8-K: Clean Harbors Reports Record Q2 Adjusted EBITDA, Reaffirms Full-Year Guidance

Clean Harbors, Inc. announced second-quarter 2025 financial results, reporting flat revenue at $1.55 billion but achieving record Q2 Adjusted EBITDA of $336.2 million and reaffirming its full-year 2025 Adjusted EBITDA and Adjusted Free Cash Flow guidance.

Summary

• Revenues for the second quarter ended June 30, 2025, were $1.55 billion, remaining flat compared to the same period in 2024.
• Net income for Q2 2025 was $126.9 million, or $2.36 per diluted share, a decrease from $133.3 million, or $2.46 per diluted share, in Q2 2024.
• Adjusted EBITDA reached a record $336.2 million in Q2 2025, up from $327.8 million in Q2 2024, with the Adjusted EBITDA Margin increasing by 60 basis points to 21.7%.
• The Environmental Services (ES) segment achieved 3% revenue growth and 5% Adjusted EBITDA growth, marking its 13th consecutive quarter of year-over-year improvement in segment Adjusted EBITDA margin.
• Safety-Kleen Environmental Services revenue within the ES segment grew 9% due to pricing and core offerings, while Technical Services revenue grew 4% on strong disposal volumes.
• Incineration utilization, excluding the new Kimball incinerator, was 89%, and average incineration price rose 7% on a mix-adjusted basis.
• The Safety-Kleen Sustainability Solutions (SKSS) segment's results were ahead of expectations, supported by waste oil collection strategies and aggressive management of the re-refining spread.
• SKSS gathered 64 million gallons of waste oil in the quarter, meeting production goals.
• Full-year 2025 Adjusted EBITDA guidance was reiterated at a midpoint of $1.18 billion (range of $1.16 billion to $1.20 billion), representing 6% year-over-year growth.
• Full-year 2025 Adjusted Free Cash Flow guidance was reiterated at a midpoint of $460 million (range of $430 million to $490 million), representing a nearly 30% increase from the prior year.

Sentiment

Score: 7

Explanation: The sentiment is positive due to record Adjusted EBITDA, significant margin expansion, strong segment growth in Environmental Services, and the reaffirmation of robust full-year guidance. While revenue was flat and GAAP net income slightly declined, the operational improvements and future outlook are strong, indicating a healthy underlying business performance.

Positives

• Achieved record Q2 Adjusted EBITDA of $336.2 million, an increase from $327.8 million in Q2 2024.
• Increased consolidated Adjusted EBITDA margin by 60 basis points to 21.7% in Q2 2025.
• Environmental Services (ES) segment delivered 3% revenue growth and 5% Adjusted EBITDA growth.
• ES segment achieved its 13th consecutive quarter of year-over-year improvement in segment Adjusted EBITDA margin.
• Safety-Kleen Environmental Services revenue rose 9% through pricing and growth in core offerings.
• Technical Services revenue grew 4% on strength in disposal volumes.
• Incineration utilization was outstanding at 89% (excluding the new Kimball incinerator), with average incineration price rising 7% on a mix-adjusted basis.
• Field Services and Industrial Services improved margins year-over-year.
• Safety-Kleen Sustainability Solutions (SKSS) segment results were ahead of expectations, supported by waste oil collection strategies and re-refining spread management.
• SKSS gathered 64 million gallons of waste oil, hitting production goals.
• Posted the best quarterly safety results in company history with a Total Recordable Incident Rate (TRIR) of just 0.40.
• Reiterated full-year 2025 Adjusted EBITDA guidance midpoint of $1.18 billion, representing 6% growth.
• Reiterated full-year 2025 Adjusted Free Cash Flow guidance midpoint of $460 million, representing a nearly 30% increase.
• New Kimball incinerator achieved its Q2 volume target and is expected to ramp up further in the second half of 2025.
• Anticipates a strong second half of the year driven by tailwinds, pricing strategies, cost mitigation, and operational efficiencies.

Negatives

• Revenues were flat at $1.55 billion in Q2 2025 compared to Q2 2024.
• Net income decreased to $126.9 million in Q2 2025 from $133.3 million in Q2 2024.
• Diluted earnings per share decreased to $2.36 in Q2 2025 from $2.46 in Q2 2024.
• Income from operations decreased to $210.3 million in Q2 2025 from $215.5 million in Q2 2024.
• Tariff uncertainty has impacted some customers in the short-term.

Risks

• Operational and safety risks.
• Risks relating to the failure of new or existing technologies.
• Cybersecurity risks.
• The occurrence of natural disasters or other catastrophic events, as well as their residual macroeconomic effects.
• Risks associated with retaining and hiring key personnel.
• Environmental liability and product liability risks relating to hazardous waste management and other components of the company's business.
• Negative economic, industry or other developments, including market volatility or economic downturns.
• Risks associated with management's assumptions relating to expansion of the company's landfills.
• Reductions in the demand for emergency response services at industrial facilities or on roadways, railways or waterways, and other remedial projects and regulatory developments.
• Reductions in the demand for oil products and automotive services and volatility in oil prices in the markets the company serves.
• Changes in statutory and regulatory requirements and risks relating to extensive environmental laws and regulations.
• Risks associated with existing and potential litigation.
• Risks associated with the company's identification and execution of strategic acquisitions and divestitures and their related liabilities.
• Risks relating to the availability and sufficiency of the company's insurance coverage, self-insurance, surety bonds, letters of credit and other forms of financial assurance.
• The impact of new tax legislation or changes in tax regulations and interpretations.
• The imposition of trade sanctions or tariffs.
• Fluctuations in interest rates and foreign currency exchange rates.
• Risks relating to the company's indebtedness and covenants in its debt agreements.
• Risks associated with certain anti-takeover provisions under the Massachusetts Business Corporation Act and the company's By-Laws.

Future Outlook

Clean Harbors anticipates a strong second half of 2025, driven by momentum in core markets, a promising North American economic outlook due to reshoring, and the tangible benefits of recent tax legislation. The company expects continued healthy demand in its Environmental Services segment, leading to a substantial project pipeline, including remediation projects. The new Kimball incinerator is expected to further ramp up with a broader mix of waste streams in the second half of the year. For Safety-Kleen Sustainability Solutions, the focus remains on actively managing collection rates and cost structure, while advancing value-added initiatives like the Castrol partnership and Group III production. Clean Harbors reiterated its full-year 2025 Adjusted EBITDA guidance of $1.16 billion to $1.20 billion (midpoint $1.18 billion) and Adjusted Free Cash Flow guidance of $430 million to $490 million (midpoint $460 million).

Management Comments

• "Our second-quarter results reflect the consistent profitable growth of our Environmental Services (ES) segment, where we experienced strong demand for our disposal assets, and a stabilization of our Safety-Kleen Sustainability Solutions (SKSS) segment, where our collection strategies yielded favorable results." Mike Battles, Co-Chief Executive Officer.
• "We improved our consolidated Adjusted EBITDA margin by 60 basis points from a year ago through lowering our overall cost structure with a sharp focus on our SG&A spend." Mike Battles, Co-Chief Executive Officer.
• "In addition, we posted the best quarterly safety results in our history by generating a Total Recordable Incident Rate (TRIR) of just 0.40." Mike Battles, Co-Chief Executive Officer.
• "Despite substantial growth in the year ago quarter, our ES segment still achieved 3% growth in revenue and 5% growth in Adjusted EBITDA. This revenue growth, combined with pricing and SG&A cost controls, enabled our ES segment to achieve its 13th consecutive quarter of year-over-year improvement in segment Adjusted EBITDA margin." Eric Gerstenberg, Co-Chief Executive Officer.
• "Results in our SKSS segment were ahead of our expectations, supported by our waste oil collection strategies and success in aggressively managing our re-refining spread." Mike Battles, Co-Chief Executive Officer.
• "We believe that our shift to higher charge-for-oil (CFO) pricing, which has continued since our strategic program rollout last November, positions us well for the back half of the year. We currently expect to achieve our annual targets for this business in 2025, while reducing the volatility weve seen in recent years." Mike Battles, Co-Chief Executive Officer.
• "We enter the back half of 2025 with considerable momentum across our core markets, backed by a promising North American economic outlook as reshoring continues." Eric Gerstenberg, Co-Chief Executive Officer.
• "We continue to see healthy overall demand from customers within our ES segment, resulting in a substantial project pipeline." Eric Gerstenberg, Co-Chief Executive Officer.
• "We are excited about the continued progress at our new Kimball incinerator, which achieved its Q2 volume target. We look forward to further ramping up the facility with a broader mix of waste streams in the second half of this year." Eric Gerstenberg, Co-Chief Executive Officer.
• "We anticipate a strong second half of the year for the Company based on numerous tailwinds that should drive both topand bottom-line improvement from a year ago." Mike Battles, Co-Chief Executive Officer.

Industry Context

The company's performance reflects broader trends in the North American environmental and industrial services sector, benefiting from a promising economic outlook and ongoing reshoring initiatives that drive demand for waste management and industrial cleaning services. The continued strong demand for disposal assets and incineration services aligns with increasing industrial activity and regulatory compliance needs. The focus on managing waste oil collection rates and re-refining spreads in the Safety-Kleen Sustainability Solutions segment indicates adaptation to market dynamics in the used oil recycling industry.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess the company's performance against global industry benchmarks.

Stakeholder Impact

• Shareholders: Positive impact from record Adjusted EBITDA, margin expansion, and reaffirmed strong full-year guidance, indicating stable financial health and future growth prospects.
• Employees: Positive impact from achieving the best quarterly safety results in company history (TRIR of 0.40), demonstrating a strong commitment to employee protection.
• Customers: Continued healthy demand for environmental services and a substantial project pipeline suggest ongoing strong relationships and service delivery, despite some short-term tariff uncertainty impacting certain customers.
• Creditors: Reaffirmed strong Adjusted Free Cash Flow guidance indicates robust cash generation, which supports debt servicing capabilities.

Next Steps

• Further ramping up the new Kimball incinerator with a broader mix of waste streams in the second half of 2025.
• Actively managing collection rates and cost structure within the Safety-Kleen Sustainability Solutions (SKSS) segment.
• Advancing value-added initiatives in SKSS, such as the Castrol partnership and Group III production.
• Multiple customers are expected to proceed with remediation projects in the coming quarters, supporting the disposal and recycling network.

Key Dates

Recommendation

Clean Harbors demonstrated solid operational performance with record Adjusted EBITDA and margin expansion, driven by strong Environmental Services growth and stabilization in Safety-Kleen Sustainability Solutions. The reaffirmation of full-year guidance provides confidence in future performance. However, flat revenue and a slight decline in GAAP net income suggest a stable, rather than rapidly accelerating, growth trajectory. The company's strong safety record and strategic initiatives are positive, but the overall results indicate a 'hold' position for investors seeking consistent, rather than explosive, returns.

Keywords

Environmental Services, Hazardous Waste Management, Industrial Services, Waste Oil Recycling, Sustainability, Incineration, Remediation, Safety-Kleen, North America