Clean Harbors (NYSE:CLH) Q4 2025 Earnings call February 18, 2026 09:00 AM ET Company ParticipantsAdam Bubes - VP of Equity ResearchEric Dugas - EVP and CFOEric Gerstenberg - Co-CEOLarry Solow - PartnerMichael McDonald - General CounselMike Battles - Co-CEOTobey Sommer - Managing DirectorTyler Brown - Financial AdvisorConference Call ParticipantsBryan Burgmeier - Equity Research AnalystDavid Manthey - Senior Research AnalystJames Schumm - Senior AnalystNoah Kaye - Senior Research AnalystNone - AnalystOperato ...

Clean Harbors (NYSE:CLH) Q4 2025 Earnings call February 18, 2026 09:00 AM ET Company ParticipantsAdam Bubes - VP of Equity ResearchEric Dugas - EVP and CFOEric Gerstenberg - Co-CEOLarry Solow - PartnerMichael McDonald - General CounselMike Battles - Co-CEOTobey Sommer - Managing DirectorTyler Brown - Financial AdvisorConference Call ParticipantsBryan Burgmeier - Equity Research AnalystDavid Manthey - Senior Research AnalystJames Schumm - Senior AnalystNoah Kaye - Senior Research AnalystNone - AnalystOperato ...

Financial Data and Key Metrics Changes - The company reported record revenues exceeding $6 billion for the first time in its history, with a 5% increase in adjusted EBITDA for 2025 [6][19] - Q4 revenue increased by 5% to $1.5 billion, with adjusted EBITDA rising 8% to $279 million, marking the highest growth rates seen in fiscal 2025 [20][24] - The adjusted EBITDA margin improved by 60 basis points year-over-year to 18.6% for Q4, and by 40 basis points for the full year [20][21] Business Line Data and Key Metrics Changes - The Environmental Services (ES) segment achieved a 6% growth in adjusted EBITDA, with a 60 basis point increase in its adjusted EBITDA margin [6][19] - Technical Services revenue rose by 8%, while Safety-Kleen Environmental Services revenue grew by 7%, driven by pricing and higher volumes [7] - Field Services revenue grew by 13% in Q4, significantly aided by large-scale emergency response projects [8] Market Data and Key Metrics Changes - The company handled nearly 22,000 emergency response events in 2025, reflecting a 5% increase from the previous year [60][61] - Incineration utilization, excluding the new Kimball Incinerator, was 89% for the full year, up from 88% in 2024 [8] - The PFAS business is expected to grow by 20% in 2026, supported by regulatory developments and increased demand [10][29] Company Strategy and Development Direction - The company plans to continue expanding its PFAS services and has secured a three-year, $110 million contract for PFAS water filtration work [10] - A purchase agreement to acquire environmental businesses from Depot Connect International for approximately $130 million is expected to generate annual revenue of about $40 million [14][15] - The company is focusing on internal investments, including a $50 million expansion of its vacuum truck fleet to capitalize on growth opportunities [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting continued growth in revenue and adjusted EBITDA, driven by strong performance in core hazardous waste collection businesses [18][29] - The outlook for 2026 is based on modest economic assumptions, with potential upside from ongoing projects and market conditions [18][29] - Management highlighted the importance of maintaining a balanced view on growth expectations, considering potential market fluctuations [77] Other Important Information - The company achieved a record $509 million in annual adjusted free cash flow, representing nearly 44% of its 2025 adjusted EBITDA [24] - The net debt to EBITDA ratio improved to approximately 1.8 times, the lowest leverage in nearly 15 years [23] - Share repurchases totaled $133 million in Q4, with a total of $250 million for the year, reflecting the company's commitment to returning value to shareholders [25][17] Q&A Session Summary Question: Update on captive market and incineration pricing trends - Management indicated active discussions regarding captive closures and expects to drive incineration pricing improvements into the mid to upper single digits [35][37] Question: Confidence in industrial services growth - Management noted positive indicators from customers regarding turnaround needs, but maintained a conservative outlook for 2026 [39][40] Question: Insights on vacuum truck and field investments - The company aims to build internal capacity to meet organic growth demands, reducing reliance on subcontracting [44][46] Question: M&A pipeline and opportunities - Management confirmed ongoing interest in environmental services acquisitions, with a focus on facilities similar to the DCI acquisition [52] Question: Drivers of Safety-Kleen EBITDA expectations - Management acknowledged challenges in base oil pricing but expects improvements throughout the year [53][54] Question: Emergency response work quantification - The company completed over 22,000 emergency response events in 2025, with expectations for continued growth in this area [60][61]

Clean Harbors (CLH) came out with quarterly earnings of $1.62 per share, beating the Zacks Consensus Estimate of $1.59 per share. This compares to earnings of $1.55 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +1.76%. A quarter ago, it was expected that this environmental services company would post earnings of $2.37 per share when it actually produced earnings of $2.21, delivering a surprise of -6.75%.Over the last four qu ...

© 2025 CLEAN HARBORS Forward Looking Statements and GAAP Disclaimer Fourth-Quarter and Full-Year 2025 Investor Review February 18, 2026 These slides contain (and the accompanying oral discussion will contain) forward-looking statements, which are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "seeks," "will," "should," "estimates," "projects," "may," "likely," "potential," "outlook" or similar expressions. Such statements may include, but are not limi ...

Financial Performance - Q4 2025 revenues increased by 5% to $1.50 billion, compared to $1.43 billion in Q4 2024[4] - Full-year 2025 revenues reached a record $6.03 billion, up 2% from $5.89 billion in 2024[8] - Q4 net income was $86.6 million, or $1.62 per diluted share, compared to $84.0 million, or $1.55 per diluted share in Q4 2024[6] - Full-year adjusted EBITDA was $1.17 billion, a 5% increase from $1.12 billion in 2024[9] - Net income for the twelve months ended December 31, 2025, was $390.97 million, compared to $402.30 million in 2024[31] - Basic earnings per share for the twelve months ended December 31, 2025, was $7.31, slightly down from $7.46 in 2024[31] - Net income for the year ended December 31, 2025, was $390.974 million, a decrease from $402.299 million in 2024, representing a decline of approximately 2.5%[35] - Total revenue for the year ended December 31, 2025, reached $6.031 billion, an increase of 2.4% from $5.890 billion in 2024[37] Cash Flow and Investments - The company generated record adjusted free cash flow of $509.3 million in 2025, compared to $357.9 million in 2024[9] - Cash flows from operating activities increased to $866.725 million in 2025, compared to $777.771 million in 2024, marking an increase of 11.4%[35] - Cash and cash equivalents at the end of 2025 were $826.315 million, up from $687.192 million at the end of 2024, indicating a growth of 20.3%[35] - The company reported a net cash used in investing activities of $425.786 million in 2025, a decrease from $903.674 million in 2024, indicating improved cash management[35] Future Projections - For full-year 2026, Clean Harbors expects adjusted EBITDA in the range of $1.20 billion to $1.26 billion, with a midpoint of $1.23 billion[17] - Projected GAAP net income for the year ending December 31, 2026, is estimated to be between $410 million and $461 million[22] - Projected Adjusted EBITDA for the same period is expected to range from $1,200 million to $1,260 million[22] - Projected net cash from operating activities for the year ending December 31, 2026, is anticipated to be between $820 million and $940 million[24] - Projected adjusted free cash flow for the same period is estimated to be between $480 million and $540 million[24] Shareholder Actions - Clean Harbors announced a $350 million expansion of its share repurchase program, following a $250 million repurchase in 2025[12][13] - The company repurchased $250.002 million in common stock during the year, significantly higher than $55.178 million in 2024[35] Asset and Equity Changes - Total assets as of December 31, 2025, increased to $7,624.06 million from $7,377.28 million in 2024[33] - Total stockholders' equity as of December 31, 2025, was $2,745.66 million, up from $2,573.53 million in 2024[33] Segment Performance - Adjusted EBITDA for Environmental Services segment for the year ended December 31, 2025, was $1.344 billion, up from $1.267 billion in 2024, reflecting a growth of 6.1%[37] - Environmental Services revenue for the three months ended December 31, 2025, was $1.291 billion, compared to $1.214 billion in the same period of 2024, an increase of 6.3%[37] - Safety-Kleen Sustainability Solutions revenue for the year ended December 31, 2025, was $837.361 million, down from $884.798 million in 2024, a decrease of 5.3%[37] Strategic Initiatives - An agreement was signed to acquire environmental businesses from Depot Connect International for approximately $130 million, expected to generate $40 million in revenue annually[14] - A strategic investment of $50 million will be made to expand the vacuum truck fleet over the next two years[16]

Core Insights - Clean Harbors (CLH) is expected to report quarterly earnings of $1.61 per share, reflecting a year-over-year increase of 3.9% [1] - Anticipated revenues for the quarter are projected at $1.46 billion, which represents a 1.7% increase compared to the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' projections [1] Revenue Estimates - The consensus estimate for 'Revenue- Direct Revenues- Safety-Kleen Sustainability Solutions' is $201.28 million, showing a decrease of 2% from the prior-year quarter [4] - Analysts project 'Revenue- Direct Revenues- Environmental Services' to reach $1.24 billion, indicating a year-over-year increase of 1.4% [4] EBITDA Projections - 'Adjusted EBITDA- Safety-Kleen Sustainability Solutions' is expected to be $31.17 million, up from $24.60 million in the previous year [5] - The consensus for 'Adjusted EBITDA- Environmental Services' is projected at $320.60 million, compared to $310.57 million a year ago [5] Stock Performance - Over the past month, Clean Harbors shares have remained unchanged, while the Zacks S&P 500 composite has decreased by 2% [5] - Clean Harbors holds a Zacks Rank 3 (Hold), suggesting that its performance is likely to align with the overall market in the near term [5]

Core Insights - Clean Harbors Inc. (CLH) shares have increased by 7.1% over the past month, outperforming the industry's slight rise, with fourth-quarter 2025 earnings expected to grow by 3.8% year over year [1][9] Group 1: Revenue Growth and Market Demand - CLH's revenue growth is fueled by increasing demand for environmental compliance and waste management solutions from businesses, particularly in manufacturing, healthcare, and energy sectors [2] - The company benefits from long-term service contracts due to its expertise in hazardous waste disposal and environmental cleanup [2] Group 2: Competitive Edge and Innovations - Clean Harbors plans to construct a state-of-the-art process plant using a solvent de-asphalting process combined with existing hydro-treating capabilities, which is expected to enhance its competitive position [3] Group 3: Financial Health and Shareholder Value - The company's current ratio at the end of Q3 2025 was 2.44, significantly higher than the industry average of 0.98, indicating strong liquidity and the ability to meet short-term obligations [4] - CLH has consistently returned value to shareholders through share repurchases, totaling $55.2 million in 2024, $51.1 million in 2023, and $50.2 million in 2022, reflecting confidence in its business [5]

Core Insights - Clean Harbors is currently valued at $257 per share with a P/E ratio of 35.6, significantly higher than typical industrial stocks, indicating market expectations of future growth beyond the 1.3% quarterly revenue growth reported in Q3 2025 [1] PFAS Catalyst - Clean Harbors secured a $110 million contract for PFAS water filtration at Joint Base Pearl Harbor-Hickam, showcasing its comprehensive PFAS solution that includes lab analytics, water filtration, site remediation, and high-temperature incineration disposal [2] - CEO Eric Gerstenberg highlighted the effectiveness of the company's high-temperature incinerators in safely destroying PFAS at a cost-effective scale, supported by an EPA study confirming commercial-scale destruction capabilities [3] - Management anticipates PFAS revenue to reach $100-120 million in 2025, reflecting a year-over-year growth of 20-25%, with a quarterly pipeline growth of 15-20% [3] Infrastructure Moat - Clean Harbors has $2.74 billion in property, plant, and equipment, with 36% of total assets invested in landfills, incinerators, treatment facilities, and transfer stations [4] - The incineration utilization rate reached 92% in Q3 2025, up from 89% the previous year, indicating strong pricing power due to near-capacity operations and mid-single-digit pricing growth [4] Financial Performance - The Environmental Services segment has achieved 14 consecutive quarters of year-over-year margin expansion, with an adjusted EBITDA margin of 20.7% in Q3, and management aims for margins to reach 30% [5] - Despite these strengths, Clean Harbors missed Q3 estimates by 6.8% on EPS and 1.9% on revenue, with Industrial Services revenue declining by 4% and Field Services down 11% due to deferred maintenance and lack of emergency response projects [6] Future Outlook - Management does not expect a significant recovery in Industrial Services until the spring 2026 turnaround season, and insider selling of shares raises concerns about confidence in the near-term outlook [7] - The company is investing $210-220 million in a new SDA unit, targeting $30-40 million in annual EBITDA by 2028, indicating a commitment to vertical integration [8] - The high P/E ratio of 35.6 suggests that the market is pricing in near-perfection, with the valuation dependent on the realization of PFAS regulatory tailwinds and recovery in Industrial Services [9]

Core Insights - Clean Harbors is recognized as a leading provider of environmental, industrial, and hazardous waste management services across North America, showcasing a strong track record and a favorable long-term growth outlook [3]. Company Overview - The presentation format includes a 10 to 15-minute overview from Clean Harbors, followed by a Q&A session moderated by the research analyst [2]. - The management team present includes Eric Dugas, Executive Vice President and CFO, and Jim Buckley, Senior Vice President of Investor Relations [3].