Clean Harbors(CLH) - 2025 Q2 - Quarterly Results

Executive Summary Clean Harbors reported flat Q2 2025 revenues at $1.55 billion but achieved record Adjusted EBITDA of $336.2 million, driven by strong ES segment growth and effective SKSS stabilization, while management emphasized cost reduction and safety Company Overview & Q2 2025 Highlights Clean Harbors, a leading environmental and industrial services provider, announced Q2 2025 financial results, reporting flat revenues at $1.55 billion but achieving record Adjusted EBITDA of $336.2 million, a 60 bps margin increase. The Environmental Services (ES) segment showed growth, driven by strong incineration performance and robust demand - Clean Harbors, Inc. (NYSE: CLH) is North America's leading provider of environmental and industrial services[3][18] Q2 2025 Key Financial Highlights | Metric | Value | | :-------------------------- | :------------ | | Revenues | $1.55 billion (flat YoY) | | Q2 Net Income | $126.9 million | | Diluted EPS | $2.36 | | Record Q2 Adjusted EBITDA | $336.2 million | | Adjusted EBITDA Margin | 21.7% (+60 bps) | - Environmental Services (ES) segment achieved 3% revenue growth and 5% Adjusted EBITDA growth, driven by strong incineration performance and robust demand[6] Management Commentary Co-CEOs highlighted consistent profitable growth in the ES segment due to strong disposal asset demand and stabilization in the SKSS segment from effective collection strategies. They emphasized improved consolidated Adjusted EBITDA margin through cost structure reduction, particularly SG&A, and achieved the best quarterly safety results in company history - Environmental Services (ES) segment experienced consistent profitable growth with strong demand for disposal assets[4] - Safety-Kleen Sustainability Solutions (SKSS) segment stabilized, with favorable results from collection strategies[4] - Consolidated Adjusted EBITDA margin improved by 60 basis points year-over-year by lowering the overall cost structure with a sharp focus on SG&A spend[4] - Achieved the best quarterly safety results in company history, generating a Total Recordable Incident Rate (TRIR) of 0.40[4] Second-Quarter 2025 Financial Results Clean Harbors reported flat Q2 2025 revenues of $1.55 billion, with a slight decrease in net income but an increase in Adjusted EBITDA, driven by strong performance in the Environmental Services segment Consolidated Financial Performance For Q2 2025, Clean Harbors reported revenues of $1.55 billion, flat year-over-year. Income from operations decreased slightly to $210.3 million, and net income was $126.9 million ($2.36 per diluted share), down from $133.3 million ($2.46 per diluted share) in Q2 2024. Adjusted EBITDA, however, increased to $336.2 million from $327.8 million Q2 2025 Consolidated Financials (vs. Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change | | :-------------------------- | :--------------------- | :--------------------- | :----- | | Revenues | $1,549,854 | $1,552,719 | Flat | | Income from operations | $210,298 | $215,493 | (2.4%) | | Net income | $126,905 | $133,280 | (4.8%) | | Diluted EPS | $2.36 | $2.46 | (4.1%) | | Adjusted EBITDA | $336,237 | $327,816 | 2.6% | | Adjusted EBITDA Margin | 21.7% | 21.1% | +0.6 pts | Segment Performance The Environmental Services (ES) segment achieved 3% revenue growth and 5% Adjusted EBITDA growth, marking its 13th consecutive quarter of year-over-year Adjusted EBITDA margin improvement, driven by strong disposal volumes and pricing. The Safety-Kleen Sustainability Solutions (SKSS) segment exceeded expectations, supported by effective waste oil collection strategies and aggressive management of re-refining spread - ES segment achieved 3% growth in revenue and 5% growth in Adjusted EBITDA, marking its 13th consecutive quarter of year-over-year improvement in segment Adjusted EBITDA margin[6][7] - SKSS segment results were ahead of expectations, supported by waste oil collection strategies and aggressive management of re-refining spread[7] Q2 2025 Segment Revenue (vs. Q2 2024, in thousands) | Segment | Q2 2025 Third-Party Revenues | Q2 2024 Third-Party Revenues | Change | | :------------------------------ | :--------------------------- | :--------------------------- | :----- | | Environmental Services | $1,330,059 | $1,297,298 | 2.5% | | Safety-Kleen Sustainability Solutions | $219,706 | $255,322 | (13.9%) | Q2 2025 Segment Adjusted EBITDA (vs. Q2 2024, in thousands) | Segment | Q2 2025 Adjusted EBITDA | Q2 2024 Adjusted EBITDA | Change | | :------------------------------ | :---------------------- | :---------------------- | :----- | | Environmental Services | $376,194 | $359,915 | 4.5% | | Safety-Kleen Sustainability Solutions | $38,313 | $51,476 | (25.6%) | Environmental Services (ES) The ES segment's top-line growth was led by Safety-Kleen Environmental Services and Technical Services, with strong incineration utilization and improved margins across Field and Industrial Services - Top-line growth in ES segment was led by Safety-Kleen Environmental Services, which rose 9% through pricing and growth in core offerings[7] - Technical Services revenue grew 4% on strength in disposal volumes[7] - Incineration utilization (excluding new Kimball incinerator) was 89%, with average incineration price rising 7% on a mix-adjusted basis[7] - Field Services and Industrial Services improved margins year-over-year[7] Safety-Kleen Sustainability Solutions (SKSS) The SKSS segment exceeded expectations through effective waste oil collection strategies, aggressive re-refining spread management, and a strategic shift to higher charge-for-oil pricing - Results in SKSS segment were ahead of expectations, supported by waste oil collection strategies and success in aggressively managing re-refining spread[7] - Collected 64 million gallons of waste oil in the quarter, enabling production goals[7] - Shift to higher charge-for-oil (CFO) pricing, continued since November, positions the segment well for the back half of the year[7] - Expects to achieve annual targets for this business in 2025 while reducing volatility[7] Business Outlook and Financial Guidance Clean Harbors anticipates strong second-half momentum, driven by a promising North American economic outlook and strategic initiatives, reiterating full-year 2025 Adjusted EBITDA and Adjusted Free Cash Flow guidance Market Outlook and Strategic Focus Clean Harbors anticipates strong momentum in the second half of 2025, supported by a promising North American economic outlook and continued reshoring. Despite short-term tariff uncertainty, the company expects long-term customer activity to be driven by tax bill benefits and manufacturing incentives. The ES segment sees healthy demand and a substantial project pipeline, including remediation projects. For SKSS, the focus remains on managing collection rates, cost structure, and advancing value-added initiatives like the Castrol partnership and Group III production - Anticipates a strong second half of 2025 with considerable momentum across core markets, backed by a promising North American economic outlook as reshoring continues[8] - Expects tangible benefits of recent tax bill and incentives to invest in American manufacturing to drive customer activity over the longer-term, despite short-term tariff uncertainty[8] - ES segment continues to see healthy overall demand from customers, resulting in a substantial project pipeline, with multiple customers expected to proceed with remediation projects[8] - For SKSS, the focus will remain on actively managing collection rates and cost structure, while advancing value-added initiatives like the Castrol partnership and Group III production[8] Full-Year 2025 Guidance Clean Harbors reiterated its full-year 2025 guidance, expecting Adjusted EBITDA in the range of $1.16 billion to $1.20 billion (midpoint $1.18 billion, 6% YoY growth) and Adjusted Free Cash Flow between $430 million and $490 million (midpoint $460 million, nearly 30% YoY increase). For Q3 2025, Adjusted EBITDA is projected to grow 9-12% year-over-year - In the third quarter of 2025, Clean Harbors expects Adjusted EBITDA to grow 9-12% from the comparable quarter of the prior year[8] Full-Year 2025 Guidance Midpoints | Metric | Range | Midpoint | YoY Growth (Midpoint) | | :---------------------- | :-------------------- | :--------- | :-------------------- | | Adjusted EBITDA | $1.16 billion - $1.20 billion | $1.18 billion | 6% | | Adjusted Free Cash Flow | $430 million - $490 million | $460 million | ~30% | - The Adjusted EBITDA range is based on anticipated GAAP net income in the range of $383 million to $419 million[11][13] - The Adjusted free cash flow range is based on anticipated net cash from operating activities in the range of $775 million to $865 million[11][15] Non-GAAP Financial Measures Reconciliation This section provides detailed reconciliations for non-GAAP financial measures, including Adjusted EBITDA and Adjusted Free Cash Flow, to their most directly comparable GAAP measures Adjusted EBITDA Reconciliation Clean Harbors defines Adjusted EBITDA as a non-GAAP measure, supplementing GAAP net income, and uses it to evaluate business performance. The reconciliation table shows adjustments for items such as accretion of environmental liabilities, stock-based compensation, depreciation and amortization, other expense, interest expense, and provision for income taxes - Adjusted EBITDA is a non-GAAP financial measure used by management to routinely evaluate the performance of its businesses, viewed as a supplement to GAAP measurements[9] Adjusted EBITDA Reconciliation (Q2 2025 vs. Q2 2024, in thousands) | Item | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Net income | $126,905 | $133,280 | | Accretion of environmental liabilities | $3,591 | $3,304 | | Stock-based compensation | $6,063 | $8,515 | | Depreciation and amortization | $116,285 | $100,504 | | Other expense, net | $603 | $167 | | Interest expense, net of interest income | $37,106 | $36,449 | | Provision for income taxes | $45,684 | $45,597 | | Adjusted EBITDA | $336,237 | $327,816 | | Adjusted EBITDA Margin | 21.7% | 21.1% | Projected Adjusted EBITDA Reconciliation (FY 2025, in millions) | Item | Low End | High End | | :-------------------------- | :------ | :------- | | Projected GAAP net income | $383 | $419 | | Accretion of environmental liabilities | $15 | $14 | | Stock-based compensation | $28 | $31 | | Depreciation and amortization | $450 | $440 | | Interest expense, net | $147 | $142 | | Provision for income taxes | $137 | $154 | | Projected Adjusted EBITDA | $1,160 | $1,200 | Adjusted Free Cash Flow Reconciliation Adjusted free cash flow is a non-GAAP liquidity measure defined as net cash from operating activities less additions to property, plant and equipment, plus proceeds from sale and disposal of fixed assets, with adjustments for non-operating cash impacts. The company excludes significant one-time growth investments, such as the Phoenix Hub investment, from this measure as they are not indicative of current period free cash flow generation - Adjusted free cash flow is a non-GAAP measure of liquidity, defined as net cash from operating activities less additions to property, plant and equipment plus proceeds from sale and disposal of fixed assets, adjusted for non-operating activities[10] - Significant one-time growth investments, such as the cash investment in Phoenix Hub, are excluded from adjusted free cash flow as they are not indicative of free cash flow generation for the current period[14] Adjusted Free Cash Flow Reconciliation (Q2 2025 vs. Q2 2024, in thousands) | Item | Q2 2025 | Q2 2024 | | :---------------------------------- | :------ | :------ | | Net cash from operating activities | $208,040 | $216,045 | | Additions to property, plant and equipment | ($90,029) | ($135,110) | | Cash investment in Phoenix Hub | $12,436 | — | | Proceeds from sale and disposal of fixed assets | $2,720 | $3,287 | | Adjusted free cash flow | $133,167 | $84,222 | Projected Adjusted Free Cash Flow Reconciliation (FY 2025, in millions) | Item | Low End | High End | | :---------------------------------- | :------ | :------- | | Projected net cash from operating activities | $775 | $865 | | Additions to property, plant and equipment | ($370) | ($400) | | Cash investment in Phoenix Hub | $15 | $15 | | Proceeds from sale and disposal of fixed assets | $10 | $10 | | Projected adjusted free cash flow | $430 | $490 | Company Information This section provides details on the Q2 2025 conference call, an overview of Clean Harbors' services and operations, a safe harbor statement regarding forward-looking information, and investor relations contacts Conference Call Details Clean Harbors hosted a conference call on July 30, 2025, at 9:00 a.m. ET to discuss financial results, business outlook, and growth strategy. Investors could access the webcast and slides via the company's Investor Relations website or by dialing in. An archived webcast is available for those unable to attend live - Conference call held on July 30, 2025, at 9:00 a.m. (ET) to discuss financial results, business outlook, and growth strategy[16] - Webcast and accompanying slides available on the Investor Relations section of www.cleanharbors.com[17](index=17&type=chunk) - Live call accessible by dialing 877.709.8155 or 201.689.8881; webcast will be archived on the Company's website[17] About Clean Harbors Clean Harbors (NYSE: CLH) is North America's leading provider of environmental and industrial services, serving a diverse customer base including Fortune 500 companies and government agencies. Its services encompass hazardous waste management, emergency spill response, industrial cleaning, and recycling. Through its Safety-Kleen subsidiary, it also provides parts washers, environmental services, and is North America's largest re-refiner and recycler of used oil. Founded in 1980, the company operates across the US, Canada, Mexico, Puerto Rico, and India - Clean Harbors (NYSE: CLH) is North America's leading provider of environmental and industrial services[18] - Serves a diverse customer base, including a majority of Fortune 500 companies, across industries like chemical, manufacturing, refining, and government agencies[18] - Offers services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services[18] - Through its Safety-Kleen subsidiary, it is a leading provider of parts washers and environmental services, and North America's largest re-refiner and recycler of used oil[18] Safe Harbor Statement The document contains forward-looking statements, identifiable by specific terminology, regarding future financial and operating results, plans, strategy, and market conditions. These statements are based on management's beliefs as of the press release date and are subject to various risks and uncertainties, including operational, safety, cybersecurity, economic, regulatory, and litigation risks, which could cause actual results to differ materially. Readers are cautioned not to place undue reliance on these statements, and Clean Harbors disclaims any obligation to revise them beyond SEC filings - Statements that are not historical facts are forward-looking statements, identifiable by words like 'believes,' 'expects,' 'intends,' 'anticipates,' 'plans to,' 'seeks,' 'will,' 'should,' 'estimates,' 'projects,' 'may,' 'likely,' 'potential,' 'outlook' or similar expressions[19] - Such statements are based upon the beliefs and expectations of Clean Harbors' management as of the date of the press release and are subject to certain risks and uncertainties that could cause actual results to differ materially[19] - Risks include operational and safety risks, cybersecurity risks, natural disasters, retention of key personnel, environmental liability, negative economic developments, regulatory changes, litigation, and other factors identified as 'Risk Factors' in SEC filings[19][20] - Readers are cautioned not to place undue reliance on these forward-looking statements, and Clean Harbors undertakes no obligation to revise or publicly release the results of any revision other than through SEC filings[20] Contacts Investor relations contacts for Clean Harbors are Eric J. Dugas, EVP and Chief Financial Officer, and Jim Buckley, SVP Investor Relations. Both can be reached at 781.792.5100 or via email at InvestorRelations@cleanharbors.com or Buckley.James@cleanharbors.com - Contacts for investor relations are Eric J. Dugas (EVP and Chief Financial Officer) and Jim Buckley (SVP Investor Relations)[21] - Contact phone number: 781.792.5100[21] - Contact emails: InvestorRelations@cleanharbors.com and Buckley.James@cleanharbors.com[21] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated statements of operations, balance sheets, cash flows, and supplemental segment data for Clean Harbors Statements of Operations The unaudited condensed consolidated statements of operations show that for the three months ended June 30, 2025, revenues were $1,549,854 thousand, with net income of $126,905 thousand, resulting in diluted EPS of $2.36. For the six months ended June 30, 2025, revenues were $2,981,804 thousand, with net income of $185,585 thousand and diluted EPS of $3.44 Unaudited Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $1,549,854 | $1,552,719 | $2,981,804 | $2,929,414 | | Cost of revenues | $1,033,497 | $1,035,542 | $2,055,381 | $2,006,612 | | Selling, general and administrative expenses | $186,183 | $197,876 | $369,030 | $379,744 | | Income from operations | $210,298 | $215,493 | $321,917 | $340,968 | | Net income | $126,905 | $133,280 | $185,585 | $203,112 | | Diluted EPS | $2.36 | $2.46 | $3.44 | $3.75 | Balance Sheets As of June 30, 2025, Clean Harbors reported total assets of $7,439,929 thousand, an increase from $7,377,278 thousand at December 31, 2024. Total current assets were $2,475,381 thousand, and total stockholders' equity was $2,714,067 thousand Condensed Consolidated Balance Sheets (in thousands) | Item | June 30, 2025 (unaudited) | December 31, 2024 | | :------------------------------------ | :-------------------------- | :------------------ | | Cash and cash equivalents | $600,186 | $687,192 | | Total current assets | $2,475,381 | $2,433,796 | | Property, plant and equipment, net | $2,507,101 | $2,447,941 | | Goodwill | $1,479,805 | $1,477,199 | | Total assets | $7,439,929 | $7,377,278 | | Total current liabilities | $1,011,750 | $1,102,666 | | Long-term debt, less current portion | $2,766,530 | $2,771,117 | | Total stockholders' equity, net | $2,714,067 | $2,573,529 | | Total liabilities and stockholders' equity | $7,439,929 | $7,377,278 | Statements of Cash Flows For the six months ended June 30, 2025, net cash from operating activities was $209,645 thousand, a decrease from $234,594 thousand in the prior year period. Net cash used in investing activities was $200,742 thousand, significantly lower than $730,670 thousand in H1 2024, primarily due to no major acquisitions. Net cash used in financing activities was $101,169 thousand, compared to net cash from financing activities of $455,503 thousand in H1 2024, largely due to debt issuance in the prior year. Cash and cash equivalents at period end were $600,186 thousand Unaudited Consolidated Statements of Cash Flows (Six Months Ended, in thousands) | Item | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :-------------- | :-------------- | | Net income | $185,585 | $203,112 | | Depreciation and amortization | $228,265 | $195,569 | | Net cash from operating activities | $209,645 | $234,594 | | Net cash used in investing activities | ($200,742) | ($730,670) | | Net cash (used in) from financing activities | ($101,169) | $455,503 | | Decrease in cash and cash equivalents | ($87,006) | ($42,706) | | Cash and cash equivalents, end of period | $600,186 | $401,992 | - Cash payments for interest were $76,570 thousand for H1 2025, compared to $74,079 thousand for H1 2024[28] - Income taxes paid, net of refunds, were $64,534 thousand for H1 2025, compared to $70,307 thousand for H1 2024[28] Supplemental Segment Data Supplemental segment data for Q2 2025 shows Environmental Services (ES) with third-party revenues of $1,330,059 thousand and Adjusted EBITDA of $376,194 thousand. Safety-Kleen Sustainability Solutions (SKSS) reported third-party revenues of $219,706 thousand and Adjusted EBITDA of $38,313 thousand for the quarter. For the six months ended June 30, 2025, ES third-party revenues were $2,537,097 thousand and Adjusted EBITDA was $650,785 thousand, while SKSS reported $444,521 thousand in third-party revenues and $66,565 thousand in Adjusted EBITDA Supplemental Segment Revenue (in thousands) | Segment | Q2 2025 Third-Party Revenues | Q2 2024 Third-Party Revenues | H1 2025 Third-Party Revenues | H1 2024 Third-Party Revenues | | :------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Environmental Services | $1,330,059 | $1,297,298 | $2,537,097 | $2,458,577 | | Safety-Kleen Sustainability Solutions | $219,706 | $255,322 | $444,521 | $470,636 | | Corporate | $89 | $99 | $186 | $201 | | Total | $1,549,854 | $1,552,719 | $2,981,804 | $2,929,414 | Supplemental Segment Adjusted EBITDA (in thousands) | Segment | Q2 2025 Adjusted EBITDA | Q2 2024 Adjusted EBITDA | H1 2025 Adjusted EBITDA | H1 2024 Adjusted EBITDA | | :------------------------------ | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Environmental Services | $376,194 | $359,915 | $650,785 | $624,390 | | Safety-Kleen Sustainability Solutions | $38,313 | $51,476 | $66,565 | $81,176 | | Corporate | ($78,270) | ($83,575) | ($146,259) | ($147,655) | | Total | $336,237 | $327,816 | $571,091 | $557,911 |