Casella Waste Systems, Inc. Reports Strong Q4 and Fiscal Year 2025 Results, Issues Optimistic 2026 Guidance

Key Highlights from Q4 and FY2025 Financial Results

• Revenues Surge: Q4 2025 revenues reached \$469.1 million, a jump of \$41.6 million or 9.7% year-over-year. Full-year 2025 revenues were \$1.837 billion, up \$279.6 million or 18.0% from FY2024.
• Solid Waste Pricing Growth: For 2025, solid waste pricing increased 4.9% year-over-year, with collection prices up 5.0% and disposal prices up 4.9%.
• Net Income Decline: Q4 2025 saw a net loss of \$(2.5) million, down \$7.4 million from the \$4.9 million net income in Q4 2024. Full-year net income was \$7.9 million, a decrease of \$5.7 million (-41.9%) compared to \$13.5 million in FY2024.
• Adjusted Metrics Improve:
  • Adjusted Net Income (non-GAAP) for FY2025 was \$80.6 million, up \$1.8 million (+2.3%) year-over-year.
  • Adjusted EBITDA for Q4 2025 was \$107.0 million (+12.7% YoY), and for FY2025 reached \$422.8 million (+17.3% YoY).
  • Adjusted Free Cash Flow for FY2025 was \$179.9 million, up \$21.6 million (+13.6%).
• Strategic Acquisitions: Nine businesses were acquired in FY2025, representing approximately \$115 million in annualized revenue. The Mountain State Waste acquisition, closed January 1, 2026, added another \$30 million, bringing the two-year acquisition total to \$145 million in annualized revenue.

Management Commentary and Growth Outlook

CEO Edmond (“Ned”) R. Coletta emphasized the company’s strong finish to 2025 and positive momentum into 2026, crediting robust acquisition integration, especially in the Mid-Atlantic region, and five consecutive years of double-digit growth in revenues, Adjusted EBITDA, and Free Cash Flow.

Coletta highlighted the company’s disciplined execution of its long-term strategy, focusing on investment in people, safety, innovation, and accountability. He noted that over the past five years, Casella has completed more than \$800 million in annualized revenue acquisitions, significantly expanding its geographic footprint and shareholder value.

The acquisition pipeline for 2026 is described as “robust,” with attractive opportunities for further expansion and platform densification.

Detailed Q4 2025 Financial Performance

• Revenue Growth Drivers: The Q4 revenue increase was primarily driven by acquisitions (including rollovers from prior deals), sustained collection and disposal price growth, and strong National Accounts growth in the Resource Solutions segment.
• Operating Income: Q4 2025 operating income was \$11.9 million, down \$6.6 million (-35.9%) YoY, mainly due to higher depreciation and amortization expenses from acquisition activity.
• Adjusted Net Income: \$18.9 million, down \$3.4 million (-15.1%) YoY.
• Adjusted EBITDA: \$107.0 million, up \$12.0 million (+12.7%) YoY, driven by acquisition and organic growth.

Full-Year 2025 Financial Overview

• Operating Income: \$63.7 million, down \$9.1 million (-12.5%) YoY, reflecting higher operating costs and depreciation/amortization from acquisitions.
• Net Income: \$7.9 million (\$0.12 per diluted share), down \$5.7 million and \$0.11 per share (-41.9% and -47.8% YoY), reflecting lower operating income, partly offset by lower taxes.
• Adjusted Net Income: \$80.6 million (+2.3%).
• Adjusted Diluted EPS: \$1.27, down \$0.05 (-3.8%), impacted by a higher share count.
• Adjusted EBITDA: \$422.8 million (+17.3%).
• Net Cash from Operating Activities: \$329.8 million (+17.2%).
• Adjusted Free Cash Flow: \$179.9 million (+13.6%).

Fiscal Year 2026 Outlook: Guidance Provided

• Revenues: \$1.970 to \$1.990 billion (targeting continued double-digit growth).
• Net Income: \$16 to \$22 million (significant improvement from FY2025).
• Adjusted EBITDA: \$455 to \$465 million.
• Net Cash from Operating Activities: \$370 to \$380 million.
• Adjusted Free Cash Flow: \$195 to \$205 million.
• Guidance does not include any yet-to-be-completed acquisitions, which could further boost results.

Key Issues and Risks for Investors & Shareholders

• Acquisition Integration: The company’s growth continues to be acquisition-driven. Ability to integrate and realize synergies from recent and future acquisitions is essential for hitting performance targets.
• Cost Pressures & Inflation: Rising fuel, wage, and other costs may challenge the ability to maintain or improve margins, especially if price increases cannot keep pace.
• Regulatory & Environmental Risks: New EPA designations for PFAS chemicals as hazardous substances are expected to increase compliance, remediation costs, and litigation risks.
• Weather Impacts: Adverse weather may affect revenues and margins, particularly at landfills.
• Commodity Volatility: Fluctuations in recyclables’ commodity pricing can create unpredictability in results.
• Ongoing Landfill Closures & Remediation: Costs related to the Southbridge Landfill and an organic facility closure in Maine remain ongoing and are carefully tracked as non-GAAP adjustments.
• Leverage and Liquidity: The company continues to utilize debt for growth; maintaining strong cash flows is critical to service obligations and support future acquisitions.

Balance Sheet and Cash Flow Position

• Total Assets: \$3.30 billion as of December 31, 2025, up from \$3.23 billion a year earlier.
• Current Assets: \$369.3 million.
• Total Debt: \$1.15 billion (including current and long-term portions).
• Cash and Equivalents: \$123.8 million.
• Shareholders’ Equity: \$1.57 billion.

Capital Expenditure Details

• 2025 Capital Expenditures: \$245.1 million, including \$83.0 million in growth investments and \$162.1 million in replacement capital (e.g., landfill development, vehicles, equipment).
• Acquisition-related CapEx: Spending on upgrading and integrating newly acquired assets and infrastructure projects such as McKean Landfill rail development.

Supplemental Information for Investors

• Non-GAAP Measures: The company continues to emphasize Adjusted EBITDA, Adjusted Net Income, and Adjusted Free Cash Flow, providing detailed reconciliations and rationale for adjustments related to acquisitions, closures, and non-recurring events.
• Conference Call: Casella will host a call on February 20, 2026, at 10:00 a.m. Eastern Time for investors and analysts. A webcast and replay will be available on the company’s investor relations website.

Conclusion: Implications for Shareholders

Casella Waste Systems, Inc. delivered strong revenue and cash flow growth in 2025, underpinned by strategic acquisitions and robust pricing. However, headline net income declined due to higher costs, notably depreciation and amortization from its aggressive acquisition strategy. The company’s 2026 guidance indicates confidence in continued growth and margin improvement, with an expanding acquisition pipeline expected to create further shareholder value.

Share Price Sensitivity: Investors should closely monitor the company’s ability to integrate acquisitions, manage costs, and address regulatory and environmental risks. Any deviations in execution or additional regulatory/litigation costs could materially affect future profitability and share price performance.

The outlook remains positive, but the company’s acquisition-driven growth model and exposure to external risks make it essential for investors to stay vigilant.

Disclaimer: The information above is derived from Casella Waste Systems, Inc.’s public filings and financial disclosures as of February 2026. This report is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult professional advisors before making investment decisions.

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