RUTLAND, Vt., Nov. 09, 2026 (GLOBE NEWSWIRE) -- Casella Waste Systems, Inc. (Nasdaq: CWST), a regional solid waste, recycling and resource management services company, today reported its financial results for the three and nine month periods ended September 30, 2026.
Key Highlights:
- Revenues were $559.2 million for the quarter, up $73.9 million, or up 15.2%, from the same period in 2025.
- Solid waste pricing for the quarter was up 5.5% from the same period in 2025, driven by 5.9% collection price growth and 4.8% disposal price growth.
- Net loss was $(7.0) million for the quarter, as compared to net income of $10.0 million for the same period in 2025, impacted by an impairment charge described below. Adjusted Net Income, a non-GAAP measure, was $22.3 million for the quarter, down $(5.1) million from the same period in 2025.
- Adjusted EBITDA, a non-GAAP measure, was $133.5 million for the quarter, up $13.6 million, or up 11.4%, from the same period in 2025.
- Net cash provided by operating activities was $241.8 million for the year-to-date period, up $8.6 million, or up 3.7%, from the same period in 2025.
- Adjusted Free Cash Flow, a non-GAAP measure, was $111.1 million for the year-to-date period, down $(8.4) million, or down (7.0)%, from the same period in 2025.
- Acquired six businesses in the first nine months of 2026 with over $170 million in aggregate annualized revenues.
- Narrowed 2026 guidance for Adjusted EBITDA, reaffirmed guidance for Adjusted Free Cash Flow and raised guidance for revenues.
“We again delivered solid top-line revenue and Adjusted EBITDA growth in the third quarter with strong performance across most of our business,” said Ned Coletta, President and CEO of Casella Waste Systems, Inc. “Solid waste pricing was robust, up 5.9% in collection and up 4.6% at our landfills, along with 12.8% landfill volume growth. Where fully implemented, floating fuel fees continued to insulate our business from the impact of elevated and volatile fuel prices. We remain highly confident in our operating plans for this year, supported by strong fourth quarter performance visibility, and as such have narrowed our 2026 guidance on Adjusted EBITDA and maintained our Adjusted Free Cash Flow guidance, while raising our revenue guidance to reflect higher floating fuel fees.”
“During the third quarter in our Mid-Atlantic region, we moved aggressively to strengthen regional leadership and provide corporate support to accelerate operational initiatives, including route consolidation and efficiencies, rolling out floating fuel fees consistent with our companywide programs, and implementing price increases to offset cost inflation,” Coletta said. “Although our results in the Mid-Atlantic were slightly behind plan in the quarter, we have seen a definitive positive inflection point in the region entering the fourth quarter, with October Mid-Atlantic Adjusted EBITDA margins up approximately 150 basis points from August and up over 300 basis points year-over-year. While meaningful work remains, we expect these targeted actions to drive sustained regional performance gains through the remainder of the year and into 2027.”
Coletta added, “We continued to make significant progress on our multi-year G&A cost reduction and margin expansion objectives, completing the initial steps of our planned organizational transformation in late September and implementing credit card convenience fees throughout the quarter, with cost reduction benefits of both efforts expected to be reflected in the fourth quarter. We believe we are well positioned for strong growth in 2027 and a minimum of 300 basis points of Adjusted EBITDA margin expansion over the next three years.”
Q3 2026 Results
Revenues were $559.2 million for the quarter, up $73.9 million, or up 15.2%, from the same period in 2025, with revenue growth mainly driven by: the positive impact from acquisitions, including the rollover contribution from deals closed in prior periods; positive collection and disposal pricing; an increase in landfill volumes; and strong National Accounts growth in our Resource Solutions operating segment.
Operating income was $15.6 million for the quarter, down $(13.7) million from the same period in 2025, reflecting higher expenses including depreciation and amortization, an impairment charge related to our termination of the Granite State landfill development project, expenses related to acquisition activities and organizational transformation costs.
Net loss was $(7.0) million for the quarter, as compared to net income of $10.0 million for the same period in 2025, largely driven by the same factors impacting operating income in addition to higher interest expense, net, partially offset by the monetization of investment tax credits. Adjusted Net Income was $22.3 million for the quarter, down $(5.1) million, or down (18.7)%, from the same period in 2025.
Adjusted EBITDA was $133.5 million for the quarter, up $13.6 million, or up 11.4%, from the same period in 2025, driven by both acquisition contribution and organic growth.
Please refer to "Non-GAAP Performance Measures" included in "Unaudited Reconciliation of Certain Non-GAAP Measures" below for additional information and reconciliations of Adjusted Net Income, Adjusted EBITDA and other non-GAAP performance measures to their most directly comparable generally accepted accounting principles (“GAAP”) measures.
Net cash provided by operating activities was $241.8 million for the nine months ended September 30, 2026, up $8.6 million from the same period in 2025. Adjusted Free Cash Flow was $111.1 million for the nine months ended September 30, 2026, down $(8.4) million from the same period in 2025.
Please refer to "Non-GAAP Liquidity Measures" included in "Unaudited Reconciliation of Certain Non-GAAP Measures" below for additional information and reconciliation of Adjusted Free Cash Flow to its most directly comparable GAAP measure.
Fiscal Year 2026 Outlook
The Company updated guidance for the fiscal year ending December 31, 2026 (“fiscal year 2026”) for the following ranges:
- Revenues between $2.100 billion and $2.110 billion (raised from a range of $2.090 billion to $2.110 billion);
- Adjusted EBITDA between $475 million and $481 million (narrowed from between $473 million and $483 million); and
- Net loss between $(10) and $(4) million (lowered from a range of net income between $0 million and $6 million).
The Company reaffirmed guidance for fiscal year 2026 by estimating results in the following ranges:
- Net cash provided by operating activities between $370 million and $380 million; and
- Adjusted Free Cash Flow between $200 million and $210 million.
The guidance ranges do not include the impact of any acquisitions that have not been completed. Adjusted EBITDA and Adjusted Free Cash Flow related to fiscal year 2026 are described in the Unaudited Reconciliation of Fiscal Year 2026 Outlook Non-GAAP Measures section of this press release. Net loss and Net cash provided by operating activities are provided as the most directly comparable GAAP measures to Adjusted EBITDA and Adjusted Free Cash Flow, respectively, however these forward-looking estimates for fiscal year 2026 do not contemplate any unanticipated impacts.
Conference Call to Discuss Quarter
The Company will host a conference call to discuss these results on Tuesday, November 10, 2026 at 10:00 a.m. Eastern Time. Individuals interested in participating in the call should register for the call by clicking here to obtain a dial in number and unique passcode. Alternatively, upon registration, the website linked above provides an option for the conference provider to call the registrant's phone line, enabling participation on the call.
The call will also be webcast; to listen, participants should visit the Company’s website at http://ir.casella.com and follow the appropriate link to the webcast. A replay of the call will be available on the Company's website and accessible using the same link.
About Casella Waste Systems, Inc.
Casella Waste Systems, Inc., headquartered in Rutland, Vermont, provides resource management expertise and services to residential, commercial, municipal, institutional and industrial customers, primarily in the areas of solid waste collection and disposal, transfer, recycling and organics services in the eastern United States. For further information, investors may visit the Company’s website at http://www.casella.com.
Safe Harbor Statement
Certain matters discussed in this press release, including, but not limited to, the statements regarding our intentions, beliefs or current expectations concerning, among other things, our financial performance; financial condition; operations and services; prospects; growth; strategies; anticipated impacts from future or completed acquisitions; and guidance for fiscal year 2026, are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such by the context of the statements, including words such as “believe,” “expect,” “anticipate,” “plan,” “may,” “would,” “intend,” “estimate”, “projects,” “will,” “guidance” and other similar expressions, whether in the negative or affirmative. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which the Company operates and management’s beliefs and assumptions. The Company cannot guarantee that it will achieve the financial results, plans, intentions, expectations or guidance disclosed in the forward-looking statements made. Such forward-looking statements, and all phases of the Company's operations, involve a number of risks and uncertainties, any one or more of which could cause actual results to differ materially from those described in its forward-looking statements.
Such risks and uncertainties include or relate to, among other things, the following: the Company may be unable to adequately increase prices or drive operating efficiencies to adequately offset increased costs and inflationary pressures, including increased fuel prices, wages, and tariffs; it is difficult to determine the timing or future impact of a sustained economic slowdown that could negatively affect our operations and financial results; the increasing focus on per - and polyfluoroalkyl substances (“PFAS”) and other emerging contaminants, including the recent designation by the U.S. Environmental Protection Agency of two PFAS chemicals as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act, will likely lead to increased compliance and remediation costs and litigation risks; adverse weather conditions may negatively impact the Company's revenues and its operating margin; the Company may be unable to increase volumes at its landfills or improve its route profitability; the Company may be unable to reduce costs or increase pricing or volumes sufficiently to achieve estimated Adjusted EBITDA and other targets; landfill operations and permit status may be affected by factors outside the Company's control; the Company may be required to incur capital expenditures in excess of its estimates; the Company's insurance coverage and self-insurance reserves may be inadequate to cover all of its risk exposures; fluctuations in energy pricing or the commodity pricing of its recyclables may make it more difficult for the Company to predict its results of operations or meet its estimates; disruptions or limited access to domestic and global transportation or the imposition of tariffs could impact the Company's ability to sell recyclables into end markets; the Company may be unable to achieve its acquisition or development targets on favorable pricing or at all, including due to the failure to satisfy all closing conditions and to receive required regulatory approvals that may prevent closing of any announced transaction; the Company may not be able to successfully integrate and recognize the expected financial benefits from acquired businesses; and the Company may incur environmental charges or asset impairments in the future.
There are a number of other important risks and uncertainties that could cause the Company's actual results to differ materially from those indicated by such forward-looking statements. These additional risks and uncertainties include, without limitation, those detailed in Item 1A. “Risk Factors” in the Company's most recently filed Form 10-K and in other filings that the Company may make with the Securities and Exchange Commission in the future.
The Company undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
Investors:
Henry Baby, CFA
Vice President of Investor Relations & Finance
(802) 417-3841
Media:
Jeff Weld
Vice President of Communications
(802) 772-2234
http://www.casella.com
| CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per share data) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| Unaudited | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenues | $ | 559,231 | $ | 485,351 | $ | 1,560,307 | $ | 1,367,786 | |||||||
| Operating expenses: | |||||||||||||||
| Cost of operations | 374,577 | 315,262 | 1,048,451 | 903,783 | |||||||||||
| General and administration | 58,918 | 57,273 | 180,214 | 168,282 | |||||||||||
| Depreciation and amortization | 88,066 | 78,829 | 254,546 | 227,326 | |||||||||||
| Expense from acquisition activities | 6,318 | 4,618 | 18,909 | 16,610 | |||||||||||
| Landfill development impairment charge | 13,593 | — | 13,593 | — | |||||||||||
| Organics facility closure charge | 703 | — | 2,719 | — | |||||||||||
| Organizational transformation costs | 1,407 | — | 1,407 | — | |||||||||||
| 543,582 | 455,982 | 1,519,839 | 1,316,001 | ||||||||||||
| Operating income | 15,649 | 29,369 | 40,468 | 51,785 | |||||||||||
| Other expense (income): | |||||||||||||||
| Interest expense, net | 18,165 | 13,915 | 49,579 | 38,513 | |||||||||||
| Other income | (4,002 | ) | (436 | ) | (5,137 | ) | (1,370 | ) | |||||||
| Other expense, net | 14,163 | 13,479 | 44,442 | 37,143 | |||||||||||
| Income (loss) before income taxes | 1,486 | 15,890 | (3,974 | ) | 14,642 | ||||||||||
| Provision for income taxes | 8,507 | 5,906 | 4,816 | 4,260 | |||||||||||
| Net (loss) income | $ | (7,021 | ) | $ | 9,984 | $ | (8,790 | ) | $ | 10,382 | |||||
| Basic weighted average common shares outstanding | 63,642 | 63,492 | 63,600 | 63,450 | |||||||||||
| Basic (loss) earnings per common share | $ | (0.11 | ) | $ | 0.16 | $ | (0.14 | ) | $ | 0.16 | |||||
| Diluted weighted average common shares outstanding | 63,642 | 63,591 | 63,600 | 63,550 | |||||||||||
| Diluted (loss) earnings per common share | $ | (0.11 | ) | $ | 0.16 | $ | (0.14 | ) | $ | 0.16 | |||||
| CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) | |||||
| September 30, 2026 | December 31, 2025 | ||||
| (Unaudited) | |||||
| ASSETS | |||||
| CURRENT ASSETS: | |||||
| Cash and cash equivalents | $ | 11,741 | $ | 123,773 | |
| Accounts receivable, net of allowance for credit losses | 226,970 | 178,068 | |||
| Other current assets | 68,628 | 67,440 | |||
| Total current assets | 307,339 | 369,281 | |||
| Property and equipment, net of accumulated depreciation and amortization | 1,418,063 | 1,289,409 | |||
| Operating lease right-of-use assets | 107,032 | 105,252 | |||
| Goodwill | 1,389,497 | 1,120,056 | |||
| Intangible assets, net of accumulated amortization | 324,984 | 290,855 | |||
| Restricted cash and assets | 2,990 | 96,265 | |||
| Other non-current assets | 25,571 | 32,208 | |||
| Total assets | $ | 3,575,476 | $ | 3,303,326 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| CURRENT LIABILITIES: | |||||
| Current maturities of debt | $ | 25,391 | $ | 25,735 | |
| Current operating lease liabilities | 12,264 | 11,952 | |||
| Accounts payable | 111,726 | 102,468 | |||
| Contract liabilities | 42,405 | 45,153 | |||
| Current accrued final capping, closure and post-closure costs | 34,493 | 7,562 | |||
| Other accrued liabilities | 97,518 | 101,032 | |||
| Total current liabilities | 323,797 | 293,902 | |||
| Debt, less current portion | 1,356,393 | 1,128,927 | |||
| Operating lease liabilities, less current portion | 77,150 | 72,513 | |||
| Accrued final capping, closure and post-closure costs, less current portion | 176,617 | 185,160 | |||
| Other long-term liabilities | 62,426 | 54,115 | |||
| Total stockholders' equity | 1,579,093 | 1,568,709 | |||
| Total liabilities and stockholders' equity | $ | 3,575,476 | $ | 3,303,326 | |
| CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||||
| Nine Months Ended September 30, | |||||||
| 2026 | 2025 | ||||||
| Cash Flows from Operating Activities: | |||||||
| Net (loss) income | $ | (8,790 | ) | $ | 10,382 | ||
| Adjustments to reconcile Adjustments to reconcile net (loss) income to net cash provided by operating activities:: | |||||||
| Depreciation and amortization | 254,546 | 227,326 | |||||
| Interest accretion on landfill and environmental remediation liabilities | 12,058 | 11,105 | |||||
| Amortization of debt issuance costs | 2,235 | 2,277 | |||||
| Stock-based compensation | 9,503 | 11,647 | |||||
| Operating lease right-of-use assets expense | 19,364 | 16,385 | |||||
| Other items and charges, net | 13,931 | (150 | ) | ||||
| Deferred income taxes | (658 | ) | 1,076 | ||||
| Changes in assets and liabilities, net of effects of acquisitions and divestitures | (60,358 | ) | (46,835 | ) | |||
| Net cash provided by operating activities | 241,831 | 233,213 | |||||
| Cash Flows from Investing Activities: | |||||||
| Acquisitions, net of cash acquired | (440,060 | ) | (217,501 | ) | |||
| Additions to intangible assets | (469 | ) | — | ||||
| Additions to property and equipment | (200,475 | ) | (187,803 | ) | |||
| Proceeds from sale of property and equipment | 971 | 581 | |||||
| Net cash used in investing activities | (640,033 | ) | (404,723 | ) | |||
| Cash Flows from Financing Activities: | |||||||
| Proceeds from debt borrowings | 471,220 | 91,500 | |||||
| Principal payments on debt | (277,670 | ) | (108,408 | ) | |||
| Payments of debt issuance costs | (466 | ) | (2,232 | ) | |||
| Net cash provided by (used in) financing activities | 193,084 | (19,140 | ) | ||||
| Net decrease in cash, cash equivalents and restricted cash, including non-current | (205,118 | ) | (190,650 | ) | |||
| Cash, cash equivalents and restricted cash, including non-current, beginning of period | 216,859 | 383,303 | |||||
| Cash, cash equivalents and restricted cash, including non-current, end of period | $ | 11,741 | $ | 192,653 | |||
| Supplemental Disclosure of Cash Flow Information: | |||||||
| Cash interest payments | $ | 48,061 | $ | 42,835 | |||
| Cash income tax (refunds) payments, net | $ | (1,761 | ) | $ | 318 | ||
| Supplemental Disclosure of Non-Cash Activities: | |||||||
| Right-of-use assets obtained in exchange for finance lease obligations | $ | 32,319 | $ | 30,268 | |||
| Right-of-use assets obtained in exchange for operating lease obligations | $ | 15,119 | $ | 22,668 | |||
| CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED RECONCILIATION OF CERTAIN NON-GAAP MEASURES (In thousands) | |||||||
Non-GAAP Performance Measures
In addition to disclosing financial results prepared in accordance with GAAP, the Company also presents non-GAAP performance measures such as Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, Adjusted Operating Income, Adjusted Operating Income as a percentage of revenues, Adjusted Net Income and Adjusted Diluted Earnings Per Common Share that provide an understanding of operational performance because it considers them important supplemental measures of the Company's performance that are frequently used by securities analysts, investors and other interested parties in the evaluation of the Company's results. The Company also believes that identifying the impact of certain items as adjustments provides more transparency and comparability across periods. Management uses these non-GAAP performance measures to further understand its “core operating performance” and believes its “core operating performance” is helpful in understanding its ongoing performance in the ordinary course of operations. The Company believes that providing such non-GAAP performance measures to investors, in addition to corresponding income statement measures, affords investors the benefit of viewing the Company’s performance using the same financial metrics that the management team uses in making many key decisions and understanding how the core business and its results of operations has performed. The tables below set forth such performance measures on an adjusted basis to exclude such items:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net (loss) income | $ | (7,021 | ) | $ | 9,984 | $ | (8,790 | ) | $ | 10,382 | |||||
| Net (loss) income as a percentage of revenues | (1.3 | )% | 2.1 | % | (0.6 | )% | 0.8 | % | |||||||
| Provision for income taxes | 8,507 | 5,906 | 4,816 | 4,260 | |||||||||||
| Other income | (4,002 | ) | (436 | ) | (5,137 | ) | (1,370 | ) | |||||||
| Interest expense, net | 18,165 | 13,915 | 49,579 | 38,513 | |||||||||||
| Depreciation and landfill amortization | 66,828 | 59,849 | 192,902 | 169,764 | |||||||||||
| Amortization of intangibles (i) | 21,238 | 18,980 | 61,644 | 57,562 | |||||||||||
| Expense from acquisition activities (ii) | 6,318 | 4,618 | 18,909 | 16,610 | |||||||||||
| Landfill development impairment charge (iii) | 13,593 | — | 13,593 | — | |||||||||||
| Organics facility closure charge, net (iv) | 608 | — | 2,305 | — | |||||||||||
| Organizational transformation costs (v) | 1,407 | — | 1,407 | — | |||||||||||
| Depletion of landfill operating lease obligations | 3,793 | 3,358 | 10,497 | 8,947 | |||||||||||
| Interest accretion on landfill and environmental remediation liabilities | 4,037 | 3,679 | 12,058 | 11,105 | |||||||||||
| Adjusted EBITDA | $ | 133,471 | $ | 119,853 | $ | 353,783 | $ | 315,773 | |||||||
| Adjusted EBITDA as a percentage of revenues | 23.9 | % | 24.7 | % | 22.7 | % | 23.1 | % | |||||||
| Depreciation and landfill amortization | (66,828 | ) | (59,849 | ) | (192,902 | ) | (169,764 | ) | |||||||
| Depletion of landfill operating lease obligations | (3,793 | ) | (3,358 | ) | (10,497 | ) | (8,947 | ) | |||||||
| Interest accretion on landfill and environmental remediation liabilities | (4,037 | ) | (3,679 | ) | (12,058 | ) | (11,105 | ) | |||||||
| Adjusted Operating Income | $ | 58,813 | $ | 52,967 | $ | 138,326 | $ | 125,957 | |||||||
| Adjusted Operating Income as a percentage of revenues | 10.5 | % | 10.9 | % | 8.9 | % | 9.2 | % | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net (loss) income | $ | (7,021 | ) | $ | 9,984 | $ | (8,790 | ) | $ | 10,382 | |||||
| Amortization of intangibles (i) | 21,238 | 18,980 | 61,644 | 57,562 | |||||||||||
| Expense from acquisition activities (ii) | 6,318 | 4,618 | 18,909 | 16,610 | |||||||||||
| Landfill development impairment charge (iii) | 13,593 | — | 13,593 | — | |||||||||||
| Organics facility closure charge, net (iv) | 608 | — | 2,305 | — | |||||||||||
| Organizational transformation costs (v) | 1,407 | — | 1,407 | — | |||||||||||
| Investment tax credit monetization (vi) | (3,586 | ) | — | (3,586 | ) | — | |||||||||
| Tax effect (vii) | (10,251 | ) | (6,135 | ) | (24,472 | ) | (19,285 | ) | |||||||
| Adjusted Net Income | $ | 22,306 | $ | 27,447 | $ | 61,010 | $ | 65,269 | |||||||
| Diluted weighted average common shares outstanding | 63,642 | 63,591 | 63,600 | 63,550 | |||||||||||
| Dilutive effect of options and other stock awards | 106 | — | 90 | — | |||||||||||
| Adjusted Diluted Weighted Average Common Shares Outstanding | 63,748 | 63,591 | 63,690 | 63,550 | |||||||||||
| Diluted (loss) earnings per common share | $ | (0.11 | ) | $ | 0.16 | $ | (0.14 | ) | $ | 0.16 | |||||
| Amortization of intangibles (i) | 0.33 | 0.30 | 0.97 | 0.91 | |||||||||||
| Expense from acquisition activities (ii) | 0.10 | 0.07 | 0.30 | 0.26 | |||||||||||
| Landfill development impairment charge (iii) | 0.21 | — | 0.21 | — | |||||||||||
| Organics facility closure charge, net (iv) | 0.01 | — | 0.04 | — | |||||||||||
| Organizational transformation costs (v) | 0.02 | — | 0.02 | — | |||||||||||
| Investment tax credit monetization (vi) | (0.06 | ) | — | (0.06 | ) | — | |||||||||
| Tax effect (vii) | (0.15 | ) | (0.10 | ) | (0.38 | ) | (0.30 | ) | |||||||
| Adjusted Diluted Earnings Per Common Share | $ | 0.35 | $ | 0.43 | $ | 0.96 | $ | 1.03 | |||||||
(i) Amortization of intangibles is the add-back of non-cash amortization of acquired intangibles, including covenants not-to-compete, customer relationships and trade names.
(ii) Expense from acquisition activities is comprised primarily of legal, consulting, rebranding, information technology and other costs associated with the due diligence, acquisition and integration of acquired businesses.
(iii) Landfill development impairment charge is a write-off of deferred costs associated with the Granite State Landfill, LLC greenfield landfill project no longer deemed viable in light of the outcome of legal proceedings, the changes in legislation and the unsupportive political environment.
(iv) Organics facility closure charge, net are net expenses related to us ceasing operations at an organic residuals composting facility that we own in Maine related to a change in state law prohibiting land application of biosolids based recycled products. The charge consists of costs incurred, net of revenues, related to ceasing operations at the site, which we expect to continue to occur through final closure of the site.
(v) Organizational transformation costs is comprised of certain costs related to employee severance and other employee compensation associated with initiatives to optimize our organizational structure and business operations. We expect to incur additional expenses related to these initiatives, potentially including third-party consulting, employee related compensation, information technology, legal and other costs.
(vi) Investment tax credit monetization is the receipt of proceeds associated with the monetization of federal investment tax credits by a third-party that owns and operates a renewable natural gas facility at one of our landfills.
(vii) Tax effect represents the aggregate marginal tax impact of each adjustment calculated using an estimated average statutory rate. Tax effect presented for the periods ended September 30, 2025 has been updated to conform with the current period methodology.
Non-GAAP Liquidity Measures
In addition to disclosing financial results prepared in accordance with GAAP, the Company also presents non-GAAP liquidity measures, such as Adjusted Free Cash Flow, that provide an understanding of the Company's liquidity because it considers them important supplemental measures of its liquidity that are frequently used by securities analysts, investors and other interested parties in the evaluation of the Company's cash flow generation from its core operations that are then available to be deployed for strategic acquisitions, growth investments, development projects, unusual landfill closures, site improvement and remediation, and strengthening the Company’s balance sheet through paying down debt. The Company also believes that showing the impact of certain items as adjustments provides more transparency and comparability across periods. Management uses non-GAAP liquidity measures to understand the Company’s cash flow provided by operating activities after certain expenditures along with its consolidated net leverage and believes that these measures demonstrate the Company’s ability to execute on its strategic initiatives. The Company believes that providing such non-GAAP liquidity measures to investors, in addition to corresponding cash flow statement measures, affords investors the benefit of viewing the Company’s liquidity using the same financial metrics that the management team uses in making many key decisions and understanding how the core business and cash flow generation has performed. The table below, on an adjusted basis to exclude certain items, sets forth such liquidity measures:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net cash provided by operating activities | $ | 80,805 | $ | 93,565 | $ | 241,831 | $ | 233,213 | |||||||
| Capital expenditures | (78,187 | ) | (65,925 | ) | (200,475 | ) | (187,803 | ) | |||||||
| Proceeds from sale of property and equipment | 331 | 78 | 971 | 581 | |||||||||||
| Acquisition capital expenditures (i) | 17,671 | 14,153 | 38,281 | 54,139 | |||||||||||
| Cash outlays for acquisition expenses (ii) | 6,350 | 5,930 | 19,111 | 17,698 | |||||||||||
| McKean Landfill rail capital expenditures (iii) | 1,255 | 825 | 5,731 | 1,625 | |||||||||||
| Lehigh Valley, PA MRF construction (iv) | 4,606 | — | 4,606 | — | |||||||||||
| Cash outlays for organics facility closure, net (v) | 132 | — | 1,025 | — | |||||||||||
| Adjusted Free Cash Flow | $ | 32,963 | $ | 48,626 | $ | 111,081 | $ | 119,453 | |||||||
(i) Acquisition capital expenditures are acquisition-related capital expenditures that are necessary to transition and upgrade acquired assets to Company operating standards and to achieve strategic synergies associated with integrating newly acquired operations, which can be considered, together with acquisition purchase price, as part of the initial overall investment in an acquired business.
(ii) Cash outlays for acquisition expenses are cash outlays for transaction and integration costs relating to specific acquisition transactions and include legal, consulting, rebranding, information technology and other costs as part of the Company’s strategic growth initiative.
(iii) McKean Landfill rail capital expenditures are long-term infrastructure capital expenditures related to rail side development at the Company's landfill in Mount Jewett, Pennsylvania ("McKean Landfill"), which is different from the landfill construction investments in the normal course of operations.
(iv) Lehigh Valley, PA MRF construction represents amounts paid in advance in connection with the planned construction of a new material recycling facility (“MRF”) located in Lehigh Valley, Pennsylvania, which will incorporate advanced recycling technology.
(v) Cash outlays for organics facility closure, net are net cash outlays related to us ceasing operations at an organic residuals composting facility that we own in Maine related to a change in state law prohibiting land application of biosolids based recycled products. We expect to incur cash outlays through satisfaction of the closure requirements and the soil remediation process.
Non-GAAP financial measures are not in accordance with or an alternative for GAAP. Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, Adjusted Operating Income, Adjusted Operating Income as a percentage of revenues, Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, and Adjusted Free Cash Flow should not be considered in isolation from or as a substitute for financial information presented in accordance with GAAP, and may be different from Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, Adjusted Operating Income, Adjusted Operating Income as a percentage of revenues, Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, and Adjusted Free Cash Flow presented by other companies.
| CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED RECONCILIATION OF FISCAL YEAR 2026 OUTLOOK NON-GAAP MEASURES (In thousands) |
Following is a reconciliation of the Company's estimated Adjusted EBITDA(i) from estimated Net income for fiscal year 2026:
| (Estimated) Twelve Months Ending December 31, 2026 | |
| Net loss | $(10,000) - $(4,000) |
| Provision for income taxes | 3,000 - 7,000 |
| Other income | (5,000) |
| Interest expense, net | 67,000 |
| Expense from acquisition activities | 25,000 |
| Landfill development impairment charge | 14,000 |
| Organics facility closure charge, net | 3,000 |
| Organizational transformation costs | 2,000 |
| Depreciation and landfill amortization | 263,000 |
| Amortization of intangibles | 82,000 |
| Depletion of landfill operating lease obligations | 14,000 |
| Interest accretion on landfill and environmental remediation liabilities | 15,000 |
| Adjusted EBITDA | $475,000 - $481,000 |
Following is a reconciliation of the Company's estimated Adjusted Free Cash Flow(i) from estimated Net cash provided by operating activities for fiscal year 2026:
| (Estimated) Twelve Months Ending December 31, 2026 | |
| Net cash provided by operating activities | $370,000 - $380,000 |
| Capital expenditures | (265,000) |
| Proceeds from sale of property and equipment | 1,000 |
| Acquisition capital expenditures | 50,000 |
| Cash outlays for acquisition expenses | 25,000 |
| McKean Landfill rail capital expenditures | 5,000 |
| Lehigh Valley, PA MRF construction | 10,000 |
| Cash outlays for organics facility closure, net | 3,000 |
| Cash outlays for organizational transformation costs | 1,000 |
| Adjusted Free Cash Flow | $200,000 - $210,000 |
(i) See footnotes for Non-GAAP Performance Measures and Non-GAAP Liquidity Measures included in the Unaudited Reconciliation of Certain Non-GAAP Measures for further disclosure over the nature of the various adjustments to estimated Adjusted EBITDA and estimated Adjusted Free Cash Flow.
| CASELLA WASTE SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED SUPPLEMENTAL DATA TABLES (In thousands) |
Amounts of total revenues attributable to services provided for the three months ended September 30, 2026 and 2025 are as follows:
| Three Months Ended September 30, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| Gross Revenues | Intercompany Revenues | Third-Party Revenues | Gross Revenues (i) | Intercompany Revenues (i) | Third-Party Revenues | ||||||||||||||
| Collection | $ | 391,783 | $ | (30,123 | ) | $ | 361,660 | $ | 337,001 | $ | (22,953 | ) | $ | 314,048 | |||||
| Landfill | 67,259 | (35,801 | ) | 31,458 | 60,795 | (34,015 | ) | 26,780 | |||||||||||
| Transfer station | 101,283 | (49,686 | ) | 51,597 | 82,796 | (42,130 | ) | 40,666 | |||||||||||
| Transportation | 10,089 | (4,234 | ) | 5,855 | 10,120 | (4,121 | ) | 5,999 | |||||||||||
| Landfill gas-to-energy | 1,739 | — | 1,739 | 1,538 | — | 1,538 | |||||||||||||
| Processing | 4,108 | (1,078 | ) | 3,030 | 4,101 | (962 | ) | 3,139 | |||||||||||
| Solid waste | 576,261 | (120,922 | ) | 455,339 | 496,351 | (104,181 | ) | 392,170 | |||||||||||
| Processing (ii) | 57,288 | (5,937 | ) | 51,351 | 53,504 | (5,319 | ) | 48,185 | |||||||||||
| National Accounts (ii) | 52,639 | (98 | ) | 52,541 | 45,074 | (78 | ) | 44,996 | |||||||||||
| Resource Solutions | 109,927 | (6,035 | ) | 103,892 | 98,578 | (5,397 | ) | 93,181 | |||||||||||
| Total revenues | $ | 686,188 | $ | (126,957 | ) | $ | 559,231 | $ | 594,929 | $ | (109,578 | ) | $ | 485,351 | |||||
(i) Prior period amounts have been updated to correct an immaterial error by reclassifying certain intercompany amounts from contra-revenue to costs of operations.
(ii) In the three months ended March 31, 2026, we realigned a business unit related to organic materials brokerage operations within our Resource Solutions operating segment from the National Accounts service line to the processing service line. Amounts disclosed for the three months ended September 30, 2025 have been updated to conform to the current period presentation.
Components of consolidated revenues growth for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 are as follows:
| Amount | % of Related Business | |||||
| Solid waste operations: | ||||||
| Collection | $ | 18,385 | 5.9 | % | ||
| Disposal: | ||||||
| Landfill | 1,238 | 4.6 | % | |||
| Transfer station | 2,026 | 5.0 | % | |||
| Total disposal | 3,264 | 4.8 | % | |||
| Other (i) | 1 | — | % | |||
| Solid waste price | 21,650 | 5.5 | % | |||
| Collection | (6,528 | ) | (2.1 | )% | ||
| Disposal: | ||||||
| Landfill | 3,440 | 12.8 | % | |||
| Transfer station | (351 | ) | (0.9 | )% | ||
| Total disposal | 3,089 | 4.6 | % | |||
| Other (i) | (636 | ) | (6.0 | )% | ||
| Solid waste volume | (4,075 | ) | (1.0 | )% | ||
| Intercompany transfers to National Accounts | (2,123 | ) | ||||
| Surcharges and other fees | 9,679 | |||||
| Commodity price and volume | 266 | |||||
| Acquisitions | 37,772 | 9.6 | % | |||
| Total solid waste operations | 63,169 | 16.1 | % | |||
| Resource Solutions operations: | ||||||
| Processing | 1,752 | 3.6 | % | |||
| National Accounts | 2,447 | 5.4 | % | |||
| Resource Solutions price | 4,199 | 4.5 | % | |||
| Processing | (1,392 | ) | (2.9 | )% | ||
| National Accounts | 1,502 | 3.3 | % | |||
| Resource Solutions volume | 110 | 0.1 | % | |||
| Intercompany transfers from solid waste | 2,123 | |||||
| Surcharges and other fees | 1,508 | |||||
| Facility closure | (776 | ) | ||||
| Acquisitions | 3,547 | 3.8 | % | |||
| Total Resource Solutions operations | 10,711 | 11.5 | % | |||
| Total Company | $ | 73,880 | 15.2 | % | ||
(i) Includes transportation, landfill gas-to-energy and processing services for solid waste.
Components of capital expenditures(i) for the three and nine months ended September 30, 2026 and 2025 are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||
| Growth capital expenditures: | |||||||||||
| Acquisition capital expenditures | $ | 15,316 | $ | 11,597 | $ | 38,198 | $ | 50,256 | |||
| McKean Landfill rail capital expenditures | 1,255 | 825 | 5,731 | 1,625 | |||||||
| Other | 16,679 | 5,220 | 29,718 | 13,293 | |||||||
| Growth capital expenditures | 33,250 | 17,642 | 73,647 | 65,174 | |||||||
| Replacement capital expenditures: | |||||||||||
| Landfill development | 13,805 | 6,938 | 30,321 | 14,200 | |||||||
| Vehicles, machinery, equipment and containers | 24,989 | 29,992 | 77,044 | 80,164 | |||||||
| Facilities | 3,587 | 8,942 | 11,234 | 21,621 | |||||||
| Other | 2,556 | 2,411 | 8,229 | 6,644 | |||||||
| Replacement capital expenditures | 44,937 | 48,283 | 126,828 | 122,629 | |||||||
| Capital expenditures | $ | 78,187 | $ | 65,925 | $ | 200,475 | $ | 187,803 | |||
(i) The Company's capital expenditures are broadly defined as pertaining to either growth or replacement activities. Growth capital expenditures are defined as costs related to development projects, organic business growth, and the integration of newly acquired operations. Growth capital expenditures include costs related to the following: 1) acquisition capital expenditures that are necessary to transition and upgrade acquired assets to Company operating standards and to achieve strategic synergies associated with integrating newly acquired operations, which can be considered, together with acquisition purchase price, as part of the initial overall investment in an acquired business; 2) McKean Landfill rail capital expenditures, which is unique and different from landfill construction investments in the normal course of operations because the Company is investing in long-term infrastructure; and 3) development of landfill permit expansions, investment in infrastructure to increase throughput at transfer stations and recycling and other processing facilities, capital expenditures for new equipment, such as trucks, containers or compactors, to support new contracts or other organic business growth, and other development projects in support of our growth strategies. Replacement capital expenditures are defined as landfill cell construction costs not related to expansion airspace, costs for normal permit renewals, replacement costs for equipment and other capital expenditures due to age or obsolescence, and capital items not otherwise defined as growth capital expenditures.
