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REPUBLIC SERVICES, INC. (RSG)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered revenue of $4.235B, diluted EPS of $1.75, and adjusted EPS of $1.77; adjusted EBITDA rose to $1.361B with margin expansion to 32.1% (+100 bps YoY) .
  • Versus S&P Global consensus, EPS modestly beat, EBITDA beat, and revenue slightly missed: EPS $1.77 vs $1.756*, EBITDA $1.361B vs $1.342B*, and revenue $4.235B vs $4.264B* (mix tailwind from event-driven landfill volumes) .
  • Guidance updated: full-year revenue lowered to $16.675–$16.750B (from $16.850–$16.950B), adjusted EBITDA and adjusted EPS maintained, and adjusted FCF raised to $2.375–$2.415B, aided by bonus depreciation; quarterly dividend increased to $0.625 .
  • Call catalysts: clarification on revenue reduction drivers (Environmental Solutions softness; core volume reduction), sustainability project progress (RNG, Polymer Centers, EV fleet), and labor disruptions treated as excluded from adjusted results; margin cadence discussed (Q3’24 out-of-period benefit headwind in Q3’25) .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA growth and margin expansion: adjusted EBITDA $1.361B; margin 32.1% (+100 bps YoY), driven by pricing ahead of cost inflation and disciplined execution .
  • Event-driven landfill volumes (hurricane Carolinas, wildfire LA) helped margins (+60 bps contribution), with underlying business adding +70 bps; management maintained adjusted EBITDA and EPS guidance despite revenue guide-down .
  • Sustainability milestones: four RNG projects commenced in Q2 (six completed YTD), Polymer Center Indianapolis commenced commercial production in July, EV fleet reached 114 vehicles with 27 charging facilities; “We produced double-digit growth in EBITDA and 100 basis points of adjusted EBITDA margin expansion…” .

What Went Wrong

  • Revenue guide reduced ~midpoint $190M, primarily due to Environmental Solutions softness and lower expected volumes in recycling & waste (construction/manufacturing malaise, tariff uncertainty), partly offset by acquisitions .
  • Environmental Solutions revenue down YoY ($462M vs $473M), with flat margin at 23.7% amid lower event volumes and sluggish manufacturing end markets .
  • Recycled commodity prices declined to $149/ton (vs $173/ton prior year), pressuring revenue; net fuel and lower commodity prices each weighed ~10 bps on margins .

Financial Results

Consolidated Results vs Prior Periods and Consensus

MetricQ2 2024Q1 2025Q2 2025 ConsensusQ2 2025 Actual
Revenue ($USD Billions)$4.048 $4.009 $4.265*$4.235
Diluted EPS ($)$1.62 $1.58 $1.756*$1.75
Adjusted EPS ($)$1.61 $1.58 —$1.77
Adjusted EBITDA ($USD Billions)$1.258 $1.268 $1.342*$1.361
Adjusted EBITDA Margin (%)31.1% 31.6% —32.1%
Net Income Margin (%)12.6% 12.3% —13.0%

Notes: Values marked with * retrieved from S&P Global.

  • Significant beats/misses: EPS beat; EBITDA beat; revenue slight miss .

Segment Performance (Revenue and Adjusted EBITDA)

SegmentQ2 2024 Revenue ($MM)Q2 2024 Adj. EBITDA ($MM)Q2 2024 Margin (%)Q2 2025 Revenue ($MM)Q2 2025 Adj. EBITDA ($MM)Q2 2025 Margin (%)
Recycling & Waste$3,575 $1,146 32.0% $3,773 $1,252 33.2%
Environmental Solutions$473 $112 23.7% $462 $109 23.7%
Total$4,048 $1,258 31.1% $4,235 $1,361 32.1%

KPIs and Pricing Dynamics

KPIQ2 2024Q1 2025Q2 2025
Core Price (Total Revenue)6.8% 6.1% 5.7%
Core Price (Related Business)8.1% 7.3% 7.0%
Average Yield (Total)5.5% 4.5% 4.1%
Average Yield (Related)6.6% 5.4% 5.0%
Volume (Total)-0.8% -1.2% +0.2%
Recycled Commodity Price ($/ton)$173 $155 $149
Customer Retention Rate—>94% >94%

Additional operational notes: Event-driven volume uplift in landfill C&D (+47.3%) and special waste (+22.4%) in Q2 2025; large-container volumes -3.4% and residential volumes -3.2% due to macro softness and contract shedding .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)FY 2025$16.850–$16.950 $16.675–$16.750 Lowered
Adjusted EBITDA ($B)FY 2025$5.275–$5.325 $5.275–$5.325 Maintained
Adjusted Diluted EPS ($)FY 2025$6.82–$6.90 $6.82–$6.90 Maintained
Adjusted Free Cash Flow ($B)FY 2025$2.320–$2.360 $2.375–$2.415 Raised
Quarterly Dividend ($/share)Next payable Oct 15, 2025$0.58 (declared in Q1) $0.625 Increased (~8%)

Management noted bonus depreciation adds ~$80M to FCF, partially offset by ~$25M higher capex; tariffs impact de minimis .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Environmental Solutions demandQ4: ES revenue + YoY, margin 23.7%; macro/PMI soft across 2023–2024 ES revenue -$11M YoY; margin flat; manufacturing malaise and fewer emergency events Deteriorated near-term
Construction & large container volumesQ1: Large container -3.3% volume; weather impact; expect flat construction Large container -3.4% volume; event-driven landfill (C&D) offsets; underlying construction remains soft Mixed (event-driven uplift vs core softness)
Pricing vs cost spreadQ4/Q1: Pricing ahead of inflation; margins expanding Continued spread; margin +100 bps YoY; net fuel and commodities modest headwind Maintained
Tariffs/macro uncertaintyQ1: Tariffs uncertain; minimal impact expected Minimal 2025 impact; supplier transparency and pass-through targeted Stable/minor headwind
Sustainability (RNG, EV, Polymer Centers)Q1: RNG projects ramp; EV fleet 80; Indy Polymer Center grand opening 4 RNG projects in Q2; EV fleet 114; Indy commercial production in July; demand strong Improving execution
Digital/AI (RISE routing)Q1: Digital tools advancing; M-Power rollout Using AI to build routes; seconds/minutes savings worth $4–$5M per minute across system Scaling

Management Commentary

  • “We produced double-digit growth in EBITDA and 100 basis points of adjusted EBITDA margin expansion by continuing to price ahead of cost inflation and consistently executing our operational plan.” — Jon Vander Ark (CEO) .
  • “Volume growth included outside special waste and C&D landfill activity… related to hurricane recovery efforts in the Carolinas and wildfire remediation in the Los Angeles area… partially offset by declines in the collection business.” — Vander Ark .
  • “Total company adjusted EBITDA margin expanded 100 basis points… +60 bps from event-driven landfill volumes and +70 bps from the underlying business; -10 bps each from net fuel, recycled commodity prices, and acquisitions.” — Brian DelGhiaccio (CFO) .
  • “We plan to remove the impact of recent labor disruptions from our adjusted results, which is reflected in our updated full year guidance.” — Vander Ark .
  • “We increased our full year adjusted free cash flow guidance… reflects the benefit to cash taxes from 100% bonus depreciation.” — Vander Ark .

Q&A Highlights

  • Revenue guide bridge: ~$65M reduction from recycling & waste volumes (construction/manufacturing softness), remainder in ES; commodity/fuel/RINs declines largely offset by incremental acquisitions .
  • Labor disruptions: primarily added labor costs and customer credits; disruptions localized; excluded from adjusted results; several markets resolved quickly .
  • Free cash flow uplift: bonus depreciation adds ~$80M; capex +$25M (lease buyouts, minor tariff impacts) .
  • Margin cadence: Q3’25 faces a 40 bps YoY comp headwind from Q3’24 $20M out-of-period benefits (insurance $15M, bad debt $5M); expect flattish 2H margins vs prior year .
  • Event-driven landfill: C&D +47% and special waste +22% volumes lifted margins; core collection volumes weaker (large container -3.4%, residential -3.2%) .

Estimates Context

MetricQ2 2025 ConsensusQ2 2025 ActualBeat/Miss
Primary EPS Consensus Mean ($)1.75584*1.77 Beat
Revenue Consensus Mean ($MM)4,264.62*4,235 Miss
EBITDA Consensus Mean ($MM)1,341.63*1,361 Beat
Primary EPS – # of Estimates19*——
Revenue – # of Estimates19*——

Notes: Values marked with * retrieved from S&P Global.

Implication: Consensus likely revises ES trajectory and commodity assumptions modestly lower, while maintaining confidence in pricing discipline and margin delivery.

Key Takeaways for Investors

  • Pricing power intact: Core price (related) 7.0% and average yield (related) 5.0% continue to exceed cost inflation, supporting margin expansion even in a soft volume environment .
  • Mix tailwinds offset macro softness: Event-driven landfill volumes and disciplined pricing delivered margin beats despite revenue softness in ES and construction/manufacturing end markets .
  • Guidance quality: Maintaining adjusted EBITDA/EPS while raising FCF (bonus depreciation) demonstrates resilience; revenue guide-down narrows top-line ambition without compromising profitability .
  • Sustainability execution gains: RNG projects, Polymer Center ramp (Indy), and EV fleet scaling should underpin medium-term cash generation and strategic differentiation .
  • Near-term modeling: Expect flattish 2H margins YoY, slight volume headwinds as event-driven landfill fades by Q4; note Q3’25 40 bps margin comp headwind from Q3’24 benefits .
  • Labor disruptions non-GAAP normalized: Adjusted results exclude localized disruptions; monitor resolution pace and any residual customer credit impacts .
  • M&A pipeline remains robust: ~$1B+ 2025 activity likely; acquisitions continue to offset commodity/fuel/RINs variability and support ES footprint and capabilities .

Other relevant press releases: Sustainability report highlights a 20% GHG reduction vs 2017 baseline and progress across safety/talent goals . Year-to-date cash from operations $2.13B and adjusted FCF $1.42B underscore strong cash conversion .