Republic Services Shows Q3 2024 Revenue Growth of 6.5 Percent

Republic Services reported a strong Q3 2024, with a 6.5 percent revenue increase to $4.076 billion, driven by rising commodity prices and core pricing. The company emphasized its focus on digital innovation, sustainability initiatives like polymer centers and renewable natural gas projects, and strategic acquisitions to support growth through 2025, despite softer cyclical volumes.

Stefanie Valentic, Editorial Director

October 30, 2024

3 Min Read

Phoenix-based Republic Services posted strong results for Q3 2024, reflecting positive earnings trends within the waste services sector.

Rising commodity prices and solid core pricing contributed to a 6.5 percent revenue growth. Revenue reached $4.076 billion, up from $3.825 billion in Q3 of the previous year.

"With respect to 2024, we believe we are trending toward the low end of our full-year revenue guidance due to continued softness in cyclical volumes," Jon Vander Ark, Republic Services president and CEO, told investors.

Vander Ark added that the company's strengths in identifying new opportunities, digital innovation and sustainability position it to perform well throughout the rest of 2024 and create long-term value. He also lauded the company's 94 percent retention rate.

Average yield on total revenue was 4.6 percent. Despite cost inflation, Republic drove 210 basis points of EBITDA margin expansion in Q3 2024.

The company's implementation of digital tools and technology contributed to growth, notably with the integration of MPower, a fleet and equipment management system designed to increase maintenance technician productivity. Deployment is expected to be complete by year-end, with $20 million in annual cost savings expected.

Vander Ark also pointed to new technology for waste and recycling collection routes to reduce contamination, saying that it has contributed to more than $60 million in incremental revenue in the first year of operation.

Speaking on Republic's sustainability investments, Vander Ark provided an update about the company's various initiatives.

"Development of our polymer centers and Blue Polymers joint venture facilities continues to move forward," he said. "Las Vegas Polymer Center production volumes continued to increase throughout the quarter. Construction is progressing on our Indianapolis Polymer Center with initial equipment commissioning underway. This operation will be co-located with a Blue Polymers production facility. We expect construction on this facility to be complete by the year of this year, with earnings contribution in the second half of 2025."

Republic Services broke ground on a production facility in Buckeye, Ariz. to support operations at its Las Vegas Polymer Center. Completion is expected in late 2025.

Renewable natural gas (RNG) projects progressed in the third quarter. Operations have commenced on four total projects, with two coming online in Q3. Four additional RNG projects are slated for completed by the end of 2024, according to Vander Ark.

Fleet electrification

"We currently have 28 electric collection vehicles in operation and expect to have more than 50 EVs in our fleet by the end of the year," Vander Ark told investors. "We have 18 facilities with commercial-scale EV charging infrastructure."

Vander Ark concluded with an update on Republic's $104 million in strategic acquisitions, with an additional $200 million in transactions expected to close by the end of 2024.

"Looking forward to 2025, we expect continued growth across the business supported by pricing ahead of underlying costs, cross-selling our complete set of products and services and capitalizing on value-creating acquisition opportunities," he said. "We also expect financial contribution from the investments made in sustainability innovation, including plastic circularity and renewable natural gas projects. We believe that the fundamentals of our business remain strong and supportive of continued growth in revenue, EBITDA and free cash flow along with margin expansion in the underlying business."

 

Q3 2024 Highlights:

Revenue: $4.076 billion
Operating Income: $845.9 million
Adjusted EBITDA: $1.3 billion
Net Income: $565.7 million
Free Cash Flow: $1.4 billion

Read more about:

Earnings and Outlook

About the Author

Stefanie Valentic

Editorial Director, Waste360

Stefanie Valentic is the editorial director of Waste360. She can be reached at [email protected].

 

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