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CLEAN HARBORS INC (CLH)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered resilient results despite January weather: revenue $1.43B (+4% YoY), diluted EPS $1.09 (vs $1.29 YoY), and adjusted EBITDA $234.9M (+2% YoY); ES segment grew revenue 3% and adjusted EBITDA 4%, while SKSS revenue rose 9% with disciplined cost actions and CFO pricing .
  • Versus S&P Global consensus, CLH posted a slight revenue miss but EPS and adjusted EBITDA beats: revenue $1.432B vs $1.441B*, EPS $1.09 vs $1.052*, adjusted EBITDA $234.9M vs $232.6M*; mix and price in Technical Services and Field Services growth offset SKSS commodity headwinds .
  • Guidance reiterated: FY25 adjusted EBITDA $1.15–$1.21B (midpoint $1.18B), adjusted free cash flow $430–$490M (midpoint $460M); Q2 2025 adjusted EBITDA guided +1–3% YoY, with ES +3–5% and lower Corporate expense offsetting SKSS decline .
  • Strategic catalysts: Kimball incinerator ramp (5k tons processed in Q1; 28k+ tons goal for 2025), strong PFAS pipeline with EPA/DoD-supported incineration study expected soon, ongoing HEPACO integration expanding Field Services reach, and CFO pricing doubling used-oil collection charges while maintaining volumes .

What Went Well and What Went Wrong

What Went Well

  • ES delivered growth and price/mix strength: incineration utilization 88% (ex-Kimball) vs 79% YoY and mix-adjusted incineration pricing up >5%; Field Services revenue +32% YoY on HEPACO; SKES +5% revenue within ES .
  • SKSS outperformed internal expectations by aggressively reducing collection costs; segment revenue +9% YoY aided by Noble Oil and CFO pricing shifts, with Q1 adjusted EBITDA of $28.3M above February guidance commentary .
  • Safety performance a standout: TRIR 0.46, the best quarterly safety result in company history, reinforcing operational execution and culture .

Management quotes:

  • “We began 2025 with a solid, first-quarter performance… demand trends for our disposal and recycling assets were very strong… TRIR of 0.46.” — Co-CEO Mike Battles .
  • “Incineration utilization… was an impressive 88% vs. 79%… Average incineration price rose more than 5%…” — Co-CEO Eric Gerstenberg .
  • “We successfully doubled the average price per gallon we are charging for the collection of used oil…” — Co-CEO Michael Battles .

What Went Wrong

  • Weather-driven disruption in January: management quantified $10–$12M of lost EBITDA, with some volumes not recoverable (customer shutdowns, production impacts) .
  • Industrial Services headwinds persisted: revenue down ~10% YoY as refinery customers deferred spending/maintenance; recovery expected to be back-half weighted .
  • SKSS adjusted EBITDA margin down YoY on weaker base oil pricing (commodity exposure remains a risk), though actions offset the pressure and inventories now carry lower costs to help Q2 .

Financial Results

Consolidated Results vs Prior Periods

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$1.529 $1.431 $1.432
Diluted EPS ($)$2.12 $1.55 $1.09
Adjusted EBITDA ($USD Millions)$301.8 $257.2 $234.9
Adjusted EBITDA Margin (%)19.7% 18.0% 16.4%
Income from Operations ($USD Millions)$192.3 $137.0 $111.6

Results vs S&P Global Consensus (Q1 2025)

MetricConsensus*ActualSurprise
Revenue ($USD Billions)$1.441*$1.432 -$0.009B (miss)
Diluted EPS ($)$1.052*$1.09 +$0.04 (beat)
Adjusted EBITDA ($USD Millions)$232.6*$234.9 +$2.3M (beat)

Values marked with * retrieved from S&P Global.

Segment Breakdown

MetricQ3 2024Q4 2024Q1 2025
Environmental Services Revenue ($USD Millions, third-party)$1,287.7 $1,214.1 $1,207.0
SK Sustainability Solutions Revenue ($USD Millions, third-party)$241.7 $216.9 $224.8
ES Adjusted EBITDA ($USD Millions)$332.5 $310.6 $274.6
SKSS Adjusted EBITDA ($USD Millions)$41.2 $24.6 $28.3
Corporate Adjusted EBITDA ($USD Millions)-$71.9 -$78.0 -$68.0

KPIs and Operating Metrics

KPIQ3 2024Q4 2024Q1 2025
Incineration Utilization (%)89% 94% 88% (ex-Kimball)
Incineration Pricing YoY (%)+6% —>+5%
Parts Wash Services (#)——~245,000
Used Oil Collected (mm gal)——58 vs 55 YoY
Kimball Tons Processed (Q1)——~5,000; 28,000+ goal FY25
TRIR0.69 YTD through Sept surpassed 2024 goal 0.46 (record)
Share Repurchases——~260k shares; $55M spend
Net Debt/EBITDA——~2.1x
SG&A as % of Revenue——12.8%
Depreciation & Amortization ($M)$100.1 $105.3 $112.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($B)FY 2025$1.15–$1.21 (mid $1.18) $1.15–$1.21 (mid $1.18) Maintained
Adjusted Free Cash Flow ($M)FY 2025$430–$490 (mid $460) $430–$490 (mid $460) Maintained
Adjusted EBITDA YoY Growth (%)Q2 2025—+1–3% YoY consolidated; ES +3–5%; Corporate lower expense; SKSS down YoY New detail for Q2
ES Adjusted EBITDA Growth (%)FY 2025+5–8% at midpoint vs 2024 +5–8% at midpoint vs 2024 Maintained
SKSS Adjusted EBITDA ($M)FY 2025~$140 at midpoint ~$140 at midpoint Maintained
Corporate Adjusted EBITDA ($M)FY 2025Negative adj. EBITDA up 3–7% YoY Negative adj. EBITDA up 3–7% YoY Maintained
SG&A (% of revenue)FY 2025Mid-12% Mid-12% Maintained
Depreciation & Amortization ($M)FY 2025$440–$450 $440–$450 Maintained
Net CapEx excl. Phoenix ($M)FY 2025$345–$375 $345–$375 Maintained
Phoenix Hub Investment ($M)Q2 2025$15 timing in Q2 $15 in Q2 (site purchased early April) Timing confirmed

Earnings Call Themes & Trends

TopicQ3 2024 (Oct-30)Q4 2024 (Feb-19)Q1 2025 (Apr-30)Trend
PFAS regulatory momentumTotal PFAS Solution introduced; favorable regs outlook Healthy PFAS pipeline into 2025 EPA naming PFAS lead, frequent guidance updates; EPA/DoD incineration study expected in coming months Strengthening regulatory tailwind
Incineration capacity & pricingUtilization 89%; pricing +6% Utilization 94%; Kimball commercial launch 88% utilization (ex-Kimball); pricing >+5%; Kimball 5k tons Q1; 28k+ target Elevated utilization; price resilience; new capacity ramp
Industrial Services/refineryDeferred work; weakness in refinery vertical Return to growth expected 2025 -10% revenue YoY; 150+ turnarounds planned; back-half weighted recovery Near-term soft; 2H recovery setup
SKSS/base oil & CFO pricingSofter demand/pricing; improved YoY EBITDA Shift to CFO; cost cutting CFO charges doubled; inventories at lower cost; Q2 profitability improvement expected Stabilizing via pricing/cost actions
Tariffs/macro——Price actions to offset anticipated tariff costs; demand intact; reshoring supportive Managed risk; pricing lever
Safety cultureTRIR 0.69 YTD Surpassed 2024 goal TRIR 0.46 record Continuous improvement

Management Commentary

  • “Our overall Q1 results finished ahead of expectations… ES segment began the year with an encouraging first quarter… SKSS outperformed our guidance due to better pricing of used oil collection services.” — Co-CEO Eric Gerstenberg .
  • “We have enacted a nominal price increase to offset higher costs we expect for our vehicle fleet, chemicals and other supplies… committed to further adjusting pricing and reducing our cost structure to offset any additional inflation that may come as a result of tariffs.” — Co-CEO Eric Gerstenberg .
  • “In the quarter, we gathered 58 million gallons of waste oil… we have successfully doubled the average price per gallon we are charging for the collection of used oil…” — Co-CEO Michael Battles .
  • “Kimball is now open and running well… Baltimore expansion continues… new site in Phoenix closed in April… opened 10 additional field service branches in Q1.” — Co-CEO Michael Battles .
  • “Cash and short-term marketable securities approached $600 million… net debt-to-EBITDA ~2.1x… Moody’s upgraded our debt rating.” — CFO Eric Dugas .

Q&A Highlights

  • Weather impact: ~$10–$12M lost EBITDA in January; March strength recaptured momentum; some volumes are unrecoverable when customers are shut down .
  • Q2 guide specifics: Excludes outsized ER events; ES +3–5%; >150 turnarounds planned with stronger 2H; cautious SKSS given commodity exposure .
  • PFAS trajectory: Strong pipeline; EPA strengthening framework; incineration study results expected in Q2 supporting high-temperature incineration efficacy .
  • SKSS strategy: CFO pricing doubled; lower-cost inventories support Q2 margin; industry following CFO strategy; volumes maintained despite pricing shift .
  • Kimball ramp and captives: Running ahead of El Dorado ramp; not relying on captive closures in base case; captive closure discussions ongoing (upside to models) .

Estimates Context

  • Q1 2025: EPS beat and adjusted EBITDA beat vs S&P Global consensus, revenue modest miss. Drivers: ES price/mix, high incineration utilization, Field Services strength; SKSS offset commodity pressure via CFO pricing and cost actions .
  • Consensus may need to reflect: resilience in ES price/mix, tariff cost pass-through, and Kimball’s ramp; SKSS outlook cautious but stabilizing with CFO. FY25 midpoint unchanged suggests Street models can maintain EBITDA but consider mix shifts toward ES .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • ES fundamentals remain robust: incineration utilization and pricing increased, with additional Kimball capacity ramping; expect ES to drive FY25 growth and margin resilience .
  • SKSS stabilization is progressing: CFO pricing doubled and volumes held; lower-cost inventories support Q2; segment still exposed to base oil volatility—model cautiously .
  • Weather headwinds are transitory; backlog and logistics support catch-up in Q2/Q3; Q2 guidance prudently excludes outsized ERs—watch ER cadence and turnaround execution .
  • PFAS regulatory momentum and EPA/DoD study are potential positive catalysts for disposal volumes and incineration throughput; monitor publication timing .
  • Capital allocation remains flexible: strong cash, low leverage (~2.1x), ongoing buybacks ($55M in Q1), selective M&A, and targeted growth capex (Phoenix) .
  • Guidance reaffirmation signals confidence: FY25 adjusted EBITDA $1.15–$1.21B, adjusted FCF $430–$490M; near-term Q2 +1–3% EBITDA growth despite SKSS decline .
  • Stock narrative hinges on execution: Kimball ramp, PFAS tailwind, ES project pipeline and turnaround activity vs. SKSS commodity pricing—position sizing should reflect this mix and potential upside from regulatory catalysts .