Casella Waste Systems (CWST) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $377.2 million, up 30.2% year-over-year, driven by acquisitions, organic growth, and strong pricing in collection and disposal.

• Adjusted EBITDA for Q2 was $91.6 million, up 26.9% year-over-year; net income was $7.0 million, a 27.6% increase from Q2 2023.

• Five acquisitions completed year-to-date, expanding the operating footprint to 10 states and adding over $100 million in annualized revenue, with further acquisitions post-quarter in the Mid-Atlantic.

• Integration of new businesses and operational improvements remain a focus, with a strong M&A pipeline.

• Margin headwinds from higher leachate, employee separation, and integration costs impacted results.

Financial highlights

• Q2 revenue was $377.2 million, up 30.2% year-over-year, with $70 million from acquisitions and $17.5 million from organic growth.

• Adjusted EBITDA reached $91.6 million, up 26.9% year-over-year, with $18 million from acquisitions.

• Adjusted net income was $12.5 million, down $6.3 million year-over-year, impacted by higher intangible amortization from acquisitions.

• Net income for Q2 was $7.0 million, up from $5.5 million in Q2 2023; basic EPS was $0.12, adjusted diluted EPS was $0.22.

• Net cash from operating activities for the first six months was $79.8 million, down from $83.2 million year-over-year due to working capital and higher interest.

• Adjusted Free Cash Flow for the first half was $39.5 million, compared to $47.9 million in the prior year.

Outlook and guidance

• Full-year revenue guidance raised to $1.52–$1.55 billion and Adjusted EBITDA to $360–$370 million, reflecting acquisition contributions.

• Adjusted Free Cash Flow guidance reaffirmed at $140–$150 million.

• Net income guidance lowered to $15–$25 million and net cash from operations to $245–$255 million, due to higher acquisition-related costs.

• Expect solid waste volume to be down 1%-2% for the year, with price growth at the upper end of the 5%-6% range.

• Management expects existing cash, cash flows, and credit facility to be sufficient for at least the next 12 months.