GFL Environmental Inc. - Third Quarter 2026 Earnings Call - GFL ENVIRONMENTAL INC

Hello everyone. Thank you for joining us and welcome to the GFL Environmental Incorporated Third Quarter Earnings Call. Before we begin, I would like to remind everyone that this call will include forward-looking statements within the meaning of applicable Canadian and U.S. securities laws. These statements are subject to a number of risks and uncertainties including those set out in GFL's filings with the Canadian and US securities regulators. Forward-looking statements are not guarantees of future performance and actual results may differ materially from those expressed or implied in the forward-looking statements. These statements speak only as of today's date, and GFL does not assume any obligation to update these statements. This call will also include a discussion of certain non-IFRS measures. A reconciliation of these measures can be found in GFL's filings with the Canadian and U.S. securities regulators. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star one again. I will now turn the call over to Mr. Patrick Dovici, founder and CEO of GFL. Please go ahead, Mr. Dovici. Thank you, operator. Good morning, everyone, and welcome to today's call. I'm joined this morning by Luke Pelosi, and together we will be reviewing our results for the third quarter and updating our guidance for the year. The exceptional performance we delivered in the first half of the year continued through the third-quarter, allowing for another top-to-bottom beat of financial expectations. The ongoing quality and durability of our operational performance, coupled with the closing of secure allows us to raise our guidance for the third time this year and provides for an extremely compelling setup for 2027 and beyond organic revenue growth accelerated 100 basis points over the second quarter driven by core pricing ahead of expectations and 50 basis point improvements in both volume and commodity prices landfill volumes turn positive including both cnd and special waste streams although we believe that construction development and expansionary manufacturing investment remains tempered, we remain well positioned to participate in the eventual recovery of these activities. Volatility in fuel prices continue to impact revenues, costs, and margins. Third quarter diesel prices accelerated another 10% over the second quarter and were over 60% higher than the prior year. Our fuel surcharge mechanisms have proven effective at recovering the direct impact of higher diesel costs, although we are seeing a greater degree of indirect cost increases coming through transportation, spare parts, and other cost categories. Our industry-leading margin expansion would have been significantly greater if not for the impact of these fuel prices. Non-fuel-related cost of sales and SG&A cost intensity trended lower on a year-over-year basis for the seventh consecutive quarter and was achieved despite headwinds from M&A and higher landfill operating costs this ongoing trend highlights the positive impacts from continued improvements in labor turnover and our ongoing focus on cost discipline these benefits are in part rising from process optimization along with the realization of self-help opportunities across our portfolio nowhere are these impacts more apparent than our adjusted even a margin where we delivered an industry-leading 125 basis points of underlying adjusted EBITDA margin expansion. To be able to raise our margin guidance for the second time this year, despite the challenging macro environment and significant headwinds from fuel costs, is a testament to the effectiveness of our strategies. The third quarter also saw us closing in the SECURE acquisition. When we underwrote the acquisition, we were impressed with SECURE's market-leading platform of a difficult-to-replicate critical-weight infrastructure asset in the familiar and attractive Western Canadian market. The transaction was also highly financially compelling, accelerating the achievement of our multi-year financial targets we laid out at Investor Day and enhancing our balance sheet and free cash flow profile to allow our maximum capital deployment flexibility. Since the time we announced the acquisition, we believe that the macro outlook for Secure's business and the markets in which it operates in has materially improved and should provide for further upside to our investment thesis over the medium and long term. integration of the secure business is well underway and we remain confident in the ability to achieve the 25 million of underwritten cost synergies in the near term with opportunity for an incremental 25 to 50 million of previously referenced synergies around disposal and cross selling in addition to secure's physical platform we are equally excited about the people and talent that have joined our team as previously announced alan grant was appointed to our coo on september first. Alan brings a proven track record of operational excellence that directly complements our long-term growth strategy. Across his nearly 20 years at Secure, Alan was instrumental in establishing and implementing the company's strategic direction, including leading through transformational change, driving operational execution, and building high-performing teams. Alan's proven leadership capabilities, extensive experience overseeing a large-scale diversified waste management platform, and his broad skill set will make him exceptionally well-suited to advance GFL's operational and growth goals. Furthermore, with Billy Safara staying on in a senior strategic advisor role, we will continue to get the benefit of his deep expertise as he remains actively involved in leading many of our corporate-wide value creation initiatives. Before I pass the call over to Luke, I will walk through the corridor in more detail. I want to take a moment to discuss the ongoing strategic review. you would have read in the press release that the special committee has provided bidders with a final deadline of november 9th deliver their updated proposals i will tell you that we have undergone a very thorough process we always find it useful to have highly sophisticated third parties come in and take detailed looks under the hood of our business fresh sets of eyes and critical to their perspectives of what they view and while we have found that such processes are time-consuming and disruptive, the strong interest from globally recognized institutions is a testament to both our team and the platform we have built. Assets of this scale and quality have scarcity value. The special committee, in conjunction with their financial advisors, are continuing to evaluate the best path forward for the company. We expect to have a decision very soon, and so stay tuned on that front. However, regardless of the path forward, the confidence we have in absolute earnings growth year-over-year, medium and long-term, should be a source of material equity value creation. While the committee competes its review, our team continues to remain focused on optimizing our proven operating model, including delivering on the investor day commitments of achieving low to mid-30% adjusted EBITDA margins and free cash flow conversion in the mid-40% range. The quality of our base business has never been more solid. The risk-adjusted growth profile has never be better. we have the right assets, we have the right people. We have the proven effectiveness of our execution, and we are going to continue to win. And we are gonna keep fighting until we've done so. I'll now turn the call over to Luke to walk through the quarter and guidance for 2027. Thanks, Patrick. Good morning, everyone. Looking at the details of the quarter, Q3 revenue grew 27% over the prior year, driven by a 5.7% price, a 50 basis point sequential improvement in volume, an incremental contribution from both surcharges and commodity prices. M&A added nearly 19%, mainly from the frontier and secure acquisitions. Q3 volumes were nearly flat, or approximately $10 million better than the second quarter. At the beginning of the third quarter, the restructuring of a large multifaceted recycling contract in Western Canada removed our obligation to provide brokered transportation services on a pass-through basis. This resulted in a $13 million reduction in quarterly revenue, albeit with minimal impact of profitability excluding the impact of just this one contract volumes for the quarter would have been positive 60 basis points as patrick said the volume performance was supported by the return to positive volumes of both cnd and special waste that are landfills cnd landfill tons were up 4.5 the first quarter of positive volume since early 2025 this result was helped by the one-time cleanup of a closed transfer station in western canada but even absent that benefit, C&D volume was modestly positive. Roll-off pulls were flat in the quarter as activity remains tempered. As a result, our volume outlook remains cautious. Q4 volumes are expected to decelerate on the lapping of EPR transition contracts in Canada and exiting certain ancillary services in the Midwest, with underlying base volumes remaining relatively flat to modestly down. Third quarter cost of sales before depreciation, amortization, and integration costs as a percentage of revenue improved 70 basis points, excluding the impact of direct fuel costs, and over 100 basis points when factoring in indirect fuel costs as well. SG&A cost intensity also improved 70 bases points when excluding DNA and transaction costs. The ongoing realization of efficiency and labor in R&M costs, as well as operating leverage on our corporate segment, continues to highlight the effectiveness of the cost optimization strategies we laid out at our investor day. As expected, fuel costs were a drag on operating costs and margins. Average diesel costs were up over 60 percent in the quarter and spiked even higher in the first half of September, which resulted in a $5 million headwind to our original Q3 guide. We now expect the impact of elevated diesel prices to result in roughly $125 million dollars of incremental costs for the year as compared to our original guidance adjusted ebit of margin for the quarter was 31.5 percent 30 basis points higher than expectations and nearly flat with the prior year which was the highest margin in our company's history despite the meaningful headwinds from fuel costs and m a elevated landfill operating expenses primarily tied to leachate transportation disposal costs were also a headwind to margins excluding these headwinds and considering that improved commodity prices were a 20 basis point margin tailwind underlying consolidated margins were up 125 basis points from the prior year adjusted pre-cash flow was 272.5 million dollars over 50 percent greater than the prior year this result was 15 better than guide partially on account of the one month contribution from secure that was not previously contemplated with the closing of secure and the ongoing quality of our financial performance we are once again increasing our guidance for the year assuming current fx commodity and diesel prices we now expect the following amounts for full year 2026 revenue of 8.055 to 8.075 billion adjusted ebitda of 2.49 to 2.495 billion an adjusted pre-cash flow of $1.02 billion, inclusive of cash interest of $455 million and net capex of $910 million. Adjusted EBITDA margin increases 40 basis points over our previous guide to 30.9%, despite the significant headwind from elevated diesel prices, which are assumed to continue for the balance of the year. Absent the run-up in diesel prices full-year margin would have been over 31.5%, an increase of more than 150 basis points over the prior year. As always, the updated guidance does not include the contribution from any further M&A in the year. Our latest guidance represents annual growth of over 20% in revenue, 25% in EBITDA, and 35% in adjusted pre-cash flow, industry-leading growth metrics by a material margin. Even more impressive is the fact that are set up exiting this year gives us a high degree of visibility to produce similar levels of industry-leading growth again in 2027. I will now pass the call back to Patrick who will provide some closing comments before Q&A. Keeping the prepared comments intentionally short today as we think the results speak for themselves, I will just reiterate that our focus is singular and our path forward is clear. We already have a great setup for 2027 and any improvements to the macro environment will be incrementally additive. I will now turn the call over to the operator to open the line for Q&A. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 2 to raise the hand. Press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. if you are muted locally please remember to unmute your device please stand by while we compile the q a roster your first question comes from the line of sabahat khan with rbc capital markets your line is now open please go ahead great um thanks and good morning everyone um i guess thanks for the comments on the where the process stands maybe for you patrick i guess ultimately sort of you founded the company you know have a say in sort of how the process here evolves um maybe you can share some thoughts on ultimately what do you kind of want to do here what are your thoughts on the process that's going on thanks yeah i mean good question um i think ultimately you know we want to keep winning and having fun whether that's sort of publicly or privately um you know i think when you know I look back we're coming up on our 20th year anniversary and we're actually reminiscing the last few days just in terms of you know how the company was founded and you know went out to one of the original sites um and that was employees I mean it's amazing the same employees are there that were there 20 years ago when sort of acquired the first business went back to the same scale that I used to work at on on the weekends and you know we you look at what's been built here it's it's an exceptional team and i look at you know i've looked at gone back and sort of you know scratched my head and looked at the original you know private equity partners and sortofgenuity and healthcare of ontario pension plans and then you know jeffrey keenan and neil aronson at rorke backed us and then scott french mark rubenstein garrett cochran you know backed us with the hbs team which is now sort of at BlackRock, and then you had Ontario Teachers, GIC, and BC Partners backing us in sort of 2018 as private companies. And I look at the returns that were generated, you know, for private equity shareholders and us alone. And they believed in this management team and had the philosophy that winners win and winners will continue to win. And whether we do that publicly or privately you know i think that ability is there for us to continue winning and i look at you know what's going public in sort of march of 2020 i have the tombstone on my desk you know first trade was just over 17 and today we're roughly three times higher than we were in 2020 so you know it's worked publicly as well i mean i think the challenge in the public market is sometimes you have to make unpopular decisions for the short term and you know I look back to this year, secure for some just not knowing what it was, was maybe an unpopular decision. And we had to do that over the last number of years. But over the long run, I think if you look at the equity value that's been created for our shareholders, it's been substantial. And sometimes those unpopular decisions are unpopular in the short term, but over the longer term, we're going to continue to drive material equity value. And so selfishly as a private company, us in the management team would make a lot more money. We'd probably have to not manage the quarter-to-quarter movements if we had the opportunity to spend a little bit more on CapEx because that was the right thing to do or do a little more M&A and bring up leverage temporarily. That makes the business easier to run. The contrast to that is the liquidity opportunities that exist in the public markets. I look back, it would have been very difficult for us to execute on Secure if we were a private company so those are the negatives of that um that being said when prices get dislocated like they were for a long sort of period of time listen there's a lot of smart capital sitting on the sideline that identifies winning management teams with a winning business in a great industry that you know they don't get the opportunity to buy those often and i think you know i look at the stock price today i mean when we give the sort of breadcrumbs for 2027 like you know luke was sort of mentioning you're going to get into i mean today the business is trading at you know somewhere between 12 and 12 and a half times 2027 and you just can't buy businesses of this size and scale for 12 to 12 and that times and you you look back to what we've done since 2020 we're going public but we went public the business was roughly 950 million of ebita today you know the public company is about three you know for 2027 is going to be about 3.125 to 3.150 in that sort of range you have our es business today which you know we look at sort of the budget for 20 27 roughly a 675 million dollar ebitda business of which we own just under 40 percent of and you have the gip business today that's roughly you know per 20 27 is going to be roughly 350 million of EBITDA. So you put all those some of those parts together. We took 950 million of EBITDA and grew it to almost 4 billion of EBIDDA over the last five and a half to six years and tripled the stock price along in an environment where we think the stock from a multiple perspective is materially undervalued. So listen, I sit here, I said a lot, you know, again, at the end of the day, this management team is going to continue winning and having fun you know when i look at now the secure platform that we've added and what's happening in western canada what's happening all over canada we just have multiple levers that are going to drive incremental value over the coming years so whether that's public or private um either way we're going to win and when i Look at free cash flow per share in a normal growth algorithm over the next five years there's no path in which i don't think that free cashflow isn't close to a double so free cash flow doubles over the next five years what is that going to do to our sort of equity value if we remain a public company um and if we go private and because that's the decision that the special committee makes to bring that to a shareholder vote um then you know we have again we've lived that world for 14 plus years as well and we know what that entails but i think i'm fine either way um you know i think there's been a lot of great shareholder engagement which has been great we have a lot of great shareholders and albeit albeit some have different perspectives they're all very valuable um you know input that they have and you know you have a very core group of shareholders that obviously you know who may have a little longer term thinking um in the back of their head and again see the path forward to that there's material equity value creation sitting in front of them and then you have other shareholders that might be a little bit short term that you know are prepared to take some capital at a lower price off the table and find the next opportunity so the the the shareholder engagement we've had over the last couple months has been has been excellent um and it's been you know it's been enlightening and you know the best part is everybody's been very supportive so um you know we'll see how it unfolds over the next week but from my perspective either way is a win um some pros and cons on both sides and you know we'll see where it goes but uh it's been a great exercise to go through anyways with these people sort of looking taking a deep dive in the business so um we'll See what happens great thanks and then maybe just following on the last comment there I guess with the with the new sort of fresh eyes that you alluded to taking a closer look at the business has there been sort of anything uncovered in the Business that you and the management have learned? And then maybe just on sort of the feedback among your shareholders, is that kind of the bigger buckets? Some are thinking maybe, you know, longer term, this thing saying public, maybe just shows a few additional color on what sort ofthe shareholders are coming back to you with as the process has gone on. Thanks. And I'll pass it on. Yeah, listen, I just look at, again, when you have world-class investors that see businesses across multiple sectors, I mean, their input is valuable, right? And I just looked at a couple of tools that were, you know, flagged to us just in terms of that, you Know, when they bring in, again, not mentioning names, but they bring in sort of a chief revenue officer of one of another strategic that is now working as a consultant and coming in and looking at our overweight charges, there's significant pricing opportunity still within the base business. So that, again gives us a high degree of confidence that there's significantly more upside here um implementing tools like harvey on you know contract management and keeping customers accountable to their contracts etc we were just using it specifically on the legal side and picking other tools that'll just again all things that are just additive and incremental to our business that'll make our business better and you know which again just gives us more confidence in terms of the operating plan sort of moving forward and you now again going back six months not to to sort of harp on this but you know the initial reaction when we bought secure was negative from some of the shareholders that really didn't understand western canada or the secure assets you know you had some of these um organizations that were actually looking at that opportunity independently because they loved the scarcity value of those assets and the business that was being built and the amount of organic opportunities that existed to put capital and high returns on invested capital organically sort of in Western Canada. And again, you know, sometimes you need to be in order to be good, you need to be lucky. And we're a little bit lucky just, you know, given the timing of when we did the secure acquisition and then what's happened in the macroeconomic backdrop with, you know, the Middle East and Iran. And now with, you know. As everyone's saying with our new prime minister in Canada, parties, you know, want to make Canada an energy sort of superpower and sort of break down the barriers of the red tape that we've historically had in Western Canada to be able to sort of expand that and put Canada back on the map again. So that will create sort of incremental opportunity. Again, for us, that wasn't underwritten. So all those things give us a high degree of confidence in the plan sort of moving forward. And I think, again, going back to your point on shareholders, yes, you have top 10 shareholders, again, some longer-term thinkers and other shorter-term thinkers. I think shorter term thinkers happy to take less money and sort of move on and look for other opportunities versus, you know, some of our page one shareholders that have a perspective that, you Know, GFL is worth sort of well into the 60s. And if you know you're going to continue executing a plan, which they have no reason to believe we won't, given our track record over the last 20 years, both the GFL side and now the recently acquired secure, you know, that's going to yield an exceptional result as well. And again, free cash flow doubling over the next five years per share, again, you can do the math and what that does to the equity value. And, you know, if we get the multiple expansion that we believe we deserve as we come out of this, you know, potentially this AI trade that has, you know, affected the entire sector over the last sort of 12 months, I mean, I think, you know, you're going to have a winning success of public company as well, but yeah, I think it's been great to have the interaction with shareholders. It's been great to get new eyes on the company and have a lot of great discussions with new shareholders, you know, both in sort of Canada, US, and Europe, as well as Asia and the Middle East. We've had just a lot of great dialogue, and it's great to get a lot of that out there and, you know, put GFL on the map with a lot of different investors. And, you know, I think, listen, whichever way it goes you know we're fine and um it'll just it'll just but we want to bring the process to finality and sort of move on with whatever the decision that the committee and and and you know one of our largest shareholders decides to make so great thanks for the thoughts your next question comes from the line of tyler brown with raymond james your line is now open please go ahead Hey, good morning, guys. Hey, Tyler. Hey, just curious on how we should think about pricing into next year. I mean, it sounds like you've got some inflation creeping back in, particularly in indirect fuel. But how should we think about maybe pricing accelerating into nextyear? Because if I read between the lines, Patrick, it seems that maybe to take private diligence has increased your conviction on pricing opportunities longer term. Just thinking thoughts there would be helpful. Yeah. I mean, I think we have identified sort of incremental opportunity. As you know, we like to under-promise and over-deliver, and I think that's just another lever for us to continue doing that. And again, like I said, when we looked at the sort of value creation opportunities that we laid out at our previous investor day, I think as we just, again, as AI tools continue to come on, as incremental pricing opportunities continue to become on, again that's just additive in sort of terms of the long-term plan. And, you know, maybe that's what was going to wind down in sort of 27, 28, those initial equity value creation plans. Maybe we can now extend them with some of these sort of incremental opportunity and some of the other incremental AI tools that will allow us to, you know, again, have a deeper dive into our actual customer base, looking at what each customer contract has, what we're allowed to do under each one of those contracts, and summarizing it in a form that allows us to basically better manage our business. And, you know, I think this is just relying on, you know, tools that are coming to the market. You know, every day there's a new shiny object, but we're just trying to focus on the four or five things that will actually create that value without a lot of disruption. Tyler, I'd just add to sort of Patrick's comment. If you think about the upside incremental price we articulated originally, we said it was $40 to $80 million to capture over the next sort of, you know, three or four years. That's what we had said yesterday. I think what Patrick is suggesting and we're feeling highly confident in is that prize is something greater than that. Now, the ultimate magnitude will sort of remains to be seen. But I think between 25 and 26, you're seeing our outperformance as we are realizing those, you know, what I call surcharge opportunities. Now, going into 27, you have to remember this year we're getting meaningful support at the price line from some of this EPR-related transition, right? And that you're going to lap in 27. And so I think you kind of got to back that out of your calculus. If our headline price this year is going to be a low six number, if you were to back out the EPR benefits, that'd be more a sort of low five to mid five number. So I think in a headline number, you might not see acceleration, but underlying, we continue to see an opportunity to take our normal course algorithm of pricing at a spread above our cost inflation and then achieving something greater as we are catching up to parity with where our peers are. And I just think the runway for keep adding something greater keeps sort of getting extended as we're sort of going out. Okay. Yes, that is extremely helpful. And then, Luke, just in the release, you guys reiterated your commitment on getting to that mid-40% free cash conversion that you guys laid out at Analyst Day. If I look at your guide for 26, it looks like you're going to be around, let's call it, 41%. And if I put the pieces together, it's a little bit scary. But if I do, maybe that's like 43, 44 next year. I don't know if you could confirm that. So when we talk about that mid-40s, is that more of 45, 46, 47%? Or what is the art of the possible in that number over the next few years? Thanks. Yeah, it is a great question, Tyler. And, you know, you have always been good at math. And, we think that is the sort of direction of travel. Now, I'll just caveat, this year's number of 41, you're getting the last four months contribution of secure, which has like working capital recovery, you know, a little bit of sort of abnormality because it's not a full year, right? So I think if you're really the pro forma where we're at today, you'RE probably more at a 39, 40% number, you KNOW, exiting this year. Now, we go into next year, we think there's going to be expansion on that. Now, I will have a ramp in cash taxes as I'm becoming a larger cash taxpayer, but I see the path of next year being in that sort of 41 to 42 and a half. I think that's what we had articulated pro forma for secure to be and, you know, continue to grow from there. I mean, if you think about the whole 2027 framework, you Know, this year's growth being 20 percent revenue, 25 percent EBITDA, 35 percent free cash. You know, with the setup going into next year, you have the opportunity to almost sort of replicate that. You think about that, I mean, the top line growth organically is going to be mid-single digits. Now, the exact pricing number, exact volume number remains to be seen, but, you know, that's going to be a number greater than five, right? You think of the M&A rollover already in hand, you sort of have 15% in hand. So, you're entering 27 with a 20% plus revenue number. If our 26 guide is 8055 over 8065, 20% growth on that in the next year, that brings you to a 9.7 to 9.8 billion dollar number right now if you look at the margin line you know what we have said and continue to prove is we have you know industry leading organic EBITDA margin expansion so if the industry has been doing 30 to 40 basis points we sort of do 2x that you know it's putting you at a 50 to 60 basis point organic margin expansion the rollover impact of secure should be roughly another 30 to 40 basis point so you have you already a setup for call it 100 basis points of margin going into next year, that takes this year's 30.9%, closer to 32 for next year. So if you take 9.7 to 9.8 billion of revenue at 32, that should be that $3.12 billion of EBITDA that Patrick sort of referenced in his sort of commentary. And then if you apply that sort of 41 to 42% free cash flow conversion, and that's just assuming the normal course drags the EBITda across CapEx interest, et cetera, that puts you at like a $1.3 billion plus free cash flow number. And then I think there's a high degree of conviction in that, and it just sort of grows from there. So we're feeling very confident in that framework we previously laid out. And I think with the avenues of upside we keep speaking to, as you get to 28 and beyond, I'm not ready to sort of cap what that ultimate free cashflow conversion number could be, because I think there's runway to keep going north. yeah extraordinarily helpful thank you luke thanks father your next question comes from the line of kevin chang with cibc your line is now open please go ahead kevin i'm not sure we can't hear you maybe you're on mute okay can you hear me yeah now we can hear you oh perfect perfect um you've alluded to this a few times just um the upside to secure given given some of the the opportunities in western canada just wondering how if you're able to frame that as you think of you know what that upside could be relative to to what you thought at the time of acquisition um you know if you look at some of the projects being proposed? And if all goes well, let's say, you know, you could have a 50% increase in kind of crude oil egress. You know, one, you know, is there a way to frame that upside? And then two, how do you think about your own capacity within Secure to absorb that growth? Or does that require, you know, incremental investments as these development projects move forward? I think it's a combination of both. Obviously, the waste assets we own can continue handling more volume generally um so again that is just sort of all incremental upside and i think again what secure did very well which i think was underappreciated by the public markets was the amount of opportunity they had to deploy capital with a very high returns um for their customer base and as their customer based continues to expand operation that affords the the ability to deploy incremental capital into incremental opportunities at sort of high returns. And again, you know, again, east-west pipelines, north-south pipelines, again that is just going to be, you now, plus a couple together with some of these LNG projects and terminals, all of those are just going to drive incremental activity in western Canada. And can I quantify that exactly today? No. Do I know for sure that that's going to driving incremental volumes? Yes. I mean, you We've seen this movie before, and not only does it only help the secure business, but it'll help all of the industry in Western Canada because it's just, again, the macro sentiment in Western Canada when it's positive, the floodgates open. And I think from a macro perspective, you're going to see a lot of great activity, not only around sort of our business, but even sort of whether that's in the lower mainland or whether it's in Edmonton, Calgary, et cetera, Just that is going to drive incremental volumes and activity throughout the entire sort of region. So, again, that was never the thesis for doing the acquisition because we liked it on its own. But I think, you know, sometimes, like I said, you Know, in order to be good, you've got to be lucky. And I think just given what's happened in the Middle East and some of that tension, I think that's in what's happening, obviously, with the U.S. and tariffs and the Canadian government now looking to sort of you know focus inward versus outward that is driving sort of incremental opportunity and you know we're seeing some of these opportunities already you know I think you know the challenge for us and going back to being a public company you go back to being a private company public market is very prescriptive in terms of how much capex you can spend in a year etc growth versus maintenance etc but I think We have to look at these opportunities the same way we would look at an M&A transaction and what are the returns, what are the paybacks, and bucket some of these growth opportunities potentially as an M & A transaction. Maybe you dial back some of your M& A spends to deploy more capital into some of these organic opportunities that we see that ultimately will drive higher returns on invested capital. So that's something we're thinking about and looking at as a company. And, you know, we, listen, we are going to continue doing what's best for shareholders and what's going to drive the sort of highest return for our shareholders, again, whether sort of public or private. But again, those opportunities are goingto continue to persist, not only in the secure book that we acquired, but also within our existing book, particularly in Western Canada. Kevin, I'd just add, when we underwrite acquisitions, and maybe this comes out of our days of sort of higher leverage, while we look for upside cases, we really want a diligence downside cases, right? and see what that could be in a really draconian negative scenario. And for Secure, while we know very clearly articulated in their performance as shown, they're not exposed to short-term volatility. The downside risk was if WTI went down below $50, $45 a barrel for extended periods of time, that would in time lead to sort of lower production and activity in that part of the world, which could in time degrade earnings. I think where we sit today have the benefit of a very high degree of confidence that over the near medium and probably longer term the opposite is going to be true and the level of activity in production and therefore opportunity for the sort of secure assets is greater than otherwise but so the doctor's point quantifying what that upside looks like today is you know we're not prepared to do it but it's something greater than what our underwriting case was and we were really happy with our underwriting cases yeah and when when renny and alan founded secure back in 2007 the actual year we started remember they started with nothing as well um and organically built that business so i mean i think underappreciated how exceptional the team is there and looking at and identifying organic opportunities to build and scale that business um you know again you will see over the long run that you know this all of these you know if you look at all the regions we're operating in today we'll think you know 10 provinces in Canada, 26 states in the U.S., you know, we have a very unique ability here over the next number of years to really win. And I think you're going to continue seeing it deliver these type of results sort of year over year. That's helpful. Maybe just a follow-up, you know Luke and Patrick, you've highlighted, you know strong organic growth pipeline and levers as we exit 2026 here. Just, you know, with the bigger EBITDA footprint, the step up in free cash flow conversion, you painted, call it a normalized M&A year being roughly a billion dollars of capital deployment. Does that change next year, just given the improved liquidity profile, given some of the acquisitions you made in 2026? Yeah. If we're continuing to be a public company, depending on the stock price, I think, you now moving into 2027, you have the unique ability to add share buybacks you know into a more material way into the sort of capital allocation plan um so yeah i mean that's the beauty of the inflection point of where we are if you look at the free cash flow growth and ramp i mean i think we have the ability to do a multitude of things just depending on where we aren't sort of in the cycle but yes i mean in theory for sure again if we look at the m&a and the organic opportunities that we'll have in sort of western canada we will have materially more capital to deploy with the free cash flow profile now the added secure business into the sort of portfolio and as our business continues to grow we'll sort of look at that so i think we have multiple levers available to us in order to uphold depending on you know what the situation is at the time and kevin i mean as you're well aware but now with the enhanced size and scale the leverage impact of capital deployment is far more muted than it was before And just illustratively, all other things being equal, if you end 26 at mid-threes leverage through EBITDA growth and pre-cash flow generation, you would deleverage sort of 30, 40 basis points going into next year and coming down to sort of a lower threes number. If you deployed a billion dollars into M&A eight times, just for round numbers, you know, that would impact leverage by 15 or 18 basis points. And so just to say the balance sheet capacity to now do that incremental capital deployment has never been greater. And so I think to Patrick's point, just providing us maximum flexibility, being able to execute on our strategies while very squarely adhering to the newer leverage philosophy that we adopted a couple of years ago. That's super helpful. Thank you very much for taking my questions. Thanks, Kevin. Your next question comes from the line of William Griffin with Barclays. Your line is now open. Please go ahead. Great. Good morning. Appreciate the opportunity here. My first one, and I get this may be difficult to address, but Patrick, you've referenced in the past that sort of having visibility to kind of a path to monetizing this incremental equity value creation in the case of a take private was kind of an important factor for you and I think the company. But I'm just curious, how are you thinking about the possible options and maybe how that could be structured now as this process seems like it's progressed a bit further? Sorry, I'm not understanding the question. Monetizing what, sir? Realizing this incremental equity value creation, right? You had in the past talked about maybe potentially IPO-ing the business if it gets, right. Yeah. Oh, I mean, so I think, I mean that's the question i think you know some of these if you're gold private i mean that that's obviously a big question in terms of you create all this value sort of over the next four to five years and then take the business back to market and then public investors would miss out on that sort of value creation over the last four to six years and i think that's a good question next four or five years and get the business back but it's probably 2x the size right if that's the path or you know i think what's you know I think as these private vehicles get more sophisticated and it's more sort of long-dated, non-closed-end funds where it's sort of perpetual equity in continuation-type vehicles where the money is just, you know, there's no closed-end fund nature, maybe the business actually never goes back to the market, right? So, and then just given the amount of free cash that the business generates, you could, you knows, find ways to continue selling down stakes to incremental LPs as they come in at sort of different times. So, you know, I think that's always a challenge in a go private. One of the negatives, I mean, the liquidity, like we talked about, is one of the positives of the public market. You know, the negative part of the private market is there's less certainty on sort of liquidity at various points in time. Now, that's more of a Patrick issue. I think that is solved for employees in other ways. I mean, we've done that for 14 years, so this is not an employee issue. This is just like, hey, you know, how do you monetize sort of your 28-plus million shares over time? I'm not a seller, so it's not really 47 years old. That's not real. I'm looking for Freedom 55 or Freedom 65 yet. But, yeah, I think, you Know, over time you need to think about that in the event that I was. But, you know, I think there are products available that allows for that under these new constructs. All right. Appreciate that, Collier. Thank you. And my follow-up here, you referenced an increase in landfill operating costs in the prepared remarks. It's not the first time we're hearing about that this quarter. i'm just curious sort of what what are the drivers there and and how are you thinking about your ability uh to recover those uh through price and and you know to the extent there's any lag um you know potential margin impact yeah well i mean i think starting point i mean a lot of people talking about leachate it was very wet in many areas right and that just you know a quarter over quarter difference that you know michigan had x inches more rain than last year that can drive incremental leachate. So that's part of it. But I think what you're also just sort of seeing is as leachade management processing centers becoming more front and center, people are getting more sophisticated with where leachates should be going. Sometimes that's incurring further transport costs to get it there and the sort of like. So I think this quarter isn't necessarily reflective of a structural material ongoing headwind. It was about $6 million in this quarter. Maybe sort of three quarters of that is, I'd call it more sort of timing one time, and sort of quarter of that cost is just sort of incremental cost of trans and processing. But I think we have the benefit in an industry that we all sort of suffer the same fate, if you will, and that as incremental regs or other reasons drive operating costs higher, we need to recover those. And you'll see us through our various pricing and other mechanisms ensure we're getting appropriately compensated for these sort of critical services that we're providing. So I think longer term, like anything, an incremental sort of cost will just add to the broader base of cost inflation on which we used to set our overall pricing. But in a given quarter, you can get some mismatch between that cost incurrence and subsequent price recovery. But in time, I wouldn't expect you to have the same sort of headwind that you had, and you'd be pricing above your cost inflation as we do for all of our costs. Your next question comes from the line of Trevor Romeo with William Blair. Your line is now open. Please go ahead. Hey, good morning. Thank you guys for taking the questions. I had one on Secure, kind of the performance in the quarter, wondering if you could maybe talk about how much it contributed in terms of revenue and EBITDA and anything you can kind of say on the volume price split or just the core disposal business versus maybe some of the other businesses in the quarter? Yeah. So, I mean, again, we have one month of secure revenue contribution. It was around $150 million of revenue. You know, it was just over $50 million of EBITTA. So sort of, you know, mid-30s plus EBITMA margins. and he had like 25 to 30 million of the free cash flow performance came from Secure. Now, sort of one month I don't think is actually reflective, right, from a CapEx timing, working capital timing, et cetera. But I think the contribution, you know, Secure's profile for the year was they're going to do sort of $550 million of EBITDA, you know $1.5 billion of revenue and, you know, I think they're very handily positioned to sort of being able to deliver that. You know, the distribution of that revenue across their services is, you know, as we've previously sort of articulated, you have a small sort of percentage of overall profitability coming from the sort of other lines of specialty chemical and energy infrastructure. But the majority of those revenues is their typical sort of waste and waste processing. And so I'd say sort of right in line with expectations. You know the team's Q4 outlook is, in line, with expectations and we're finalizing budgets into 2026. seven, but no, everything is turning out as anticipated with the opportunity for upside that we were previously speaking about. Okay. Thank you, Luke, for that. And then maybe just a quick follow-up on kind of the follow-ups, I guess, on M&A looking into next year and beyond. I mean, if we're kind of thinking about a higher interest rate world, I'm just curious for your thoughts on maybe how that influences, you know, your kind of aggressiveness on M&A as well as maybe the willingness among targets to sell. If that's another incremental headwind for them, is that kind of an incremental positive for you with maybe more targets coming to market? Yeah, I mean, I don't think it's material enough that it really affects that much. I mean, yes, been moving in interest rates, but, you know, when I look at our borrowing costs, like sort of in a worst case today, you're probably 100 to 125 basis points wider today than you were maybe six to eight months ago. But from our perspective, that's not a forever thing, and we have mechanisms that, you now, I think can reduce that with swaps and other things for the longer dated swaps. So, again, it's something to think about. I don't think it's sort of that material. And, you know, I think when I look at some of these, you know, larger recent sort of businesses that have come to market that have sold on sort of the ES side, I mean, you have ES businesses still continuing to trade at large size and scale, you know, between 13 and sort of 15 times, depending on sort of the market. And so I don't think it's really materially affected values all that much. But yes, something to obviously keep in consideration. And I think if we think there's going to be perpetually higher rates for a long period of time, then that may factor into that but again when we look at the running that model we obviously we obviously when we're looking at our returns we model in what the actual cost of capital is so it does get factored in and and but you know we have to take a longer term view on what we think rates are going to do but yes it factors in all right thank you guys appreciate it your next question comes from the line of stephanie moore with jeffries your line is now open please go ahead Good morning. Thank you. Maybe taking a step back, and I appreciate all the color you provided us so far on this call, but let's just say if it does turn out where GFL ultimately remains public, I guess what should investors expect the next chapter of the company to look like? I guess thinking what are the key strategic and financial priorities that you think can help drive the re-rating you believe I think the company deserves? Thanks. Yeah, hey, Stephanie. It's a great question, and I think the reality is, whether it's a sort of public vehicle or private vehicle, you know, our path forward is relatively the same under both, and it's really executing on all that we articulated at the investor day and, you know, and more. And I say and more because today we've largely achieved those sort of three-year targets we've put out, so we're just sort of resetting and going into higher levels from there. But, you Know, it starts, as I've said always, you think about the algorithm, it starts at the top line, and Patrick articulated this, but the industry has a very sound and stable top-line organic growth algorithm, and we believe we have an idiosyncratic opportunity to do better than that very attractive industry algorithm as we benefit from the self-help that's available to us. Now, that's mostly from price, but you've also heard us say we believe our market selection should drive incremental volumetric opportunities as well as we benefic from the fact that in the You know, Western Canada, what should be our, you know, passing there over the next sort of near and medium term. And then the U.S. Southeast where preponderance of our businesses just has the demographic benefit of being a place where sort of people are moving to. So we think top line, you now have a right to sort of win there organically. And I'll speak all this organically before I talk to M&A. Then you look at the EBITDA margin side. I mean, if you think about our EBITDA margin performance over the past, you know, call it five, six years that we've been public or 10 years, you want to take, I mean we've continued to produce outsized EBITTA margin expansion as we've demonstrated the efficacy of our strategies. And we see runway to sort of keep doing that, right? I mean you think of our results today, achieving, you just gave a guide for 27 of these bread and crumbs there too, you're very squarely past the low 30s and moving towards mid 30s. and we see a lot of runway to sort of keep going there. The most exciting part of it for us is this inflection point that's been reached, though, at the free cash flow level, right? And really what that is is now that you're sort of past the deleveraging hump, if you will, as you go forward and you sort of effectively maintain an interest expense intensity on a relatively sort of flat basis to diminishing, you're getting significant idiosyncratic torque at the fee cash flow line that is available for GFL and GFL alone. And so you put that all together over the sort of next three to five years, as Patrick suggested in the prepared remarks, you don't need to believe a lot to see close to 2x in a free cash flow per share level over that sort of period of time. And that is really what the next chapter is. You know, we've built the business together, pro forma, we're secure. We now have the balance sheet scale and the free cash flow profile to be able to very squarely execute capital deployment strategies without any longer having to, you know, be tempered by the sort of leverage considerations and just doing more of the same and now doing so, you Know, with a sort of best in class asset base and, you know, a management team that has proven the effectiveness. You know we welcome Alan to the team that brings incremental horsepower and we're just, you know very excited and confident in the sort of go forward opportunities to just keep doing all of the items that we've articulated thank you appreciate the time your next question comes from the line of brian bergmeyer with city group your line is now open please go ahead hey good morning thanks for taking the question um during the prepared remarks, you flagged $125 million, I think, in inflation from diesel. I'm just curious how much of that you expect to be kind of passed along effectively in 2026, and then if you see any kind of lingering catch-up in 2027. Yeah, Brian, great question. So if you look at it on direct diesel costs, what we sort of pay for the way, we have about $105 million incremental costs, and then indirectly we calculate, and this is like third-party transport providers, etc., but another 20, 25 million. So you've got about 125 million of cause. We're going to recover this year about 105, 110 million dollars of that. So, you have this sort of 20, 25 million dollar exposure, which is really a function of those quick ramps, right? Because you take a month like September, where diesel jumps up very quickly mid-month, you have that sort of exposure. You don't get to recover it, and ultimately, until it rolls over. So, we do feel confident in time when diesel rolls over, assuming that that happens, you will recover that incremental $20, $25 million. But if you think from a margin profile for the year, where we estimate diesel cost, and it's really that $25,000,000 exposure plus the recovery of the other $105,000 to be roughly a 75 basis point margin headwind this year. If we would have had full recovery, that would have been a 40, 45 basis point margin headwin. I think that's consistent with what some of our peers have spoken about. And I thinkthat's more a reflection of the maturity of their recovery programs. And that's just more opportunity for us. So we do feel confident that we will recover that when it rolls over. And as we continue to refine and mature our own surcharge programs, we'll be even sort of better protected as we go forward. But ultimately, diesel rolling over will be a margin tailwind for us got it. Got it. Appreciate that detail. And then just maybe following up on kevin's question you know is there anything that you would like to to highlight on growth capex for 2027 maybe for you know either legacy gfl or secure i know it's you know quite a bit early so you know no worries if you if you don't want to comment but uh you know to cure i think it's been spending over 100 million per year so just curious if there's anything in the pipeline there thank you i'll turn it over yeah i think that's probably you know we're still obviously looking through all the opportunities i think legacy gfl probably has another 50 to 75 million dollars of you know the final ramp and sort of growth capex for sort of epr and rng so that's winding down and then for secure again putting all of the opportunities in the blender i think that's probably a safe number to continue to use but again like i said before we're going to think about the growth caplex spend similar to the way we would think about an m&a transaction at secure and if there's high growth opportunities with high returns on invested capital we'll look at that exactly the same way we look at an m&a transaction we'll bucket those spends together and when we think about how we allocate capital we allocate that in that in that capital bucket so yeah so again a lot of opportunity still early days but obviously when we come out in february when we report q4 and give you know detailed guidance for 2027 we'll a better handle on exactly what we want to do your next question comes from the line of kanark gupta with scotia capital your line is now open please go ahead hey good morning uh i want to go back uh to the strategic review process uh and in fact i wanted to understand uh you know in a simplified manner i guess like what's the process looking like you know i mean how will it unfold here you have november 9th that's a deadline by a special committee uh you know i think if you see the bids and the updates come through by that deadline uh like what's the next steps gonna look like after that um and then uh will there be any uh you know potential i would say uh ebbs and flows or hoes with respect to uh bondholders uh in that process so any color will be there yeah i think these transactions are very complex again we've done them multiple times obviously a little bit trickier as a public company as i've said over and over again i'm not a seller so i'm hot really part of the process or you know the negotiation of whatever that is you know you have other potential insiders that would potentially look at selling a whole or part again that comes with its own set of complexities um and then you have a special committee that needs to arrive at a place that they feel comfortable that they can stand behind with their advisor in terms of coming up with what they believe you know is is a number that represents fair value so all of those things sort of have to align um there's nothing more we can do as a company from a diligence perspective people just have to arrive now at at an answer that works or doesn't work um like i said i'm i'm conflicted because at the end of the day i'm not selling so um it's in someone else's sort of hands and and you know ultimately that that decision will be made but you know the process from my perspective has been very good on a multitude of fronts as a public company or a private company. Learning more about our business is always good. Having smart people look at your business is always good. We've had a significant amount of engagement with our public shareholders that we probably wouldn't have had if it weren't for this process. And we've had the opportunity to have a lot of dialogue with new potential shareholders around the company. So listen, it's been good. It's been a lot of work. It has been time consuming coupled together with everything else we've been working on um but you know no one in this organization shies away from hard work um and you know we're just going to continue doing the right things and you know see how the process unfolds over the next week but from you know from my perspective management's perspective like we just want to get on with it it's it's got to come to a conclusion um and we need to move on and sort of put the chapter behind us sort of one way or another um and you that hence the reason why sort of a deadline of november 9th i think you know it's not easy to get all these different groups together and you know we've been in toronto the last couple days where everyone can actually sit down and have you know fruitful discussions and real discussions about sort of where things are at and what needs to be done and you know hence we we put a pin in it we feel confident that by november 9th we can put a pain in this one way or the other Again, I appreciate the call there. Thanks. And if I can just follow up, Luke, on the guidance bridge. So you can see, I mean, your guidance has moved up on the back of recent acquisitions, obviously. I mean looking at, if I look at the incremental margin on the guidance change, it's like 37% EBITDA margin and 59% cash flow conversion. I'm suspecting most of that is driven by secure uh is there anything outside of secure that contributed to to the guidance change for the whole year yeah connor uh thanks for the question i mean obviously a lot of moving pieces like from the original guidance um you know with where diesel has gone fx has been bouncing around in the recovery from commodities but if you think about you know from From the beginning of the year, if you think about the top line, originally revenue was supposed to grow just under 6%. 5.8% was our original guide, and now we're saying it's 22%. So you effectively have 16% incremental revenue growth versus the original sort of guidance. So the 13% of that's coming from M&A, and 7.5%, 8% of the 13%, or just under 15% is from Secure. You have 180 basis points from FX, sort of the Canadian dollar weakening. And therefore, you're left with like 120 basis points of, you know, what I call organic, right? Now, that's mostly diesel recovery and commodities as price and volume are sort of a wash, right, price is 40, 50 bps better and volume is sort of 60, 70 bps negative, so a bit of a sort of wash. That's really what's happening at the top line. Now, if you flow that down to the EBITDA line versus our original guidance, the original guidance was just under 8% EBITTA growth, so I think 7.8% EBIDTA growth. But then now we're saying 25% and change, right? So you have roughly 17, 17.5% incremental EBITDA growth. Now, again, sort of 14.5 of that is coming from M&A, and that is a large contribution from Secure. You have 180 basis points, again of FX, and you have about the 100 basis point benefit from the commodity price. Now, diesel, as I was saying to Brian, is about 125 basis point drag to EBITD dollars for the year. And so, again, that leaves roughly 100 basis points of just pure incremental organic EBITDA growth. And that's really the sort of margin piece that you have coming through. So, obviously, secure, you know, is driving a component of this and taking that margin profile up. But, you Know, there's a lot of other sort of pieces, including the underlying just organic margin expansion from a bunch of the, you know, cost levers and other optimization that we've been talking about, you know, on this call and previously. Yeah. That's great, Cliff. Appreciate the time. Thank you. Your next question comes from the line of Jerry Revich with Wells Fargo. Your line is now open. Please go ahead. Hey. Thanks for taking the question. This is Jake Kooyman on for Jerry. So on the RNG EBITDA, I was just wondering whether you could comment on where it sits relative to the $125 million to $150 million range, and what are the in-service dates for the remaining facilities and roughly you know how much rng capex remains in 2027. thank you yeah so i think we're again like we said somewhere between 50 and 75 million some of that's epr but we probably have another 50 to 60 million depending on the structure of the rng projects you know we expect the in-service dates for those to sort of come on late 27 through 28 and we have about half of that that R&G EBITDA contribution in the P&L today and that other incremental half to come over the course of sort of on through late 27 and through early 28? Yeah, I think the in-year, so, I mean, what we said this year, $50 million in- year EBITda this year from R&D, that's roughly right. We're actually a little bit behind, but they're actually there. You know, the next four projects that come on, to Patrick's point, they'll be on the end of 27, probably no contribution in 27, just contribution in 28. That's another $40 to $50 million of the EBITDA, and then the last four small projects is that remaining sort of $15 to $25 million of EBITTA that comes on, you know, into 2028. As Patrick said, the CapEx for that has mostly been manifesting through contributions into JVs, but the exact CapEx spend and the form thereof will be clarified for a 27 guidance. Great. Thank you. Appreciate the color. Your next question comes from the line of James Shum with TD Cowan. Your line is now open. Please go ahead. Hey, good morning. If you guys go private and then double the size of the business over four to five years, can you talk about the challenges, if any, of going public again? You went through that process, I don't know, six or seven years ago. How onerous would that be to go through that IPO process again? I mean, it's always, I always say it's very simple. It's, again, why you have to have an operating plan. You can look at a business, you can buy a business. You can put whatever plan you want on a piece of paper, but then you have figure out actually how you're going to monetize that. I think it's really just a function of how much leverage do you want to use as a private company and i just say that's the biggest impediment to sort of going public and going public at the right price i mean we live that um you know at the time when we went public with a 950 million dollar ebit of business when we're public in 2020 we do a very large ipo because the business we are operating the business six and a half seven thirds of leverage we have to use we have to do a three billion dollar ipo which is a very larger ipo today now a large ipos six years ago to today, I mean, when you're talking about IPOs of $75 billion to $250 billion, you know, maybe we're in a different market. But from my perspective, listen, if the public markets want to see leverage, you know somewhere between three and a half and four turns, right, initially out of the gate, you just have to back solve for what that looks like in terms of an IPO. And again, do you want to run the business at six turns of leverage and then have to do a take out two turns of leverage on an IPO and if the business is call it six billion of EBITDA that means you have to fund to do a 12 billion dollar IPO to deliver or do you want to run the business with four and a half or five turns of coverage where you only have to do you know a four billion dollar IPO to get into that zip code where investors want to see leverage for the longer term so again you can back solve for that you can underwrite that in your returns you can Do you have to run the business with three and a half turns of leverage? No, but I think as a private company, you wouldn't run the business with five and a half to six turns of leverage. I think you would keep leverage at four and a half-ish to five turns of toggle between those as a private company. And then that sets up a very reasonable IPO if you want to re-IPO the business in four or five years. The other thing is, you know, there is material free cash flow that comes off of this business, right? So, you know, you're going to have a A turn of leverage doesn't do much. Like, if you're thinking about an incremental turn of leverage, which is what's called $3 billion today, you know, to borrow an extra $3 million at sort of, you know, an interest rate of sort of 5% to 6%, you're talking about only an incremental $150 million of interest costs to run that incremental turn-of-leverage. It's not a material number, and the business still spits off you know hundreds and hundreds of millions of dollars of free cash like that which would afford you the ability to delever and grow at the same time as a private company so um you know a lot of different paths but nothing uh again i think that's just the biggest impediment to maintaining that and obviously you know what you don't want is to have a bunch of scorched earth uh public investors today that think they were slighted and then the business comes back to the market at 2x the value so finding the fair value today would be a very important part because the last thing i'm 47 years old i have no interest in burning a bridge with public investors although you know i believe it's trading at a material discount today but again those same anchors that are our top 10 shareholders today would have to be our same 10 top 10 or top page one shareholders if you were going to re-ipo so i think that's an important thing to do and i'm cognizant of that if that is the path chosen. So, yeah, that would be the only real impediment. Okay, great. And you actually answered my next question with that as well. Maybe just going back to the M&A, sort of what you're seeing there, are you seeing any, like we're hearing that maybe there's more, and I'm talking about specifically solid waste M&As, Are you seeing more competition for deals on the solid waste M&A space? Are you seen more like private equity competition? And is that sort of maybe driving up valuations? I mean, I've seen more private equity around ES assets with the recent run up over the last year and a half, two years and sort of clean harbors execution. And the fact that they're multiple today is probably trading at a higher multiple than a bunch of the solid waste sector, which has driven confidence on the ES side. That may be on the environmental services business. Things are where solid waste was maybe 15 to 20 years ago. So consolidation opportunities, you know, have stepped up. Now, that being said, I've seen valuations in that business move up on large scale assets. I think if you think about businesses that are historically what we do is acquire businesses one to 10 million of EBITDA, I haven't seen, you know, much of a change in that size of business. where you've seen some change, I think, is in the upper end of the range when you're talking about businesses that are, you know, 75 to 100 million of EBITDA, where you're seeing valuation step up because you have a private equity firm that could potentially get a management team and look to use that as a platform and then buy down that multiple with incremental less expensive M&A, right? So I think that's where you are seeing it. I don't really see it in terms of what our core business and what we do sort of every day. Got it, very helpful, thank you. Your next question comes from the line of Shlomo Rosenbaum with Stifel. Your line is now open, please go ahead. Hi, good morning. Thank you for taking my questions. Patrick, I want to ask you a little bit just about the impact of diesel more broadly. You talked about some of the indirect costs in terms of some transportation and some parts. But are you seeing any of that creeping into broader stuff like labor? And how are you thinking about that in terms of going into next year? We talked a little about pricing, maybe pricing coming down, and we've seen pricing come down since the last inflation run-up. But should we start to think that maybe that could start going the other direction in response to some potential inflation that's building because of the season? Yeah, I mean, listen, I think, again, quick movements in fuel, you know, knee jerks, you're going to have to push through price. I mean I think going to Luke's point, you now, annualized impact probably $125 million, we've recovered, well, we will recover 90 to 95 to 100 of that, so you know there's a little bit of a lag sort of on municipal contracts and other things. I think, like other businesses that have a transportation component to their business, again, whether it's parts, whether its long-haul trucking, again, they're going to need to recover that. So those indirect costs will have to be recovered. So depending on what happens with fuel, yeah, that could yield the incremental price that we need to put through in 2027 versus what we thought maybe three to four months ago. But again, the industry, you know, whether itís waste connections, whether Itís waste management, whether it's Republic, whether it's Casella, whether it's the large independents or the smaller independents, we're all in the same boat. And I think the industry has shown a very good discipline around pricing and having to price appropriately to cover our sort of internal cost of inflation. And you saw that through COVID as, you know, internal cost inflation declined, pricing came down. If inflation goes up, we will price accordingly and we will do so in a disciplined fashion. No one is doing it in an egregious nature and i think that's why people love waste and you know you look at the results again waste connections printed an exceptional quarter waste management from my perspective printed an exceptional quarter i mean the industry is doing exactly what it's supposed to do in the face of whatever challenges is being thrown at us you know a couple years ago it was labor you know and now this year it's fuel um you know i think whatever gets thrown at we can handle we can adapt to as an industry. And, you know, that's what we'll do. Okay. Thank you. Just for a follow-up, maybe, Luke, I think you talked about a $13 million contract that you exited. And I was wondering if you could give a little bit more of a description as to what it was. And it seems like it wasn't providing much profitability. So it sounded like it was somewhat empty calories. But is that the same type of impact of $13 million that we should expect or what's being incorporated in the guide for next quarter as well? Yeah, that's right, Shlomo. It's a contract where we provide a whole host of broad-based recycling-related services. We used to have a meaningful transportation component whereby we were coordinating third-party trans and effectively just passing that through, being a broker on that piece. As part of the restructuring of the contract, we're no longer doing that component of it. So although, you know, this $30 million of gross revenue is going away, the profitability of that was de minimis. And so you'll have that same impact in Q4 as well. And so I think I said in fair remarks that Q4 volumes will decelerate and it'll be negative. But, you Know, a big component of that is, again, just that $13 million again. And if you back that out and some other sort of puts and takes, you really have just this base underlying volume kind of being sort of flattish. Male Speaker 1 All right. Thank you. Male Speaker 2 Your next question comes from the line of Chris Murray with ATB Cormac Capital Markets. Your line is now open. Please go ahead. Chris Murray Yeah. Thanks, folks. Good morning. Maybe just turning to some of the subs, especially GIP. You know, when we listen to you talk about the process you're going through right now, I wonder if it changes your opinion of the infrastructure business, especially as we've seen multiples in the construction space move up, and just trying to get a sense of what you would think fair value is on that. I know you guys mark the market, the earnings, but just any thoughts around GIP or even the ES business would be helpful. You know, I think, again, multiples, I'll start with the yes, you know, I think again, the operating plan was very straightforward for that business. We had a five-year plan, carved that business out, was doing 475 to 500 million of EBITDA inside the public company. Today that over the last year and a half to two years has grown to 675. Over five years, we had a plan to grow that business to roughly a billion dollars of EBIDDA and have roughly five turns of debt on that business. Now, those businesses today are trading between 15 and 16 times. So do I want to do something with that business today? Absolutely not. I think that would be very short-sighted, given the operating plan and the plan we have for that business to continue growing that business over the next, you know, two and a half to three years. But again, you run that math, take a billion of EBITDA, put a 15 to 16 times multiple on that it'll have roughly five to five and a half thirds of debt there's you know call it 10 plus billion dollars of equity value sitting there of which we own you know 40 if we buy it back at a fixed multiple of 1.8 times right that we would the existing shareholders in that roughly you would have you know again five billion in debt you would owe those other shareholders roughly sort of $5 to $5.5 billion. You'd have $10 billion. You'd add $5 billion to $6 billion of equity value to that business and call it two and a half years. GIP, you know, again, we carved that business out just doing over $200 million of EBITDA today that's grown to $350 million of EBITDA, has a very robust acquisition pipeline, a very large organic pipeline given the amount, given where we've specialized our work in. you know we've won multiple projects you know that are coming online we recently got a quarry permanent in newfoundland that's going to supply a lot of the northeast into the u.s all the way down to florida um you know corey that'll probably generate somewhere between 25 and 50 million of ebitda depending on how much volume we bring out of that quarry there's just a lot of upside in that business again plan is to grow that to sort of 500 to 550 million of ebit and and then look to sort of, again, monetize a big chunk again. But again, we're two to two and a half years away from doing that on both of those businesses. Yes, you could do it sooner, but I don't see any reason why we would do that today and not continue executing that plan. And again, like I said, I think between those two businesses over the next two and half years, you probably have in the neighborhood of $6 to $7 billion that will come back to GFL shareholders of value that will be created in those two businesses alone, on top of the value that we create inside the public company. Okay, I'll leave it there. Thanks, Jack. Your next question comes from the line of Adam Bubes with Goldman Sachs. Your line is now open. Please go ahead. Hi, good morning. I'm wondering if you could just talk about your assessment of runway for M&A in the U.S. and relative attractiveness of the opportunities for Canada. And then without the public market scrutiny, how much M&E would you have the capacity and could you pursue based on the opportunity pipeline if you were private? Yeah, I think, again, if you're going to stay within the normal algorithm, right, If I roll out to 2027, I think, you know, between organic CapEx spend and M&A spend, you can, and again, share buybacks, you could probably today, back of the envelope math, probably deploy 1.3 to sort of 1.4 billion and stay within sort of the leverage targets that the public investors want. And over the next three to four years, as the business continues to grow, that number grows, right? So I think over the last three or four years that number will grow somewhere closer to $2 billion that you could deploy, right. I think as a private company, if you had less of a focus on sort of leverage and maintaining those targets, I think that 1.3 to 1.4, you could actually deploy somewhere between $2 and $2.2 billion a year. year and that number would grow as the business grows so i think you basically have a six to seven hundred million dollar a year delta versus what you could spend as a private company versus a public company if you didn't have the scrutiny of maintaining that sort of leverage target so i think that's really the real delta and over a five-year period you spent an extra six to seven hundred million you know you're basically spending an incremental three billion dollars over that period um and obviously at the private company you would spend you wouldn't be spending any money on share buyback so you can if your share buybacks became a part of your capital allocation framework um you know you would be using that for growth projects versus um share buy back so i think that's the real that's a real delta over the next five years got it that's clear and then um luke you talked about adjusted free cash flow conversion uh potentially getting above 40% next year. When we just think about the flow through to discretionary free cash flow, how much of that $1.3 billion of adjusted free cash low could you actually realize on sort of an unadjusted basis? It sounds like there's $150 maybe plus million of CapEx. Any other big moving pieces we should be thinking about on that bridge. Yeah. And we're going to have to wait to 27, as Patrick said, you know, evaluating growth capex, that'd obviously be a piece of it within secure. As you think about that bridge, but otherwise, you have the normal course items we've talked about before, right? You have leases coming off of that. We will have some integration costs, et cetera. So I think, you Know, I know there's been focused on the Delta between unadjusted and adjusted. You know, this used to be a focus at our EBITDA line. And as our EBITA grew, the relative impact of those adjustments staying flat on a you know degree of importance just diminishes and the same thing is happening at the free cash line now i mean the overall lease and other costs that are a drag against that you know do not grow at the same rate as the free casual base and you're going to get operating leverage on that you have to wait till 27 official guidance where we'll have the specific pieces great thanks so much there are no further questions at this time i will now turn the call back to mr dovigi for closing remarks. Thank you, everyone, and I look forward to connecting with our Q4 results. This concludes today's call. Thank you for attending. You may now disconnect.