Casella Raises Revenue Outlook as Acquisition Costs Squeeze Profit
The company lifted both ends of its 2026 revenue forecast by $30 million.
Casella Waste Systems (CWST), the waste-management company, reported a 16.9% increase in second-quarter revenue to $543.7 million, as acquisitions, pricing and higher landfill volumes drove growth.
The expansion carried a cost. Operating income rose just 3.6% to $20.0 million, while net income fell 27.6% to $3.8 million as acquisition-related depreciation and amortization increased and interest expense climbed. Diluted earnings declined to $0.06 a share from $0.08, though adjusted earnings rose to $0.40 a share from $0.38.
Acquisitions contributed $46.2 million of the year-over-year revenue increase, including $41.7 million in solid waste and $4.5 million in Resource Solutions. Casella had acquired five businesses representing about $165 million in annualized revenue during 2024 through the quarter.
Solid-waste revenue rose 18.4% to $442.2 million, outpacing a 10.7% increase in Resource Solutions revenue to $101.6 million. Solid-waste pricing increased 5.5%, while total volume slipped 0.6% as an 8.5% rise in landfill volume was outweighed by a 1.4% decline in collection volume.
Resource Solutions recorded a 4.4% increase in price and a 0.5% gain in volume. National Accounts volume rose 6.4%, offsetting some of a 4.4% decline in processing volume.
Adjusted EBITDA increased 12.5% to $123.2 million, but its margin narrowed 80 basis points to 22.7%. Higher fuel costs, partly countered by floating recovery fees, reduced the margin by 40 basis points. Year-to-date operating cash flow rose 15.3% to $161.0 million, while adjusted free cash flow increased 10.3% to $78.1 million.
Casella now expects 2024 revenue of $2.090 billion to $2.110 billion, reflecting acquisitions and higher floating fuel-recovery fees. The company lowered its net-income forecast to zero to $6 million from $4 million to $10 million, while maintaining its adjusted EBITDA, operating-cash-flow and adjusted-free-cash-flow forecasts.
The company also recorded a $1.1 million charge tied to closing a Maine composting facility after a change in state law. Capital expenditures rose to $72.3 million as landfill-development spending nearly tripled, adding to the investment required alongside Casella's acquisition-led growth.