Clean Harbors (CLH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 11% year-over-year to $1.55 billion, driven by strong Environmental Services demand, successful HEPACO and Noble Oil acquisitions, and pricing momentum.

• Net income increased 15% to $133.3 million, with diluted EPS of $2.46, and Adjusted EBITDA grew 14% to $327.8 million, surpassing guidance.

• Environmental Services segment outperformed with robust demand, margin expansion, and higher incinerator utilization; SKSS rebounded sequentially but faced mixed demand.

• Corporate costs rose due to acquisition-related headcount, incentive compensation, and non-recurring legal/environmental expenses.

Financial highlights

• Q2 2024 gross margin was 33.3%, up from 32.2% last year; Adjusted EBITDA margin was 21.1%, up 50 basis points year-over-year.

• Adjusted free cash flow for Q2 was $84.2 million; cash and short-term securities at quarter end were $493 million.

• Income from operations increased 14% to $215.5 million; capital expenditures for the first half were $273 million.

• Share repurchases in Q2 totaled $5.2 million; $544.1 million remains under repurchase authorization.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA guidance raised to $1.125–$1.165 billion, a 13% increase at midpoint over 2023.

• Adjusted free cash flow for 2024 projected at $350–$390 million; net CapEx expected at $400–$430 million.

• Q3 2024 Adjusted EBITDA expected to grow 20–24% year-over-year.

• New Kimball, Nebraska incinerator on track to open in Q4 2024, expected to add 12% capacity.