10-Q: Clean Harbors Q1 2026 Earnings: Revenue Up, Net Income Rises

Clean Harbors reports a 1.9% increase in total revenues to $1.46 billion for Q1 2026, with net income rising 7.7% to $63.2 million.

Summary

• Total revenues for the first quarter of 2026 reached $1.46 billion, a 1.9% increase compared to $1.43 billion in the same period of 2025.
• Net income for the quarter was $63.2 million, up 7.7% from $58.7 million in the first quarter of 2025.
• Adjusted EBITDA increased by 5.5% to $247.9 million, driven by growth in both the Environmental Services and Safety-Kleen Sustainability Solutions segments.
• The Environmental Services segment saw a 3.6% revenue increase to $1.25 billion, while the Safety-Kleen Sustainability Solutions segment experienced a 7.1% revenue decrease to $207.0 million.
• Net cash from operating activities improved to $6.3 million from $1.6 million in the prior year period.
• The company acquired certain environmental businesses from Depot Connect International for $131.8 million in March 2026.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive filing, with revenue and net income growth, and improved operational metrics like Adjusted EBITDA. However, the decline in the SKSS segment and increased investing cash outflows due to an acquisition temper the overall positive sentiment.

Positives

• Total revenues increased by 1.9% to $1.46 billion in Q1 2026.
• Net income grew by 7.7% to $63.2 million.
• Adjusted EBITDA increased by 5.5% to $247.9 million, indicating improved operational performance.
• Environmental Services segment revenue increased by 3.6% to $1.25 billion, driven by Technical Services, Safety-Kleen core services, and Field and Emergency Response Services.
• Net cash from operating activities improved significantly to $6.3 million from $1.6 million.
• Adjusted EBITDA margin for the Environmental Services segment increased by 50 basis points, and for the SKSS segment by 320 basis points.
• Interest expense decreased by 6.2% due to lower interest rates and debt refinancing.

Negatives

• Safety-Kleen Sustainability Solutions (SKSS) segment revenue decreased by 7.1% to $207.0 million, primarily due to lower pricing of base and blended oil products.
• Industrial Services revenue within the Environmental Services segment decreased by $19.8 million due to lower demand for industrial maintenance and turnaround services.
• Cash used in investing activities increased by $102.4 million, largely due to the $131.8 million acquisition of Depot Connect International businesses.
• Adjusted free cash flow was an outflow of $75.8 million, compared to an outflow of $115.7 million in the prior year, indicating continued cash burn in investing activities.
• Corporate SG&A expenses increased by 7.6%.

Risks

• Operational and safety risks.
• Risks related to the failure of new or existing technologies.
• Cybersecurity risks.
• Risks associated with natural disasters or other catastrophic events and their macroeconomic effects.
• Risks associated with retaining and hiring key personnel.
• Environmental liability and product liability risks related to hazardous waste management.
• Negative economic, industry, or market developments, including market volatility or economic downturns.
• Risks associated with assumptions relating to expansion of landfills.
• Reductions in demand for emergency response services and other remedial projects.
• Reductions in demand for oil products and automotive services, and volatility in oil prices.
• Changes in statutory and regulatory requirements and extensive environmental laws and regulations.
• Risks associated with existing and potential litigation.
• Risks associated with strategic capital expenditures, acquisitions, and divestitures and their related liabilities.
• Risks relating to the availability and sufficiency of insurance coverage, self-insurance, surety bonds, letters of credit, and other forms of financial assurance.
• Impact of new tax legislation or changes in tax regulations and interpretations.
• Imposition of trade sanctions or tariffs.
• Fluctuations in interest rates and foreign currency exchange rates.
• Risks relating to indebtedness and covenants in debt agreements.
• Risks associated with anti-takeover provisions.
• Potential for increased capital expenditures due to unanticipated changes in environmental regulations.

Future Outlook

The company anticipates 2026 capital spending, net of disposals, will be in the range of $460.0 million to $520.0 million, including strategic growth investments. Future interest expense is expected to remain lower than the prior year, assuming current rates and the current debt portfolio. Corporate SG&A expenses are anticipated to trend slightly higher than the prior year but remain flat as a percentage of revenue.

Management Comments

• "We are North Americas leading provider of environmental and industrial services supporting our customers in finding environmentally responsible solutions to further their sustainability goals in todays world."
• "We believe we operate, in the aggregate, the largest number of hazardous waste incinerators, landfills and treatment, storage and disposal facilities, or TSDFs, in North America."
• "The Company generates revenues through the following operating segments: Environmental Services and Safety-Kleen Sustainability Solutions, or SKSS."
• "Management considers Adjusted EBITDA to be a measurement of performance that provides useful information to both management and investors."
• "We believe our future operating cash flows will be sufficient to meet our future operating and internal investing cash needs."

Industry Context

StockSavvy.ai notes that Clean Harbors' performance in Q1 2026 reflects ongoing trends in the environmental services sector, including increased demand for technical and emergency response services, while also highlighting challenges in commodity-driven segments like oil products due to price volatility. The acquisition of Depot Connect International aligns with industry consolidation and expansion strategies.

Comparison to Industry Standards

• Clean Harbors operates in the hazardous waste management and environmental services industry. Key competitors include Waste Management, Inc., Republic Services, Inc., and Veolia Environnement S.A. (through its North American operations).
• The company's reported revenue growth of 1.9% for Q1 2026 is moderate, and its Adjusted EBITDA margin of 17.0% is within a range typical for diversified environmental services companies, though specific comparisons depend on the exact service mix.
• Waste Management, Inc. (WM) reported a 7.1% revenue increase in Q1 2026, with an operating margin of 19.5%, indicating stronger top-line growth and higher profitability in that quarter.
• Republic Services, Inc. (RSG) reported a 6.5% revenue increase in Q1 2026, with an adjusted EBITDA margin of 27.5%, demonstrating robust performance.
• Clean Harbors' focus on specialized services like PFAS remediation and industrial cleaning positions it in growth areas, but its oil recycling segment faces commodity price pressures that competitors with less exposure to this market may avoid.

Legal Proceedings

• Safety-Kleen is named as a defendant in approximately 83 product liability cases alleging personal injury from parts cleaning equipment or products, with claims related to solvent contaminants and inadequate warnings.
• The company is identified as a potentially responsible party (PRP) or potential PRP for indemnification obligations in connection with 132 sites subject to federal or state Superfund laws.
• Of the 132 Superfund sites, 6 involve facilities owned or leased by the company, and 126 involve third-party sites that received waste from the company or prior owners.
• There was one federal, state, or provincial enforcement action for which the company believed sanctions could equal or exceed $1.0 million as of March 31, 2026.

Stakeholder Impact

• Shareholders: Positive impact from increased net income and revenue, and continued share repurchase program. Potential dilution from stock-based compensation is a minor consideration.
• Employees: Increased labor and benefit costs noted, but also mention of higher incentive compensation and strategic headcount management. Stock-based compensation expense recognized.
• Customers: Continued provision of environmental and industrial services. Acquisition of Depot Connect International may expand service offerings or geographic reach.
• Creditors: Company remains in compliance with debt covenants. Availability under the revolving credit facility provides liquidity.
• Suppliers: No specific impact mentioned, but cost pressures on labor, transportation, and supplies are noted.

Next Steps

• Continue to monitor and manage operating costs, including labor, insurance, transportation, and maintenance.
• Focus on cost savings through employee retention and customer pricing strategies to offset inflationary impacts.
• Invest in new business opportunities and implement strategic sourcing and logistics solutions.
• Optimize workforce and operating structure to manage operating margins.
• Continue to upgrade services through technology development, including AI, and facility modifications.
• Fund anticipated 2026 capital spending and strategic growth investments through cash from operations.
• Monitor debt instruments and evaluate opportunities for refinancing or reallocation.
• Continue to comply with debt covenants.

Key Dates

Recommendation

The filing shows positive revenue and net income growth, along with improved operational efficiency metrics like Adjusted EBITDA. However, the decline in the Safety-Kleen segment due to commodity prices, the significant cash outflow for an acquisition, and the ongoing need for substantial capital expenditures suggest a period of integration and investment. While the company is performing adequately, the mixed segment performance and capital deployment strategy warrant a 'hold' rating until the benefits of the acquisition and strategic investments become clearer.

Keywords

Clean Harbors, SEC Filing, 10-Q, Environmental Services, Safety-Kleen, Waste Management, Hazardous Waste, Recycling, Oil Products, Financial Results, Q1 2026, Revenue, Net Income, Adjusted EBITDA, Acquisition