Casella Waste Sees Double-Digit Revenue Growth, Provides Update on Acquisition Activity

Casella Waste Systems (NASDAQ: CWST) reported robust Q3 earnings, citing acquisition activity, pricing and recycling commodity volumes as factors.

The Vermont-based solid waste services provider stated revenue reached $411.6 million in Q3 2024, up from $352.7 million, or 16.7 percent, from the previous year's quarter.

"The success of our operating plan, combined with our acquisition strategy, has allowed us to generate over $400 million in revenues and more than $100 million in Adjusted EBITDA in a quarter for the first time in the company’s history," commented John W. Casella, CEO and chairman. "Our entire team deserves recognition for their continued execution and hard work, which puts us on track for another successful year.”

John W. Casella provided an update on integration progress following numerous acquisitions, most recently Royal Carting and Welsh Sanitation, which was finalized on October 1. The acquisition adds two solid waste collection operations and two transfer stations in New York’s Middle and Lower Hudson Valley regions and western Connecticut. 

The purchase of Royal is expected to generate $90 million in annualized revenues.

"As always, our initial focus is on integration, which I'm happy to share is going well at the three larger acquisitions we completed this year, LMR, Whitetail and now Royal, with nearly 5000 employees, I'm very excited about what the future holds," he said.

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Despite positive results following acquisition activity, Casella Waste experienced a $2 million headwind from lower landfill volumes, mainly construction and demolition materials, and insurance expense accruals related to two "discrete" events.

"Together, these two items weighed on overall Adjusted EBITDA margins by 110 basis points,” John W. Casella said.

Advancements in fleet technology have focused on truck automation and routing efficiencies to reduce costs. Casella Waste also noted upgrades at recycling faciltiies that have allowed the company to process more at higher price points year over year.

“These operating strategies, together with our pricing programs, drove higher same-store Adjusted EBITDA margins, up 130 basis points in our collection and up 90 basis points in our Resource Solutions lines of business.”

Q3 Highlights:

Revenue: $411.6 million
Net Income: $5.8 million
Operating Income: $24.4 million

Net cash provided by operating activities: $171.6 million
Adjusted EBITDA: $102.9 million
Adjusted Free Cash Flow: $98.8 million