Casella Waste Systems (Nasdaq: CWST) reported fiscal Q2 2026 revenue of $543.7 million, up 16.9% year over year, while diluted GAAP EPS fell to $0.06 from $0.08. Adjusted EBITDA rose 12.5% to $123.2 million, but its margin narrowed to 22.7% as acquisitions and pricing expanded revenue faster than profitability. The quarter ended June 30, 2026, and the results were released on August 6.

Core financial results

Acquisitions, collection and disposal pricing, higher landfill volumes, and National Accounts growth supported revenue. Profit growth was less pronounced: adjusted earnings increased modestly, while higher depreciation, amortization, and interest expense contributed to lower GAAP net income.

Quarterly operating cash flow and adjusted free cash flow both improved, providing some support as acquisition spending remained substantial.

Adjusted diluted EPS, adjusted EBITDA, and adjusted free cash flow are non-GAAP measures.

Business and segment performance

Solid Waste remained the larger and faster-growing segment, with third-party revenue increasing 18.4%. Resource Solutions grew 10.7%, supported in part by National Accounts, while a facility closure reduced segment revenue by $1.9 million.

Solid Waste pricing increased 5.5%, consisting of 5.8% collection pricing and 4.7% disposal pricing. Volume trends were mixed: total Solid Waste volume declined 0.6%, as a 1.4% collection volume decrease more than offset 3.7% disposal volume growth. Landfill volume increased 8.5%.

Resource Solutions pricing contributed $4.0 million of growth, while volume added $0.4 million. National Accounts volume rose 6.4%, compared with a 4.4% decline in processing volume.

Acquisition-led growth outpaced profit conversion

Acquisitions contributed approximately $46.2 million of the company’s $78.4 million revenue increase, or about 59%. Disclosed pricing contributions across Solid Waste and Resource Solutions added another approximately $24.5 million. Casella completed five acquisitions during 2026 through the reporting date, representing about $165 million in aggregate annualized revenue.

The additional revenue did not convert proportionately into profit. Operating income increased only 3.6% to $20.0 million, while depreciation and amortization rose to $88.5 million from $77.0 million, mainly because of acquisition growth. Net interest expense increased to $17.4 million from $13.0 million, contributing to the 27.6% decline in GAAP net income.

Adjusted EBITDA excluded several acquisition-related and non-cash expenses, but its 12.5% growth still trailed revenue growth. Management said floating fuel recovery fees offset elevated fuel costs, although the combination remained a 40-basis-point headwind to adjusted EBITDA margin. Casella has completed systems integration work in its Mid-Atlantic region and is continuing route optimization initiatives during the second half.

Cash flow and balance sheet

For the first six months of 2026, operating cash flow increased 15.3% to $161.0 million, while adjusted free cash flow rose 10.3% to $78.1 million. Capital expenditures were nearly unchanged at $122.3 million, compared with $121.9 million in the prior-year period.

Adjusted free cash flow is not the same as cash remaining after all acquisition-related spending. Its calculation adds back items including acquisition capital expenditures and cash transaction and integration expenses. Separately, Casella spent $400.8 million on acquisitions during the first half, up from $175.0 million a year earlier.

Cash and cash equivalents declined to $25.5 million at June 30 from $123.8 million at the end of 2025. Total debt increased to approximately $1.35 billion from $1.15 billion over the same period, after $249.0 million of debt borrowings and $78.4 million of principal repayments during the first half.

Fiscal 2026 guidance

Casella raised revenue guidance to incorporate completed acquisitions and higher floating fuel recovery fees associated with elevated fuel costs. However, it lowered GAAP net income guidance and reaffirmed adjusted EBITDA and cash flow ranges, indicating that the higher revenue outlook did not change management’s adjusted profit expectations.

The guidance excludes acquisitions that had not been completed. Management said the business was performing in line with plan and that the full-year outlook had not materially changed.

Recent insider transactions

The supplied insider data showed 71,378 shares purchased across 19 transactions and 31,503 shares sold across 12 transactions during the latest six-month period. That produced net purchases of 39,875 shares, while total insider holdings were reported at approximately 375,300 shares.

The latest 10 reported records consisted primarily of stock awards rather than discretionary open-market purchases. Eight separate June 4 awards are grouped below to avoid repeating identical terms.

These transactions describe the reported activity but do not, on their own, establish insiders’ views about the company’s outlook.

Risks investors should monitor

• Acquisition integration and balance-sheet demands: Five acquisitions expanded revenue, but first-half acquisition spending reached $400.8 million as debt increased and cash declined. Realizing expected operating benefits remains important.
• Margin conversion: Revenue grew faster than adjusted EBITDA, and adjusted EBITDA margin declined 80 basis points. Elevated fuel costs accounted for 40 basis points of pressure despite recovery fees.
• Mixed volume trends: Landfill and disposal volumes increased, but collection volume fell 1.4% and total Solid Waste volume declined 0.6%, leaving part of the growth dependent on pricing and acquisitions.
• Pressure on GAAP earnings: Higher acquisition-related depreciation and amortization, together with increased interest expense, limited operating income growth and reduced net income.
• Organics facility closure costs: Casella recorded a $1.1 million quarterly closure charge related to a Maine facility and expects closure and remediation spending to continue until requirements are completed.

Summary

Casella’s second-quarter revenue growth was driven primarily by acquisitions and pricing, with landfill and National Accounts activity providing additional support. Cash generation improved and full-year revenue guidance increased, but narrower adjusted EBITDA margin, lower GAAP net income, rising debt, and continued acquisition integration show that converting expansion into profitable growth remains the central issue for the rest of 2026.

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