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CLEAN HARBORS INC (CLH)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was operationally solid in Environmental Services (ES) with record Q2 Adjusted EBITDA margin (21.7%) and strong incineration metrics, while consolidated revenue was flat year-on-year; Clean Harbors reiterated full-year Adjusted EBITDA and adjusted free cash flow guidance, signaling confidence into 2H25 .
  • Against S&P Global consensus, revenue and EPS were modest misses (Rev: $1.55B vs $1.59B*, EPS: $2.36 vs $2.39*), reflecting softness in SKSS and lower large emergency response comps; margin execution and ES strength were the offsetting positives . Values retrieved from S&P Global.*
  • Management highlighted tailwinds from reshoring, PFAS remediation, and the Kimball incinerator ramp (met Q2 volume target), and guided Q3 Adjusted EBITDA growth of 9-12% YoY; full-year midpoints maintained ($1.18B Adj. EBITDA, $460M Adj. FCF) .
  • Likely stock reaction catalysts: visible ES margin expansion durability, PFAS regulatory clarity, and progressive lift from Kimball and Phoenix hub investments; watch for SKSS execution on charge-for-oil and inventory cost tailwinds into 2H25 .

What Went Well and What Went Wrong

  • What Went Well

    • ES pricing and throughput drove another quarter of margin expansion; consolidated Adjusted EBITDA margin rose 60 bps to 21.7% with “outstanding” incineration utilization (89% ex-Kimball) and 7% mix-adjusted incineration price increase .
    • Kimball ramp on track; unit hit its Q2 volume target and is expected to deliver incremental network EBITDA as utilization broadens to more waste types in 2H25 .
    • Safety performance hit a company best: TRIR 0.40 in Q2 (0.45 in 1H25), reinforcing operational discipline and cost benefits, per management .

  • What Went Wrong

    • Consolidated revenue was flat YoY; SKSS revenue was down vs prior year amid weak base oil pricing, though SKSS EBITDA outperformed management’s expectations due to CFO pricing and cost controls .
    • Lower large emergency response activity year-on-year weighed on ES top line; management cited ~$24M of ER in Q2’24 vs ~$10M this quarter, although base business margins improved .
    • Depreciation and amortization rose with Kimball and higher landfill volumes, modestly pressuring income from operations vs last year (Q2 op income $210.3M vs $215.5M) .

Financial Results

Overall results and estimate context

MetricQ4 2024Q1 2025Q2 2025Q2 2025 Consensus*Notes
Revenue ($USD Billions)$1.43 $1.43 $1.55 $1.59*Q2 revenue flat YoY per company
Diluted EPS ($)$1.55 $1.09 $2.36 $2.39*EPS down modestly YoY
Adjusted EBITDA ($USD Millions)$257.2 $234.9 $336.2 —Record Q2 Adj. EBITDA; margin +60 bps to 21.7%
Adjusted EBITDA Margin (%)18.0% 16.4% 21.7% —13th consecutive ES segment margin improvement

Values retrieved from S&P Global.*

Segment breakdown (Q2 YoY)

SegmentQ2 2024 Revenue ($MM)Q2 2025 Revenue ($MM)Q2 2024 Adj. EBITDA ($MM)Q2 2025 Adj. EBITDA ($MM)
Environmental Services (ES)$1,297.3 $1,330.1 $359.9 $376.2
Safety-Kleen Sustainability Solutions (SKSS)$255.3 $219.7 $51.5 $38.3
Corporate$0.1 $0.1 $(83.6) $(78.3)
Total$1,552.7 $1,549.9 $327.8 $336.2

KPIs and operating metrics

KPIQ1 2025Q2 2025YoY/Context
Incineration utilization (ex-Kimball)88% 89% High utilization despite fewer large ERs
Avg incineration price (mix-adjusted)>+5% +7% Ongoing pricing power
Waste oil collected (gallons)58M 64M +11% seq; supports SKSS production
Total Recordable Incident Rate (TRIR)0.46 0.40 (YTD 0.45) Best quarterly safety result
Large ER revenue (indicative)—~$10M vs ~$24M in Q2’24 Lighter ER mix; base margins improved

Non-GAAP context: Adjusted EBITDA and adjusted free cash flow are non-GAAP; reconciliations provided by the company .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAFY 2025$1.15B–$1.21B; midpoint $1.18B $1.16B–$1.20B; midpoint $1.18B Maintained midpoint
Adjusted Free Cash FlowFY 2025$430M–$490M; midpoint $460M $430M–$490M; midpoint $460M Maintained
Q3 Adjusted EBITDA growthQ3 2025—+9% to +12% YoY New Q3 color
GAAP Net Income (guide base)FY 2025$377M–$428M $383M–$419M Narrowed range
D&AFY 2025$440M–$450M (expectation) $440M–$450M (recon) Maintained
Net InterestFY 2025$141M–$146M (recon) $142M–$147M Slight range shift
Income TaxesFY 2025$134M–$156M $137M–$154M Narrowed
SKSS Adj. EBITDA (company view)FY 2025~$140M midpoint (segment outlook) ~$140M midpoint (reaffirmed) Maintained

Earnings Call Themes & Trends

TopicPrior Two Quarters (Q4’24, Q1’25)Q2 2025 CommentaryTrend
PFAS/regulatoryEPA/DoD-supported incineration testing; expect results, multibillion opportunity; pipeline +20% QoQ Six-nines destruction performance cited; EPA guidance anticipated; states accelerating action Positive momentum; regulatory clarity could accelerate
Incineration capacity (Kimball)Commercial launch ahead of plan; ramp over 12–18 months; +12% NA capacity Met Q2 target; ~28k tons in 2025; network EBITDA uplift; ramp continues Scaling as planned
ES pricing/marginsES margin expansion streak; pricing + utilization gains 13th consecutive ES margin improvement; 7% incineration price; strong utilization Structural margin strength
SKSS strategy (CFO, FIFO)CFO transition, idled CA plant; base oil weakness assumed in guide CFO execution and lower inventory costs to lift 2H; 64M gallons collected; Group III, Castrol partnership progressing Stabilizing with self-help
Industrial ServicesSofter in late 2024; 2025 turnaround count up; recovery expected +15% turnaround count YoY; not required for back-half guidance; cautious optimism Gradual improvement
Macro/reshoringReshoring, infrastructure support volumes; Phoenix hub planned Reshoring “funded reality,” robust pipeline; Phoenix site purchased, hub playbook Tailwind building
M&A/capital allocationActive pipeline; leverage ~2x; buybacks opportunistic Pipeline “very full”; focus on high-synergy assets; ~$700M cash, low leverage Capacity to deploy

Management Commentary

  • “We improved our consolidated Adjusted EBITDA margin by 60 basis points from a year ago… and posted the best quarterly safety results in our history… TRIR of just 0.40” – Mike Battles, Co-CEO .
  • “Incineration utilization, excluding the new Kimball incinerator, was outstanding at 89%… Average incineration price rose 7% on a mix-adjusted basis” – Eric Gerstenberg, Co-CEO .
  • “We anticipate a strong second half… executing on pricing strategies, cost mitigation and operational efficiencies to drive further margin improvement” – Mike Battles, Co-CEO .
  • “With $700 million in cash, low leverage… we’re in an ideal position to accelerate our growth and scale through both organic investments and strategic M&A” – Management .

Q&A Highlights

  • Macro and pipeline: Management sees all-time high network volumes, strong multi-vertical pipeline, and believes it is likely taking share given national footprint; resilience despite slower industrial macro .
  • Industrial Services: Turnaround count up ~15% YoY but back-half guidance does not rely on a significant ramp; potential upside if activity accelerates .
  • SKSS: CFO shift and FIFO inventory roll-off to drive sequential profitability in Q3; confident in ~$140M 2025 Adj. EBITDA for the segment .
  • PFAS: EPA/DoD incineration study supports high-temperature destruction with emissions well below standards; EPA guidance expected, with states already driving activity .
  • Kimball: Tracking to ~28k tons in 2025 with incremental network EBITDA; start-up costs created a minor drag that should abate as throughput ramps .

Estimates Context

MetricQ4 2024 ActualQ4 2024 Consensus*Q1 2025 ActualQ1 2025 Consensus*Q2 2025 ActualQ2 2025 Consensus*
Revenue ($MM)1,431.1 1,432.1*1,431.95 1,440.9*1,549.85 1,592.1*
Primary EPS ($)1.55 1.36*1.09 1.05*2.36 2.39*

Values retrieved from S&P Global.*

  • Q2 2025 modestly missed revenue and EPS vs consensus; however, consolidated Adjusted EBITDA and margin execution were strong, suggesting Street models may need to reflect ES margin durability and SKSS CFO benefits into 2H25 .

Key Takeaways for Investors

  • ES remains the engine: high utilization, price realization, and disciplined SG&A are underpinning sustained margin expansion even with lighter large emergency response activity .
  • SKSS stabilization is progressing: CFO pricing and FIFO inventory dynamics point to sequential improvement into Q3/Q4; management reaffirmed ~$140M 2025 Adj. EBITDA .
  • Guidance intact with added Q3 color: maintaining FY25 midpoints and calling for Q3 Adj. EBITDA +9–12% YoY suggests confidence in demand, pricing, and execution .
  • Capacity-led catalysts: Kimball ramp and Phoenix hub replication should support volumes, network efficiency, and medium-term margin expansion .
  • PFAS optionality: favorable testing and expected guidance could accelerate a multiyear, multi-billion opportunity, with Clean Harbors positioned for end-to-end solutions .
  • Watch items: SKSS commodity exposure (base oil), tariff-related customer timing, and the cadence of industrial turnarounds—none of which are required for the current back-half guide .
  • Tactical angle: Any pullbacks on modest top-line misses may be opportunities if ES margin trajectory, guidance durability, and PFAS/Kimball catalysts continue to firm up .

Source Citations

  • Q2 2025 8-K and press release: .
  • Q2 2025 earnings call transcript: .
  • Q1 2025 press and call (trend, prior guidance): .
  • Q4 2024 press and call (trend): .

Note: Consensus estimates denoted with an asterisk are Values retrieved from S&P Global.*