Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue growth | 6.3% | Year-over-year |
| Operating EBITDA growth | 5.8% | Year-over-year |
| Free cash flow growth | 20% | Year-over-year |
| SG&A as % of revenue | 9.3% | Improved 70 basis points |
| Healthcare Solutions operating EBITDA growth | 33% | Year-over-year |
| Recycling processing and sales segment operating EBITDA growth | 40% | Year-over-year |
Guidance and outlook
- We expect operating EBITDA to be within the guidance range we established at the beginning of the year.
- We anticipate revenue and free cash flow results to be at the high end of our prior ranges.
- Our expectations include full year SG&A of about 10% of revenue.
How management sounded
Positive (+6 on our -10 to +10 scale). Management expressed strong confidence in their strategic direction, raised the outlook for revenue and free cash flow to the high end of guidance, and highlighted successful integration of the Healthcare Solutions business. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Q4 EBITDA expectations
Asked: An analyst asked about Q4 EBITDA shaping and if margins would step down.
Answer: Management noted Q4 should be consistent with the year's performance, expecting the best margin performance of the year in Q4, though year-over-year comparisons may be impacted by fuel costs.
Risk management costs
Asked: An analyst asked about the sizable headwind from risk costs.
Answer: Management clarified it was not related to safety performance but rather an out-of-period actuarial adjustment, large loss claims, and a tough year-over-year comparison.
Healthcare volume trends
Asked: An analyst asked about volume trends in Healthcare Solutions.
Answer: Management stated that while volumes are still negative, they are seeing improving trends and expect better performance as they move into 2027.
M&A strategy
Asked: An analyst asked about the M&A pipeline and interest in potential asset spin-offs.
Answer: Management confirmed interest in core solid waste assets and noted the balance sheet is in great shape to pursue opportunities if they fit the strategic plan.
Internalization rates
Asked: An analyst asked about the sustainability of the 72% internalization rate.
Answer: Management attributed the high rate to recycling volume growth and improved routing algorithms, noting they continuously look for ways to optimize material flow.
What to watch before the next call
- The impact of potential new landfill regulations in California and whether they proliferate to other states.
- The trajectory of volume trends in the Healthcare Solutions business as they move into 2027.
- The integration progress and synergy realization in the Healthcare Solutions business heading into mid-2027.
