Republic Services (NYSE:RSG) Q4 2025 Earnings call February 17, 2026 05:00 PM ET Company ParticipantsAaron Evans - VP of Investor RelationsBrian DelGhiaccio - CFOJon Vander Ark - CEOShlomo Rosenbaum - Managing DirectorYehuda Silverman - Equity Research AssociateConference Call ParticipantsAdam Bubis - Analyst and Engineering Construction AnalystBryan Nicholas Burgmeier - Equity Research AnalystDavid John Manthey - Senior Research AnalystJerry Revich - Managing Director and Senior Equity Research AnalystJohn ...

Republic Services (NYSE:RSG) Q4 2025 Earnings call February 17, 2026 05:00 PM ET Speaker7Good afternoon, and welcome to the Republic Services fourth quarter and full year 2025 investor conference call. Republic Services is traded on the New York Stock Exchange under the symbol RSG. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. ...

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]

Core Insights - The company experienced a revenue growth of 4.6% in Q2 2025, driven by strong core pricing in waste and recycling segments despite ongoing demand challenges in construction and manufacturing markets [5][23][15] - Adjusted EBITDA increased by 8% with a 100 basis point margin expansion, primarily due to pricing above cost inflation and event-related landfill activities [6][35] - The full-year 2025 revenue guidance was updated to a range of $16.675 billion to $16.75 billion, reflecting a reduction of approximately $190 million at the midpoint due to weak construction and manufacturing volumes [11][31] Revenue and Volume Performance - Environmental Solutions revenue decreased by $11 million in Q2 2025, attributed to lower event volumes and softness in manufacturing end markets [2][35] - Residential and large container volumes declined by 3.2% and 3.4%, respectively, due to soft construction activity and shedding of underperforming contracts [3][34] - Organic volume increased by 20 basis points, supported by hurricane cleanup in the Carolinas and wildfire remediation in Los Angeles, but was partially offset by declines in collection categories [6][25] Pricing and Customer Metrics - Core pricing on related revenue was 7%, with open market pricing at 8.6% and restricted pricing at 4.6% for Q2 2025 [7][33] - Customer retention rate exceeded 94%, indicating strong customer loyalty [7][24] - Average yield on total revenue was 4.1%, with an average yield on related revenue at 5% [33][24] Financial Metrics - Adjusted free cash flow for the first half of 2025 reached $1.42 billion, with full-year guidance raised to $2.375 billion to $2.415 billion, reflecting an $80 million cash tax benefit from bonus depreciation [8][31] - Total debt stood at $13.1 billion, with total liquidity at $3 billion and a leverage ratio of approximately 2.5x as of the end of Q2 2025 [9][36] - Year-to-date capital expenditures totaled $727 million, representing 38% of projected full-year spend [8][36] Sustainability and Strategic Initiatives - The Indianapolis Polymer Center began commercial production in July 2025, with six renewable natural gas projects commenced year-to-date [10][27] - The company aims to have over 150 electric collection vehicles in service by year-end 2025, with 27 facilities equipped with commercial-scale EV charging infrastructure [10][28] - Nearly $900 million was invested in acquisitions year-to-date, with a pipeline supporting more than $1 billion in potential deals for 2025 [9][29] Management Commentary - The CEO emphasized a commitment to pricing discipline amid volume challenges, stating that the company will prioritize price over volume when necessary [15][41] - Management described the current demand environment as the most challenging in over a decade, particularly in construction markets [15][51] - The CFO noted that $65 million of the revenue guidance reduction was due to recycling and waste volume weakness, with the remainder largely stemming from Environmental Solutions [14][39]