Executive Summary

Q1 2025 delivered resilient profitability despite topline headwinds: adjusted EBITDA rose to $1.27B with 140 bps margin expansion to 31.6%, driven by pricing ahead of cost inflation and cost discipline . EPS was $1.58 vs $1.44 YoY; net income margin expanded 50 bps to 12.3% .
Versus Wall Street consensus, EPS beat ($1.58 vs $1.533*) while revenue modestly missed ($4.009B vs $4.049B*), as cyclical volume softness, severe winter weather ($25–$30M impact), and one fewer workday weighed on the top line while price/cost spread lifted margins .
Guidance was implicitly reaffirmed; company remains on track for FY 2025 targets (revenue $16.85–$16.95B, adjusted EBITDA $5.275–$5.325B, adjusted EPS $6.82–$6.90, adjusted FCF $2.32–$2.36B); average yield assumptions (~4% total; ~5% related revenue) and volume (−25 bps to +25 bps) unchanged .
Strategic catalysts: accelerating sustainability investments (Polymer Centers ramp in Indianapolis; seven RNG projects targeted for 2025), strong customer retention (>94%), and active M&A pipeline (> $1B target), underpinning multi-year margin and cash flow trajectory .

What Went Well and What Went Wrong

What Went Well

Pricing ahead of inflation and mix benefits expanded adjusted EBITDA margin by 140 bps to 31.6%; management highlighted underlying 110 bps expansion plus 40 bps from one fewer workday .
Customer retention remained >94%, with improving NPS; quote: “Our focus on delivering world-class essential services continues to support organic growth and enhance customer loyalty” .
Sustainability momentum: Indianapolis Polymer Center opening with ramp and strong demand; seven RNG projects expected to commence in 2025; quote: “We could sell out both Las Vegas and Indianapolis multiple times over… pricing appropriately” .

What Went Wrong

Organic volumes fell (−1.2% total; −1.5% related), pressured by shedding underperforming residential contracts and softness in construction/manufacturing; weather reduced volume by $25–$30M .
Environmental Solutions margin slipped to 20.1% from 20.5% YoY due to project timing and severe winter weather; management expects YoY expansion for FY 2025 but cautioned quarterly lumpiness .
Topline was constrained by one fewer workday (−50 bps impact) and continued macro uncertainty (tariffs/trade policy), contributing to the slight revenue miss vs consensus .

Financial Results

Consolidated Performance vs Prior Quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$4,076.2	$4,046	$4,009
Diluted EPS ($USD)	$1.80	$1.63	$1.58
Adjusted EPS ($USD)	$1.81	$1.58	$1.58
Adjusted EBITDA ($USD Millions)	$1,303.3	$1,253	$1,268
Adjusted EBITDA Margin (%)	32.0%	31.0%	31.6%
Net Income Margin (%)	13.9%	12.7%	12.3%

Year-over-Year (Q1 2025 vs Q1 2024)

Metric	Q1 2024	Q1 2025
Revenue ($USD Millions)	$3,862	$4,009
Diluted EPS ($USD)	$1.44	$1.58
Adjusted EPS ($USD)	$1.45	$1.58
Adjusted EBITDA ($USD Millions)	$1,165	$1,268
Adjusted EBITDA Margin (%)	30.2%	31.6%
Net Income Margin (%)	11.8%	12.3%

Segment Breakdown (Business Type)

Metric	Q1 2024	Q1 2025
Recycling & Waste Revenue ($USD Millions)	$3,438	$3,560
Environmental Solutions Revenue ($USD Millions)	$424	$449
Total Revenue ($USD Millions)	$3,862	$4,009
Recycling & Waste Adjusted EBITDA ($USD Millions)	$1,078	$1,178
Environmental Solutions Adjusted EBITDA ($USD Millions)	$87	$90
Total Adjusted EBITDA ($USD Millions)	$1,165	$1,268
Recycling & Waste Adjusted EBITDA Margin (%)	31.3%	33.1%
Environmental Solutions Adjusted EBITDA Margin (%)	20.5%	20.1%
Total Adjusted EBITDA Margin (%)	30.2%	31.6%

Revenue by Line of Business (Q1)

Line of Business	Q1 2024 ($MM)	Q1 2024 (%)	Q1 2025 ($MM)	Q1 2025 (%)
Collection (Total)	$2,663	69.0%	$2,743	68.4%
Transfer (Net)	$183	4.7%	$188	4.7%
Landfill (Net)	$404	10.4%	$421	10.5%
Environmental Solutions (Net)	$424	11.0%	$449	11.2%
Recycling Processing & Commodity Sales	$95	2.5%	$108	2.7%
Other Non-core	$93	2.4%	$100	2.5%
Total Revenue	$3,862	100.0%	$4,009	100.0%

KPIs and Cost Drivers (Q1)

KPI	Q1 2024	Q1 2025
Core Price (Total Revenue)	7.0%	6.1%
Core Price (Related Business)	8.5%	7.3%
Average Yield (Total Revenue)	6.0%	4.5%
Average Yield (Related Business)	7.3%	5.4%
Volume (Total Revenue)	−0.9%	−1.2%
Volume (Related Business)	−1.1%	−1.5%
Recycling Commodity Price ($/ton)	$153	$155
Cash from Operations ($MM)	$811	$1,025
Adjusted Free Cash Flow ($MM)	$535	$727

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Billions)	FY 2025	$16.85–$16.95	Reaffirmed	Maintained
Adjusted EBITDA ($USD Billions)	FY 2025	$5.275–$5.325	Reaffirmed	Maintained
Adjusted Diluted EPS ($USD)	FY 2025	$6.82–$6.90	Reaffirmed	Maintained
Adjusted Free Cash Flow ($USD Billions)	FY 2025	$2.320–$2.360	Reaffirmed	Maintained
Average Yield (Total Revenue)	FY 2025	~4%	~4%	Maintained
Average Yield (Related)	FY 2025	~5%	~5%	Maintained
Volume Impact (Total Revenue)	FY 2025	(−0.25%) to +0.25%	(−0.25%) to +0.25%	Maintained
Net Interest Expense ($MM)	FY 2025	—	~$565	New/Specified
Equivalent Tax Impact (%)	FY 2025	—	~25%	New/Specified
Quarterly Dividend/Share ($USD)	Q2 2025	—	$0.58 (declared/paid Apr; next record Jul 2)	Maintained run-rate

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3/Q4 2024)	Current Period (Q1 2025)	Trend
Digital tools (RISE & M-Power/Empower)	RISE fees boosted yield; Empower rollout targeting 2025 completion; ~$20M annual savings when fully implemented .	M-Power implemented at ~40% facilities; continued deployment to improve technician productivity and warranty recovery .	Execution advancing; incremental cost savings validated .
Pricing/Retention	Core price ~6–7%; retention >94% .	Core price 6.1% total; 7.3% related; retention >94% with improving NPS .	Sustained pricing power; customer loyalty strong .
Macro (construction/manufacturing; tariffs)	Softness in construction/manufacturing pressured large container volumes .	Weather + macro softness harmed volumes; cautious on construction; manufacturing showing “wait and see”; tariff uncertainty noted .	Mixed; gradual stabilization hoped; risk from tariffs persists .
Sustainability (Polymer Centers & RNG)	Las Vegas operational; Indianapolis commissioning; Blue Polymers Buckeye progressing; 7 RNG projects targeted in 2025 .	Indianapolis grand opening; ramping commercial production in June; strong demand/pricing; 7 RNG projects expected to commence operations in 2025 .	Ramp accelerating; revenue/EBITDA contribution guided ($70MM/$35MM) .
Environmental Solutions (ES)	Q4 2024 ES margin improved to 24.7%; IT integration mostly complete .	ES margin 20.1% due to project timing/weather; management expects FY YoY margin expansion, not linear quarterly .	Positive multi-year trajectory despite quarterly lumpiness .
Recycling commodity prices	~$153/ton in Q4’24; FY baseline $145/ton in 2025 guide .	~$155/ton in Q1; ~ $160 current; sensitivity ~$10MM EBITDA per $10/ton .	Tailwind vs guide baseline; modest overall impact .
M&A activity	2025 target ≥$1B; strong pipeline across ES and Recycling & Waste; ~1 pt revenue contribution from closed deals .	$826MM invested in Q1; pipeline supportive of >$1B for year .	Activity robust; accretive strategic fit focus .
Fleet electrification	52 EVs YE’24; plan >150 EVs in 2025 .	80 EVs in operation; 27 charging facilities; >30 by YE’25 .	Scaling EV footprint; regulatory incentives supportive .

Management Commentary

Strategic focus: “We are pleased with our first quarter results… we generated high single-digit growth in EBITDA and 140 basis points of adjusted EBITDA margin expansion by pricing ahead of cost inflation and effective cost management” — Jon Vander Ark, CEO .
Customer loyalty: “Our focus on delivering world-class essential services continues to support organic growth and enhance customer loyalty” .
Sustainability opportunity: “We could sell out both Las Vegas and Indianapolis multiple times over… we’re pricing appropriately” — CEO on Polymer Centers demand .
Margin drivers: “Most of [solid waste margin expansion] is driven by price in excess of our cost inflation… mix shift also had a positive impact” — CFO .
Guidance posture: “If we don’t formally update our guidance, we are implicitly and explicitly reaffirming our guidance” — CEO .

Q&A Highlights

Margin bridge and sustainability: Underlying margin expansion ~~50 bps+, offset by commodity and integration costs; if CNG tax credits not renewed (~~$20MM headwind), underlying strength still ~60–70 bps .
Volume dynamics: Large container volumes down on construction softness; residential volume down from intentional shedding post-M&A; weather impact isolated to Jan–Feb ($25–$30MM) .
M&A cadence: Pipeline robust across ES and Recycling & Waste; “like our chances to beat” the $1B target; ~1 pt revenue growth from closed deals included in guidance .
ES margin outlook: Quarterly lumpiness from mix and project timing; management expects YoY margin expansion in 2025 and 75–100 bps per year longer-term .
Recycling price sensitivity: ~$10MM EBITDA per $10/ton change; guide assumes $145/ton baseline; Q1 realized ~$155/ton, current ~$160/ton .

Estimates Context

Metric	Consensus (Q1 2025)	Actual (Q1 2025)	Result
Revenue ($USD Billions)	$4.049*	$4.009	Miss (−$0.040B)
EPS ($USD)	$1.533*	$1.58	Beat (+$0.047)

Values retrieved from S&P Global.*

Drivers: Revenue miss reflects weather, cyclical volume softness, and one fewer workday (−50 bps) ; EPS beat reflects strong price/cost spread and margin expansion, plus 40 bps benefit from one fewer workday .

Key Takeaways for Investors

Margin resilience continues: Pricing ahead of inflation and disciplined cost management are sustaining 30%+ adjusted EBITDA margins, even amid volume headwinds .
Estimate recalibration: Despite a modest revenue miss, EPS beat and cash generation outperformance ($1.025B CFO; $727MM adjusted FCF) suggest upward bias to earnings quality; expect sell-side to refine revenue cadence while keeping margin/FCF robust .
Sustainability ramp is gaining traction: Polymer Centers (Indianapolis ramp) and RNG projects (seven targeted in 2025) add diversified growth; guided contribution ~$70MM revenue and ~$35MM EBITDA in 2025 .
M&A as a growth lever: With $826MM deployed in Q1 and a strong pipeline (> $1B target), recent deals add ~1 pt to revenue growth, reinforcing multi-year consolidation and margin opportunity .
ES margin path is positive on a full-year view despite quarter-to-quarter noise; investors should focus on through-cycle expansion rather than single-quarter variances .
Watch macro signposts: Construction remains rate-sensitive; manufacturing is “wait and see”; tariff developments could influence near-term volume and cost assumptions .
Dividend consistency and balance sheet strength (leverage ~2.6x; A3 Moody’s upgrade) support return of capital and strategic flexibility .

REPUBLIC SERVICES, INC. (RSG)·Q1 2025 Earnings Summary