend by approximately 8 percent, with the new quarterly dividend set at $0.625 per share[4][9] About Republic Services Republic Services, Inc. is a leader in the environmental services industry, providing a comprehensive suite of products and services including recycling, solid waste, special waste, hazardous waste, and field services - Republic Services provides recycling, solid waste, special waste, hazardous waste, and field services, with a vision to partner with customers for a more sustainable world through circularity and decarbonization[14] Supplemental Unaudited Financial Information and Operating Data This section provides detailed unaudited financial statements and operating data, offering a comprehensive view of the company's balance sheet, income, cash flows, and revenue and cost analyses Consolidated Balance Sheets The balance sheet shows an increase in total assets to $33.4 billion as of June 30, 2025, from $32.4 billion at December 31, 2024, primarily driven by growth in goodwill and property and equipment, net Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Total Assets | $33,397 | $32,402 | | Total Current Liabilities | $3,647 | $4,128 | | Long-term debt, net of current maturities | $12,546 | $11,851 | | Total Stockholders' Equity | $12,052 | $11,407 | Unaudited Consolidated Statements of Income For the second quarter of 2025, Republic Services reported a 4.6% increase in revenue to $4.235 billion and a 7.0% increase in net income to $550 million compared to the prior year, reflecting improved operating income and diluted EPS Consolidated Statements of Income Highlights (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Revenue | $4,235 | $4,048 | $8,244 | $7,910 | | Operating income | $861 | $814 | $1,665 | $1,547 | | Net income | $550 | $512 | $1,045 | $966 | | Diluted earnings per share (in dollars) | $1.75 | $1.62 | $3.33 | $3.06 | | Cash dividends per common share (in dollars) | $0.580 | $0.535 | $1.160 | $1.070 | Unaudited Consolidated Statements of Cash Flows Year-to-date cash provided by operating activities increased to $2.134 billion in 2025 from $1.911 billion in 2024, while cash used in investing activities significantly increased due to higher cash used in acquisitions and investments Consolidated Statements of Cash Flows Highlights (in millions) | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :----------------------------------- | :------------------------------------------- | :------------------------------------------- | | Cash provided by operating activities | $2,134 | $1,911 | | Cash used in investing activities | $(1,815) | $(1,113) | | Cash used in financing activities | $(260) | $(435) | | Increase in cash, cash equivalents, restricted cash and restricted cash equivalents | $60 | $364 | | Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | $263 | $592 | Revenue Analysis Collection services remain the largest revenue contributor, accounting for 66.6% of total revenue in Q2 2025, with overall growth driven by price, volume, and acquisitions Revenue by Line of Business Total Revenue by Line of Business (in millions, as % of total revenue) | Line of Business | Q2 2025 Revenue (in millions) | Q2 2025 % | Q2 2024 Revenue (in millions) | Q2 2024 % | YTD 2025 Revenue (in millions) | YTD 2025 % | YTD 2024 Revenue (in millions) | YTD 2024 % | | :-------------------------------- | :---------------------------- | :-------- | :---------------------------- | :-------- | :----------------------------- | :--------- | :----------------------------- | :--------- | | Collection | $2,822 | 66.6% | $2,723 | 67.3% | $5,565 | 67.4% | $5,386 | 68.1% | | Transfer, net | $221 | 5.2% | $208 | 5.1% | $409 | 5.0% | $391 | 4.9% | | Landfill, net | $516 | 12.2% | $440 | 10.9% | $937 | 11.4% | $845 | 10.7% | | Environmental solutions, net | $462 | 10.9% | $473 | 11.7% | $911 | 11.1% | $896 | 11.3% | | Other | $214 | 5.1% | $204 | 5.0% | $422 | 5.1% | $392 | 5.0% | | Total Revenue | $4,235 | 100.0% | $4,048 | 100.0% | $8,244 | 100.0% | $7,910 | 100.0% | Revenue Components and Growth Drivers Changes in Components of Total Revenue (as % of total revenue) | Component | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Average yield | 4.1% | 5.5% | 4.3% | 5.8% | | Fuel recovery fees | (0.3)% | — | (0.4)% | (0.2)% | | Total price | 3.8% | 5.5% | 3.9% | 5.6% | | Volume | 0.2% | (0.8)% | (0.5)% | (0.9)% | | Recycling processing and commodity sales | — | 0.5% | 0.1% | 0.4% | | Environmental solutions | (0.9)% | 0.4% | (0.3)% | (0.4)% | | Total internal growth | 3.1% | 5.6% | 3.0% | 4.8% | | Acquisitions / divestitures, net | 1.5% | 3.0% | 1.2% | 3.4% | | Total | 4.6% | 8.6% | 4.2% | 8.2% | | Core price | 5.7% | 6.8% | 5.9% | 6.9% | Core Price, Average Yield, and Volume (as % of Related Business Revenue) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------ | :------ | :------ | :------- | :------- | | Core price | 7.0% | 8.1% | 7.2% | 8.3% | | Average yield | 5.0% | 6.6% | 5.2% | 7.0% | | Volume | 0.2% | (1.0)% | (0.6)% | (1.0)% | Cost of Operations Total cost of operations for Q2 2025 was $2.449 billion, representing 57.9% of revenue, a decrease from 58.8% in Q2 2024, with labor and related benefits as the largest component Major Components of Cost of Operations (in millions, as % of revenue) | Component | Q2 2025 Amount (in millions) | Q2 2025 % | Q2 2024 Amount (in millions) | Q2 2024 % | YTD 2025 Amount (in millions) | YTD 2025 % | YTD 2024 Amount (in millions) | YTD 2024 % | | :-------------------------- | :--------------------------- | :-------- | :--------------------------- | :-------- | :---------------------------- | :--------- | :---------------------------- | :--------- | | Labor and related benefits | $844 | 19.9% | $809 | 20.0% | $1,662 | 20.2% | $1,599 | 20.2% | | Transfer and disposal costs | $279 | 6.6% | $288 | 7.1% | $533 | 6.5% | $552 | 7.0% | | Maintenance and repairs | $379 | 9.0% | $370 | 9.1% | $738 | 8.9% | $726 | 9.2% | | Transportation and subcontract costs | $302 | 7.1% | $301 | 7.4% | $594 | 7.2% | $581 | 7.3% | | Fuel | $116 | 2.7% | $121 | 3.0% | $230 | 2.8% | $247 | 3.1% | | Disposal fees and taxes | $96 | 2.3% | $90 | 2.2% | $179 | 2.2% | $174 | 2.2% | | Landfill operating costs | $104 | 2.5% | $96 | 2.4% | $193 | 2.3% | $186 | 2.4% | | Risk management | $109 | 2.6% | $102 | 2.5% | $213 | 2.6% | $197 | 2.5% | | Other | $220 | 5.2% | $206 | 5.1% | $421 | 5.1% | $404 | 5.1% | | Total cost of operations | $2,449 | 57.9% | $2,383 | 58.8% | $4,763 | 57.8% | $4,666 | 59.0% | Selling, General and Administrative Expenses Selling, general and administrative expenses for Q2 2025 were $425 million, or 10.0% of revenue, a slight decrease from 10.1% in Q2 2024, with salaries and related benefits as the largest component Selling, General and Administrative Expenses (in millions, as % of revenue) | Component | Q2 2025 Amount (in millions) | Q2 2025 % | Q2 2024 Amount (in millions) | Q2 2024 % | YTD 2025 Amount (in millions) | YTD 2025 % | YTD 2024 Amount (in millions) | YTD 2024 % | | :-------------------------- | :--------------------------- | :-------- | :--------------------------- | :-------- | :---------------------------- | :--------- | :---------------------------- | :--------- | | Salaries and related benefits | $280 | 6.6% | $276 | 6.8% | $573 | 6.9% | $556 | 7.0% | | Provision for doubtful accounts | $8 | 0.2% | $12 | 0.3% | $18 | 0.2% | $20 | 0.3% | | Other | $137 | 3.2% | $119 | 3.0% | $261 | 3.2% | $246 | 3.1% | | Total SG&A expenses | $425 | 10.0% | $407 | 10.1% | $852 | 10.3% | $822 | 10.4% | Accounts Receivable Accounts receivable increased to $1.88 billion as of June 30, 2025, from $1.821 billion at December 31, 2024, while days sales outstanding remained stable at approximately 40.4 days Accounts Receivable and Days Sales Outstanding (in millions) | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Accounts receivable, net | $1,880 | $1,821 | | Allowance for doubtful accounts | $66 | $74 | | Days sales outstanding | 40.4 | 40.9 | | Days sales outstanding, net of deferred revenue | 29.9 | 30.0 | Cash Dividends Republic Services paid $181 million in cash dividends in April 2025 and recorded a quarterly dividend payable of $182 million as of June 30, 2025 - Paid a cash dividend of $181 million in April 2025 and recorded a quarterly dividend payable of $182 million as of June 30, 2025[42] Share Repurchase Program No shares of common stock were repurchased during Q2 2025, leaving approximately $2.5 billion in authorized purchase capacity under the October 2023 repurchase program - No shares were repurchased during Q2 2025. Remaining authorized purchase capacity under the October 2023 repurchase program is approximately $2.5 billion[43] Performance Metrics and Reconciliations of Certain Non-GAAP Measures This section provides detailed reconciliations of non-GAAP financial measures, including Adjusted EBITDA, Adjusted EPS, and Adjusted Free Cash Flow, offering insights into the company's operational performance and financial health Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA for Q2 2025 increased to $1.361 billion, with an adjusted EBITDA margin of 32.1%, up 100 basis points from the prior year, demonstrating strong operational performance Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation (in millions, as % of revenue) | Metric | Q2 2025 Amount (in millions) | Q2 2025 % | Q2 2024 Amount (in millions) | Q2 2024 % | YTD 2025 Amount (in millions) | YTD 2025 % | YTD 2024 Amount (in millions) | YTD 2024 % | | :----------------------------------- | :--------------------------- | :-------- | :--------------------------- | :-------- | :---------------------------- | :--------- | :---------------------------- | :--------- | | Net income attributable to Republic Services, Inc. | $550 | 13.0% | $512 | 12.6% | $1,045 | 12.7% | $965 | 12.2% | | EBITDA | $1,350 | 31.9% | $1,220 | 30.1% | $2,605 | 31.6% | $2,370 | 30.0% | | Total adjustments | $11 | - | $38 | - | $24 | - | $52 | - | | Adjusted EBITDA | $1,361 | 32.1% | $1,258 | 31.1% | $2,629 | 31.9% | $2,422 | 30.6% | Adjusted EBITDA and Adjusted EBITDA Margin by Business Type Recycling & Waste Solutions generated $1.252 billion in Adjusted EBITDA for Q2 2025 with a 33.2% margin, while Environmental Solutions contributed $109 million with a 23.7% margin Adjusted EBITDA and Adjusted EBITDA Margin by Business Type (in millions, as % of revenue) | Business Type | Q2 2025 Revenue (in millions) | Q2 2025 Adj. EBITDA (in millions) | Q2 2025 Adj. EBITDA Margin | Q2 2024 Revenue (in millions) | Q2 2024 Adj. EBITDA (in millions) | Q2 2024 Adj. EBITDA Margin | | :-------------------------- | :---------------------------- | :-------------------------------- | :------------------------- | :---------------------------- | :-------------------------------- | :------------------------- | | Recycling & Waste Solutions | $3,773 | $1,252 | 33.2% | $3,575 | $1,146 | 32.0% | | Environmental Solutions | $462 | $109 | 23.7% | $473 | $112 | 23.7% | | Total | $4,235 | $1,361 | 32.1% | $4,048 | $1,258 | 31.1% | Adjusted Earnings Per Share Adjusted diluted EPS for Q2 2025 was $1.77, an increase from $1.61 in Q2 2024, after accounting for restructuring charges and business divestitures/impairments Adjusted Diluted Earnings Per Share Reconciliation (in millions, except per share data) | Metric | Q2 2025 Net Income - Republic (in millions) | Q2 2025 Diluted EPS (in dollars) | Q2 2024 Net Income - Republic (in millions) | Q2 2024 Diluted EPS (in dollars) | | :----------------------------------- | :------------------------------------------ | :------------------------------- | :------------------------------------------ | :------------------------------- | | As reported | $550 | $1.75 | $512 | $1.62 | | Total adjustments | $6 | $0.02 | $(3) | $(0.01) | | As adjusted | $556 | $1.77 | $509 | $1.61 | Adjusted Free Cash Flow Year-to-date adjusted free cash flow significantly increased to $1.420 billion in 2025 from $1.151 billion in 2024, reflecting strong cash generation after capital expenditures and certain adjustments Adjusted Free Cash Flow Reconciliation (in millions) | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :----------------------------------- | :------------------------------------------- | :------------------------------------------- | | Cash provided by operating activities | $2,134 | $1,911 | | Property and equipment received | $(727) | $(773) | | Proceeds from sales of property and equipment | $8 | $5 | | Restructuring payments, net of tax | $5 | $7 | | Divestiture related tax payments | — | $1 | | Adjusted free cash flow | $1,420 | $1,151 | - Adjusted free cash flow has material limitations as it excludes certain required payments like debt service and dividends[39] Non-GAAP Measure Explanations and Adjustments This section provides the rationale for using non-GAAP measures like EBITDA and Adjusted EBITDA, explaining their usefulness in understanding operational performance by excluding non-cash and specific non-recurring items, and details the nature of adjustments made for debt extinguishment, restructuring, and business divestitures - EBITDA and Adjusted EBITDA are used to provide insight into operating performance exclusive of certain non-cash and other costs, demonstrating the ability to execute financial strategy and understand ongoing performance separate from disproportionate impacts[34][35] Gain on Extinguishment of Debt and Other Related Costs - No gain or loss on extinguishment of debt was recognized in Q2 or YTD 2025. In Q2 and YTD 2024, an $8 million gain was recognized from early settlement of cash flow hedges, reducing interest expense[36] Restructuring Charges - Restructuring charges were $6 million in Q2 2025 (YTD $9 million), primarily related to the design and implementation of a new accounts receivable system. In Q2 2024 (YTD $12 million), charges related to asset management and customer/order management software systems redesign[37][38] Loss (Gain) on Business Divestitures and Impairments, Net - Recorded a loss on business divestitures and impairments of $3 million in Q2 2025 (YTD $1 million), compared to a net gain of $2 million in Q2 2024[38] Reconciliation of Full-Year 2025 Financial Guidance This section provides a detailed reconciliation of the company's full-year 2025 financial guidance for Adjusted EBITDA, Adjusted Diluted EPS, and Adjusted Free Cash Flow, including specific adjustments Adjusted EBITDA Reconciliation The anticipated full-year 2025 Adjusted EBITDA is projected to be in the range of $5.275 billion to $5.325 billion, after adjusting for items such as depreciation, interest expense, and estimated labor disruption costs Anticipated Full-Year 2025 Adjusted EBITDA Reconciliation (in millions) | Metric | Year Ending December 31, 2025 (in millions) | | :----------------------------------- | :------------------------------------------ | | Net income attributable to Republic Services, Inc. | $2,090 - $2,100 | | Provision for income taxes | $485 - $490 | | Interest expense, net | $570 | | Depreciation, depletion, amortization and accretion | $1,920 - $1,930 | | Loss from unconsolidated equity method investments | $170 | | Restructuring charges | $15 | | Labor disruption | $25 - $50 | | Adjusted EBITDA | $5,275 - $5,325 | Adjusted Diluted Earnings per Share Reconciliation Anticipated full-year 2025 Adjusted Diluted EPS is projected to be between $6.82 and $6.90, incorporating adjustments for restructuring charges and estimated labor disruption impacts Anticipated Full-Year 2025 Adjusted Diluted Earnings per Share Reconciliation | Metric | Year Ending December 31, 2025 (in dollars) | | :----------------------------------- | :----------------------------------------- | | Diluted earnings per share | $6.72 - $6.74 | | Restructuring charges | $0.04 | | Labor disruption | $0.06 - $0.12 | | Adjusted diluted earnings per share | $6.82 - $6.90 | Adjusted Free Cash Flow Reconciliation The anticipated full-year 2025 Adjusted Free Cash Flow is projected to be in the range of $2.375 billion to $2.415 billion, after accounting for capital expenditures, asset sales, restructuring payments, and estimated labor disruption impacts Anticipated Full-Year 2025 Adjusted Free Cash Flow Reconciliation (in millions) | Metric | Year Ending December 31, 2025 (in millions) | | :----------------------------------- | :------------------------------------------ | | Cash provided by operating activities | $4,230 - $4,290 | | Property and equipment received | $(1,895) - $(1,935) | | Proceeds from sales of property and equipment | $10 | | Restructuring payments, net of tax | $10 | | Labor disruption, net of tax | $20 - $40 | | Adjusted free cash flow | $2,375 - $2,415 | - The financial guidance is based on current economic conditions. Labor disruptions in certain isolated markets, which began in July 2025, are estimated to impact the full year, with the ultimate impact dependent on their duration[48] Information Regarding Forward-Looking Statements This section serves as a disclaimer, highlighting that the press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from projections - The press release contains forward-looking statements subject to risks and uncertainties, including impacts from the global economy, interest rates, acquisitions, work stoppages, and acts of war. Readers are cautioned not to place undue reliance on these statements, and the company does not undertake to update them[50]