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REPUBLIC SERVICES, INC. (RSG)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a clean EPS beat and margin expansion: adjusted EPS $1.90 vs S&P Global consensus ~$1.78*, adjusted EBITDA margin 32.8% (+80 bps YoY), while revenue of $4.21B was slightly below the ~$4.25B* consensus as Environmental Solutions remained soft . EPS beat: +$0.12*, revenue miss: -$38.5M*; adjusted EBITDA vs consensus ~$1.33B* came in higher on a non‑GAAP basis at $1.38B .
  • Management reiterated all full‑year 2025 guidance components except revenue, which is now expected near the low end of the $16.675–$16.750B range; adjusted EPS and adjusted EBITDA guidance were reaffirmed .
  • Pricing continued to outpace cost inflation (core price +5.9% on total revenue; +7.2% on related business), offsetting cyclical volume pressure and lower recycled commodity prices ($126/ton vs $177/ton LY) .
  • Key swing factors: event‑driven landfill work (~$36M in Q3; ~$100M YTD, 30 bps full‑year margin tailwind) will not repeat in 2026; Environmental Solutions stabilized exiting Q3 but remains a drag near‑term .

Note: Asterisks denote S&P Global consensus/estimate values. Values retrieved from S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • Margin expansion and EPS beat: adjusted EBITDA margin rose 80 bps YoY to 32.8%, and adjusted EPS grew to $1.90; CEO: “we delivered strong third‑quarter results… drove an 80‑basis‑point expansion in adjusted EBITDA margin” .
    • Pricing power: core price +5.9% (total), +7.2% (related business; 8.6% open market/4.8% restricted) supported organic growth despite volume softness .
    • Sustainability execution: 6 RNG projects commenced YTD (7 expected for 2025); Indianapolis Polymer Center in production; Blue Polymers facility expected to start late Q4 .

  • What Went Wrong

    • Environmental Solutions softness: net revenue fell to $433M (vs $465M LY) with adjusted EBITDA margin down to 20.3% (vs 25.2% LY), reflecting weaker manufacturing and fewer emergency response jobs; demand “stabilized” exiting Q3 but comps remain tough .
    • Recycling commodity headwind: average commodity price dropped to $126/ton (from $177/ton LY), reducing organic growth by ~20 bps; prices exited ~ $120/ton .
    • Labor disruption: recorded $56M impact in Q3 (incl. $16M customer credits and $40M cost of operations), affecting reported revenue and costs; management expects no further residual impact .

Financial Results

Sequential performance (2025 YTD)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$4.009 $4.235 $4.212
Diluted EPS (GAAP)$1.58 $1.75 $1.76
Adjusted EPS (Non‑GAAP)$1.58 $1.77 $1.90
Adjusted EBITDA ($USD Billions)$1.268 $1.361 $1.383
Adjusted EBITDA Margin %31.6% 32.1% 32.8%
Net Income Margin % (GAAP)12.3% 13.0% 13.1%
Avg Recycled Commodity Price ($/ton)$155 $149 $126
Core Price (Total) %6.1% 5.7% 5.9%
Average Yield (Total) %4.5% 4.1% 4.0%
Volume Impact (Total) %-1.2% +0.2% -0.3%

Year-over-year snapshot (Q3)

MetricQ3 2024Q3 2025
Revenue ($USD Billions)$4.076 $4.212
Diluted EPS (GAAP)$1.80 $1.76
Adjusted EPS (Non‑GAAP)$1.81 $1.90
Adjusted EBITDA ($USD Billions)$1.303 $1.383
Adjusted EBITDA Margin %32.0% 32.8%
Net Income Margin % (GAAP)13.9% 13.1%

Estimates vs Actuals (S&P Global)

MetricQ1 2025Q2 2025Q3 2025
EPS Consensus Mean*$1.533*$1.756*$1.784*
EPS Actual$1.58 $1.77 $1.90
Revenue Consensus Mean* ($B)$4.049*$4.265*$4.251*
Revenue Actual ($B)$4.009 $4.235 $4.212
EBITDA Consensus Mean* ($B)$1.239*$1.342*$1.351*
EBITDA Actual ($B)$1.268 $1.361 $1.267 (GAAP EBITDA)

Note: Asterisks denote S&P Global consensus/estimate values. Values retrieved from S&P Global.

Segment breakdown (Business Types)

Business TypeQ3 2024 Revenue ($B)Q3 2025 Revenue ($B)Q3 2024 Adj. EBITDA ($B)Q3 2025 Adj. EBITDA ($B)Q3 2024 Adj. EBITDA Margin %Q3 2025 Adj. EBITDA Margin %
Recycling & Waste$3.611 $3.779 $1.186 $1.295 32.8% 34.3%
Environmental Solutions$0.465 $0.433 $0.117 $0.088 25.2% 20.3%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$16.675–$16.750B Near low end of $16.675–$16.750B Lowered (to low end)
Adjusted EBITDAFY 2025$5.275–$5.325B Reiterated Maintained
Adjusted Diluted EPSFY 2025$6.82–$6.90 Reiterated Maintained
Adjusted Free Cash FlowFY 2025$2.375–$2.415B Reiterated (implied) Maintained
DividendQ1 2026 pay date$0.625 per share payable Jan 15, 2026 $0.625 per share payable Jan 15, 2026 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Price-cost spreadCore price: Q1 6.1%; Q2 5.7%; yield Q1 4.5%; Q2 4.1% Core price 5.9% (total), 7.2% (related; 8.6% open/4.8% restricted). Mgmt modeling 75–100 bps price over CPI into 2026 Stable positive spread
Environmental SolutionsQ1 ES adj. EBITDA margin 20.1% ; Q2 23.7% ES revenue $433M; margin 20.3%; demand stabilized exiting Q3; tough Q4 comp Down in Q3; stabilization signs
Recycled commodity prices$155/ton (Q1); $149/ton (Q2) $126/ton avg; ~$120 exiting Q3; fee-for-service model reduces volatility Downward pressure
Event-driven (C&D, special waste)Q2: C&D +47% vol (related business) Hurricane Carolinas drove ~$35M; YTD event-driven ~$100M; ~30 bps FY margin tailwind; non-repeat in 2026 Transitory tailwind
Sustainability (RNG, polymers)Q1: 1 RNG project; Q2: 4 projects commenced 6 RNG projects YTD (7 expected); Indy Polymer Center live; Blue Polymers late Q4 Ramping execution
Fleet electrification—137 EVs in operation; >150 expected YE; 32 sites with charging Scaling
Macro/tariffs—Tariffs cited among manufacturing headwinds; macro uncertainty noted Macro caution

Management Commentary

  • Strategy and margins: “We delivered strong third-quarter results… our ability to price ahead of cost inflation and disciplined operational execution drove an 80-basis-point expansion in adjusted EBITDA margin.” — Jon Vander Ark, CEO .
  • Demand and volumes: “Organic volume decreased… increase in C&D tons related to hurricane recovery… Special waste activity… offset by a decline in the collection business.” .
  • Environmental Solutions: “Performance was impacted by… softness in manufacturing… lower event-driven volumes… fewer emergency response jobs… demand stabilized exiting the third quarter.” .
  • 2026 framing: “Long-term growth algorithm is intact… 30–50 bps of EBITDA margin expansion per year… ~$100M event-driven landfill volumes in 2025 will not repeat in 2026.” .
  • Pricing outlook: “Think about a yield number that’s 75–100 bps above [CPI]” .

Q&A Highlights

  • Event-driven revenue cadence: ~$12M (Q1), ~$53M (Q2), ~$36M (Q3); ~$100M YTD; hurricane cleanup in Carolinas ~+$35M in Q3; ~30 bps full-year margin uplift .
  • Commodity pricing and hedge approach: Prices stepped down through Q3 (~$126 average; ~ $120 exiting); thin hedging markets; RSG moved to fee-for-service with commodity sharing to reduce volatility .
  • ES margins and one-offs: ES margin compression largely from mix/volume; unique items (bad debt recovery last year vs legal settlement this year) added ~140 bps YoY margin headwind in ES .
  • Labor disruption accounting: $56M impact recorded in Q3 (incl. $16M revenue credits and $40M operating costs); management does not expect residual impacts into Q4/2026 .
  • Capital allocation: ~$539M buybacks in Q3 (2.3M shares); management remains opportunistic on repurchases; M&A pipeline remains strong (tilted to Recycling & Waste) .

Estimates Context

  • Q3 2025 vs S&P Global consensus: adjusted EPS $1.90 vs ~$1.78* (beat ~$0.12*); revenue $4.212B vs ~$4.251B* (miss ~$0.039B*); EBITDA (GAAP) $1.267B vs ~$1.351B* (miss ~$0.024B*), though adjusted EBITDA was $1.383B .
  • Prior quarters: Q2 2025 adjusted EPS $1.77 vs ~$1.76*; revenue $4.235B vs ~$4.265B*; EBITDA $1.361B vs ~$1.342B*; Q1 2025 adjusted EPS $1.58 vs ~$1.53*; revenue $4.009B vs ~$4.049B*; EBITDA $1.268B vs ~$1.239B* .

Note: Asterisks denote S&P Global consensus/estimate values. Values retrieved from S&P Global.

KPIs

KPI trends

KPIQ1 2025Q2 2025Q3 2025
Core Price (Total) %6.1% 5.7% 5.9%
Average Yield (Total) %4.5% 4.1% 4.0%
Volume Impact (Total) %-1.2% +0.2% -0.3%
Avg Recycled Commodity Price ($/ton)$155 $149 $126

Other Q3 KPIs

KPIQ3 2025
Customer Retention94%
Event-Driven Revenue~$36M in Q3; ~$100M YTD
EV Fleet in Operation137 vehicles; >150 expected YE
RNG Projects Commenced YTD6 (7 expected in 2025)

Earnings Materials Cross-Checks

  • Revenue by line of business, pricing/yield/volume, cost breakdowns, and non‑GAAP reconciliations were consistent between the 8‑K and press release exhibits .
  • Labor disruption presentation: revenue credits ($16M) embedded in reported revenue; $56M total impact added back for adjusted EBITDA; disclosed consistently across PR and call .

Key Takeaways for Investors

  • Durable pricing power continues to outpace costs, supporting margin expansion even with softer volumes and lower commodity prices; this remains central to the mid‑single‑digit growth algorithm .
  • EPS outperformance and margin strength offset a small revenue shortfall; the mix skew (Recycling & Waste up, Environmental Solutions down) explains consensus variances* .
  • 2025 revenue now guided to the low end of the prior range; adjusted EPS/EBITDA and FCF guidance maintained—implying confidence in cost discipline and pricing execution .
  • Event-driven landfill tailwinds in 2025 (~$100M revenue; ~30 bps margin) will not repeat in 2026; build expectations accordingly as comps normalize .
  • ES segment appears to be stabilizing exiting Q3; pipeline is improving but recovery is likely gradual and sensitive to manufacturing/emergency response activity .
  • Sustainability and network investments (RNG, polymers, EV fleet) are scaling and should contribute incrementally to growth and returns over time .
  • Capital deployment remains active and balanced (acquisitions + opportunistic buybacks), with ~$1.9B repurchase authorization remaining at 9/30 .

Note: Asterisks denote S&P Global consensus/estimate values. Values retrieved from S&P Global.