By the numbers
Q3 net income: $565.7M
Up 17.8% versus prior year, with a margin of 13.9%
Q3 adjusted EBITDA: $1.3B
Up 13.8% year over year, with a record margin of 32%
- Overall results: Republic Services reported strong pricing in the third quarter, with financials pacing in line with previous guidance and ahead of some analysts’ expectations. The company is expecting to be on the high end of its full-year guidance for adjusted earnings before interest, depreciation and amortization, and the low end of its guidance for revenue. “We continue to be well positioned to capture new opportunities and create long-term value,” CEO Jon Vander Ark said on the company’s earnings call Tuesday.
- Volume: Total volumes declined by 1.2% year over year. Executives attributed that decline partially to continued softness in the home construction market and special waste volumes, the latter of which was down 1.8% year over year in Q3. They expect business to improve slightly beginning in the fourth quarter as interest rates come down and the election is decided, which they said tends to lead to project delays ahead of time.
- Pricing: Core price increased revenue by 6.2%. The company continued to price ahead of inflation, but expects the rate of inflation to step down into 2025, potentially impacting pricing. Vander Ark said he expected pricing to continue to lead margin expansion moving forward.
- Environmental solutions: Revenue in this segment was up by an estimated $60 million, largely due to rollover contributions from prior acquisitions. Vander Ark said the company would continue to “test the bounds of customer willingness to pay,” which overall had led to volumes being more flat, but said he preferred this trade-off because pricing “exceeded our expectations.”
- Recycling: Republic reported commodity prices for the quarter were up $65 per ton year over year, for an average of $177. That number is currently at about $160, CFO Brian DelGhiaccio said, due to weakened OCC prices. Executives reported better-than-expected pricing for flake product from the company’s Las Vegas Polymer Center, which opened earlier this year. They also said construction at the company’s Indianapolis Polymer Center is continuing on schedule, with earnings contributions expected in the second half of 2025.
- RNG: Republic completed four landfill-gas-to-renewable-natural-gas facilities this year, including two in Q3, and expects to complete four more by the end of 2024.
- EVs: The company has rolled out 28 electric collection vehicles so far this year and plans to meet its goal to roll out 50 EVs in its fleet by the end of the year. It currently has 18 facilities with commercial scale charging infrastructure.
- M&A: Republic has invested about $104 million in acquisitions so far this year, and Vander Ark said the company’s pipeline “remains supportive of continued activity in both recycling and waste and environmental services” acquisitions. The company expects to close an additional $200 million worth acquisitions by the end of the year.
