Republic Services retools environmental services pricing after segment decline

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]