Republic Services Reports 8 Percent Revenue Growth in Q1 2024

Republic Services, Inc. (NYSE:RSG) reported 8 percent revenue growth in Q1, attributed to a strong pricing strategy.

The Phoenix-based environmental services provider achieved a net income of $453.8 million, up from $383.9 million YOY.

"Continued pricing in excess of cost inflation generated double-digit growth in EBITDA and EPS, and expanded EBITDA margin by more than 100 basis points," Jon Vander Ark, Republic president and CEO.

Vander Ark further noted that severe weather in January negatively impacted large container and disposal volumes but eventually rebounded as conditions improved.

Republic Services reported $41 million in acquisitions in Q1 and plans to pursue an additional $500 million in value-creating opportunities in 2024.

"Our acquisition pipeline remains supportive of continued activity in both the Recycling and Waste and Environmental Solutions businesses," Vander Ark said.

Technology investments are expected to increase efficiencies and reduce costs throughout 2024. The company estimates that a new asset management system will translate into $20 million of annual cost savings by 2026.

Republic Services also has installed cameras on routes, focusing on optimization and contamination reduction.

"This technology will reduce contamination in our recycling centers and is expected to generate approximately $60 million in incremental annual revenue.," Vander Ark said. "To-date, we have already achieved $30 million of annual benefit."

Republic Services continues to progress with its sustainability line of business, investing in its various polymer centers to create a circular supply chain.

The company's Las Vegas polymer center began shipping plastic flakes to suppliers in March. Republic expects equipment installation in its Indianapolis Polymer Center to commence in June.

"The renewable natural gas projects being co-developed with our partners continue to advance," Vander Ark commented. "One project came online during the first quarter, and we expect at least seven additional projects to be completed in 2024."

Fleet electrification efforts are also moving forward. The company currently has 15 EV trucks in operation, and 50 more will be rotated into the fleet by 2024.

We continue to advance our efforts to support decarbonization, including our industry-leading commitment to fleet electrification. We currently have 15 collection vehicles in operation.

"We now have seven facilities with commercial EV charging infrastructure," he said. "Development of 40 additional locations is underway with more than 10 new sites expected to be completed in 2024."

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Revenue: $3.86 billion up from $3.581 billion in 2023

Adjusted EBITDA: $1.164.5 billion
Net Income: $453.8 million, up from $383.9 million in Q1 2023
Commodity Price Per Ton: $153, up from $105 YOY