Clean Harbors — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue increased 21% year-over-year to $1.87 billion for the quarter ended September 30, 2026, compared to $1.55 billion in the same period of 2025.
• Net income rose 75% to $208.1 million, or $3.93 per diluted share, compared to $118.8 million, or $2.21 per diluted share, in Q3 2025.
• Adjusted EBITDA grew 42% to $456.1 million from $320.2 million in Q3 2025.
• Adjusted EBITDA margin expanded 370 basis points year-over-year to 24.4% (up from 20.7% in Q3 2025).
• Adjusted free cash flow reached a record $323 million for the quarter.
• Income from operations increased 65% to $318.1 million from $193.0 million in Q3 2025.
• Deferred revenue increased 20% due to a backlog of waste and a growing sales pipeline.
• Total assets were $8.28 billion as of September 30, 2026, compared to $7.62 billion as of December 31, 2025.
• Long-term debt, less current portion, was $2.88 billion as of September 30, 2026, compared to $2.76 billion as of December 31, 2025.

Guidance and Future Outlook:

• The company raised the midpoint of its full-year 2026 Adjusted EBITDA guidance to $1.46 billion (range: $1.44 billion to $1.48 billion).
• The company raised the midpoint of its full-year 2026 Adjusted Free Cash Flow guidance to $630 million (range: $600 million to $660 million).
• For the fourth quarter of 2026, Clean Harbors expects Adjusted EBITDA to grow 23% to 26% year-over-year.
• Management anticipates entering 2027 with momentum across both operating segments.
• A 10-year contract announced earlier in the year commenced in Q4 2026.
• The PFAS pipeline remains robust across water filtration and remediation.
• Data center offerings are gaining traction within the Industrial Services segment.

Business Segments and Product Lines:

• Environmental Services (ES):
  • Generated an Adjusted EBITDA margin of 27.4%, marking the 18th consecutive quarter of year-over-year margin expansion.
  • Field Services revenue grew more than 70%, driven by considerable emergency response activity, including one substantial event generating approximately $120 million.
  • Technical Services revenue rose 3% with incineration utilization at 87%.
  • Safety-Kleen Environmental Services revenue increased 11%.
  • Industrial Services posted modest growth despite softness in refinery turnaround activity.
• Safety-Kleen Sustainability Solutions (SKSS):
  • Revenue increased 46% in Q3, with Adjusted EBITDA rising 209% and segment margin more than doubling from the prior year.
  • Group III production increased approximately 20% year-over-year.
  • The company collected 62 million gallons of waste oil while maintaining an average charge-for-oil position.
  • Market pricing for re-refined products remained high amid global shortages.

Market and Competitive Landscape:

• Demand for environmental services and sustainable products remains robust.
• Global supply disruptions are supporting higher prices for refined products, including base oil and lubricants.
• Improving U.S. manufacturing activity and continued reshoring are supporting collection volumes into the disposal and recycling network.
• The company serves a diverse customer base including a majority of Fortune 500 companies across chemical, manufacturing, refining, and government sectors.

Risks and Challenges:

• The press release notes ongoing softness in refinery turnaround activity affecting the Industrial Services segment.
• Management highlights the need to offset inflation and higher fuel costs through pricing initiatives.
• The Safe Harbor statement lists various risks including operational and safety risks, cybersecurity risks, environmental liability risks, regulatory developments, and economic downturns.

Management Commentary and Tone:

• Eric Gerstenberg, Co-Chief Executive Officer, stated that results reflect the strength of the market position and robust demand.
• Mike Battles, Co-Chief Executive Officer, noted that SKSS achieved the highest quarterly revenue and profitability in its history.
• Management expressed confidence in a clear path to achieve record results for 2026 and multiple catalysts for growth in 2027.
• The company reported a year-to-date Total Recordable Incident Rate of 0.49, on track to match the best performance in company history.

Other Key Points:

• Executive Transition: Eric Gerstenberg will become Sole CEO on January 1, 2027. Mike Battles will retire as Co-CEO and Board Member at year-end.
• Acquisitions: The company completed five transactions in 2026, including the ES&H and EnviroServe acquisitions.
• Capital Investment: A $55 million investment is being made in a Los Angeles site to expand the Hub concept to the West Coast.
• Stock Repurchases: The company repurchased common stock for $77.1 million during the nine months ended September 30, 2026.
• Acquisition Spending: Cash used for acquisitions, net of cash acquired, was $689 million for the nine months ended September 30, 2026.