Clean Harbors Q2 2026 Earnings Report

Clean Harbors EPS Results

• Actual EPS: $3.22
• Consensus EPS: $2.81
• Beat/Miss: Beat by +$0.41
• One Year Ago EPS: $2.36

Clean Harbors Revenue Results

• Actual Revenue: $1.74 billion
• Expected Revenue: $1.64 billion
• Beat/Miss: Beat by +$93.02 million
• YoY Revenue Growth: +11.90%

Clean Harbors Announcement Details

• Quarter: Q2 2026
• Date: 7/29/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, July 29, 2026
• Conference Call Time: 9:00AM ET

Clean Harbors (NYSE:CLH) is a leading provider of environmental, energy and industrial services in North America. The company specializes in the collection, transportation and disposal of hazardous and non-hazardous wastes, emergency spill response and remediation, industrial cleaning and on-site field services. Its comprehensive service offering also includes chemical neutralization, drum crushing, high-pressure water blasting, tank cleaning and vacuum services designed to help customers meet stringent environmental regulations.

Founded in 1980 by Alan S. McKim and headquartered in Norwell, Massachusetts, Clean Harbors has grown through organic expansion and strategic acquisitions to establish a network of more than 400 service centers, treatment, storage and disposal facilities and emergency response locations across the United States and Canada. The company’s history of targeted investments has allowed it to broaden its technical capabilities, enhance its service portfolio and integrate specialized businesses that strengthen its position in key end markets such as manufacturing, energy production, healthcare and government.

Clean Harbors employs a workforce of technicians, engineers and environmental specialists who deliver solutions tailored to complex waste management and environmental challenges. Under the leadership of founder and long-time chief executive Alan S. McKim, the company has built a reputation for operational excellence, safety and regulatory compliance. Clean Harbors continues to leverage its expansive geographic footprint and technical expertise to support customers’ sustainability initiatives and lifecycle management of environmental liabilities.

Clean Harbors Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Record Q2 performance: Revenue rose 12% to $1.74 billion, adjusted EBITDA increased 22% to $409 million, and the 23.6% margin was the highest in company history. Management cited strength in both Environmental Services and Safety-Kleen Sustainability Solutions.
• Positive Sentiment: 2026 guidance was raised substantially: Adjusted EBITDA guidance increased by $110 million at the midpoint to $1.38 billion, implying approximately 18% growth, while adjusted free cash flow guidance rose to $550 million.
• Positive Sentiment: Clean Harbors won a 10-year manufacturing waste-disposal contract valued at approximately $600 million, expected to ramp toward an $80 million-$100 million annual revenue run rate by 2030. Management views the agreement as evidence of reshoring-driven demand and customers’ preference for integrated waste providers.
• Positive Sentiment: The company is expanding into data-center services, with work already secured at 10 sites and a target of approximately $200 million in annual revenue by 2028. It plans to invest $50 million over three years in specialty equipment, tankage, and vehicles to support the opportunity.
• Neutral Sentiment: Safety-Kleen Sustainability Solutions delivered a sharp rebound, including a 143% increase in adjusted EBITDA, as lubricant shortages lifted base-oil pricing and demand. Management expects favorable conditions to continue into Q3 but anticipates pricing to decline in Q4, underscoring the segment’s ongoing cyclicality.

Presentation

[Operator]

Greetings, welcome to the Clean Harbors second quarter 2026 financial results conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tim Rodenberger, General Counsel for Clean Harbors. Mr. Rodenberger, you may begin.

[Tim Rodenberger, General Counsel at Clean Harbors]

Thank you, Christine, good morning, everyone. With me on today's call are our Co-Chief Executive Officers, Eric Gerstenberg and Mike Battles, our EVP and Chief Financial Officer, Eric Dugas, and our SVP of Investor Relations, Jim Buckley. Slides for today's call are posted on our investor relations website. Matters we are discussing today that are not historical facts are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Participants are cautioned not to place undue reliance on these statements, which reflect management's opinions only as of today, July 29, 2026. Information on potential factors and risks that could affect our results is included in our SEC filings. The company undertakes no obligation to revise or publicly release the results of any revision to the statements made today other than through filings made concerning this reporting period. Today's discussion includes references to non-GAAP measures.

[Tim Rodenberger, General Counsel at Clean Harbors]

Clean Harbors believes that such information provides an additional measurement and consistent historical comparison of its performance. Reconciliations of these measures to the most directly comparable GAAP measures are available in today's news release, on our IR website, and the appendix of today's presentation. Let me turn the call over to Eric Gerstenberg to start. Eric?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks, Tim. Good morning, everyone, thank you for joining us. Turning to a summary of Q2 results on slide three. I'll start, as we always do, with safety, which remains at the core of our success. In Q2, our team continued to focus on protecting themselves and their colleagues, resulting in a year-to-date total recordable incident rate of 0.46. This performance keeps us on track to reach our 2026 goal while continuing to outperform industry benchmarks and peer results. Safety remains a meaningful competitive differentiator for us. We exceeded our guidance for the quarter on the strength of both of our operating segments. Strong performances in Environmental Services and Safety-Kleen Sustainability Solutions contributed to record revenue, adjusted EBITDA, and adjusted EBITDA margin.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

While SKSS clearly exceeded Q2 expectations, what gives us conviction in our outlook is that Environmental Services continues to deliver strong utilization rates, expanding margins, and a growing pipeline of long-term opportunities. With ES, demand for our disposal assets and vast collection network remain strong, reflecting the scarcity of disposal capacity across the industry. Within our services business, growth was driven by another strong performance from Safety-Kleen Environmental Services and increased revenue in field services. The SKSS segment outperformed due to a variety of factors, including the environment created by global lubricant shortages. Turning to our segment performance, beginning with ES on slide four. Q2 revenue in this segment increased by more than $100 million. Technical services revenue grew by 18% on strong demand for disposal and recycling services.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

We won both base business and sizable projects, including a large PFAS-related filtration project that directly resulted from previous emergency response work. That project accounted for more than $30 million of Q2 revenue. Safety-Kleen Environmental Services revenue increased 11%, driven by pricing and growth in its core offerings, including containerized waste collection and vacuum services. Incineration utilization in Q2 was 91% versus 86% a year ago, with the new Kimball incinerator included in both periods. Landfill volumes were also up, rising 7% this quarter. Field services revenue grew 3%, despite a difficult comp with Q2 2025. Our industrial services revenue was comparable to Q2 a year ago, as growth in specialty and other services offset the impact of North American refineries continuing to operate with very limited downtime and turnaround activity. Adjusted EBITDA was up 8% in the quarter, with ES segment margin up 10 basis points to 27.9%.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

We continue to demonstrate the earnings power of this segment, delivering our 17th consecutive quarter of year-over-year improvement in adjusted EBITDA margin and our 19th straight quarter of EBITDA growth. Overall, it was another outstanding quarter for ES as we continue to capitalize on favorable market trends that are showing no signs of slowing. We continue to successfully execute on our growth strategies as we head into the back half of the year. Turning to slide five. We announced today that we recently won a significant long-term disposal contract with a manufacturing customer that is expanding its U.S. operations. The 10-year agreement, which centers on incineration waste and complex wastewater volumes, carries an estimated value of $600 million with options to expand in scope and extend duration. The contract will commence in the fourth quarter and will likely generate about $10 million in revenue this year.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Based on the customer's plans to open and ramp up multiple U.S. sites, it is expected to reach full capacity in 2030. This contract provides a decade-long growth run rate tied to the expansion of U.S. manufacturing. We believe it validates our substantial capabilities and versatility to safely process large volumes of variable waste streams at our multiple locations. We are proud that this customer selected Clean Harbors as a long-term partner to grow its U.S. operations. We know that the scale and redundancy of our recycling and disposal network and our service locations were key factors in winning this contract. There are two trends we are seeing in the market today. First, the expansion of U.S. manufacturing related to reshoring. Second, customers are seeking to utilize a common service provider for all of their regulated waste and recycling needs.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Given the unique capabilities of our assets, we expect to pursue opportunities for new contracts, both large and small, while expanding our relationships with customers that are growing their North American presence. Turning to slide six. Data centers is a market that we have been eyeing for some time, and I know that some of you have been asking about it. We are in the process of introducing an integrated data center solution as many of our services align with customer needs. Our solution consists of eight separate lines of business that will address multiple phases of the data center market. Our initial focus is on the construction phase, where our Industrial Services, mechanical flushing, chemical passivation, and water filtration services are in high demand. Our Specialty Services Group has had some early successes in meeting with hyperscalers and data center owners.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

We've already won work on 10 sites to date and are bidding on a dozen more. We see an opportunity to cross-sell and grow, particularly as that market continues to evolve. In addition to shifting to a variety of data center cooling approaches that impact customer needs, the market is expecting to move from the current heavy construction phase to more of a maintenance phase. We see that as an attractive opportunity to introduce additional lines of business into our integrated offering, including fluid recovery and recycling, debris and waste removal, ER events, and lubricant delivery. Our long-term plans for this market opportunity remain relatively modest as we are targeting growth to $200 million in annual revenue by the end of 2028.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

In order to hit that mark, we will be investing an additional $50 million in CapEx over the next three years to increase the specialty equipment, tankage, and vehicles we will need to service customers. The data center market is expected to grow at a CAGR of approximately 20% annually through 2030. With the services we provide, particularly within our Specialty Industrial Services Group, we estimate our TAM by 2030 could be as large as $8 billion-$10 billion. With that, let me turn things over to Mike to discuss our planned acquisition of ES&H, SKSS, and our capital allocation strategy. Mike?

[Mike Battles, Co-CEO at Clean Harbors]

Thanks, Eric, and good morning, everyone. Turning to our latest acquisition on slide seven. We announced today that we have entered into a definitive agreement to acquire ES&H, a regional leader in field services and emergency response services in the Gulf region, for $305 million. The all-cash transaction is expected to close in the second half of 2026, subject to regulatory approval and other customary closing conditions. We expect to derive attractive shareholder returns from this transaction, as ES&H has built an outstanding reputation with its customers over a 30-year history. They are a recognized leader in environmental ER throughout the Gulf Coast. The addition of ES&H is expected to accelerate the growth and increase the coverage of our field services business.

[Mike Battles, Co-CEO at Clean Harbors]

The company is known in the region as a great resource for on-water responses, and like Clean Harbors, the company carries the U.S. Coast Guard's highest Oil Spill Removal Organization classification. Their talented employees, geographic footprint, and equipment fleet will be a welcome addition to the company. ES&H is headquartered in Louisiana with a total of 13 service branches across that state and Texas. The majority of those are coastal locations that support its maritime services. In addition to its primary offerings, the company also sells a branded service called Forefront that includes emergency response readiness plan development, training, and management of customers across multiple industries. ES&H's revenue are expected to be approximately $90 million annually, which should generate adjusted EBITDA of approximately $30 million.

[Mike Battles, Co-CEO at Clean Harbors]

We expect the acquisition to generate cost synergies of approximately $5 million after the first full-year of operations, which equates to a post-synergy acquisition multiple of 8.7x. Moving on to SKSS on slide eight. As Eric highlighted, this segment delivered spectacular results this quarter. The greater than 40% increase in its top line and remarkable 143% increase in adjusted EBITDA reflects the elevated market pricing during the quarter due to the scarcity of base and blended products. The business also continues to manage our oil collection services effectively, collecting needed volumes while delivering higher year-over-year charge for oil revenue. Strong demand for our re-refined products was a result of major global supply disruptions in the Middle East and Asia, which created domestic market scarcity and drove multiple price increases in the market during Q2.

[Mike Battles, Co-CEO at Clean Harbors]

In the quarter, we also saw the benefit of ongoing strategic initiatives, including producing Group III gallons and selling more blended volume. We increased our blended direct gallons sold in Q2, which accounted for 11% of total volume sold. Our closed loop offering, where we collect customers' waste oil and deliver lubricants back, is gaining more traction in this market. As mentioned, our collection team also did a great job actively managing the front end of our re-refining spread in terms of both collection volumes and costs. We gathered 61 million gallons of waste oil while continuing to increase revenues generated from our CFO program compared with a year ago. Overall, we were pleased to see the SKSS segment rebound so strongly after recent challenging years.

[Mike Battles, Co-CEO at Clean Harbors]

We expect the supply constraint conditions to extend into Q3. Importantly, we believe that our strategic investments initiatives, like Group III, more blended, and the SDA unit, will position us when base oil and blended prices return to pre-war levels. Turning to capital allocation on slide nine. We continue to look for the best opportunities, whether internal or external, to generate the highest and most durable returns on our shareholders' capital. The ES&H acquisition we expect to close in the remaining months fall into that category. Additionally, we recently closed on a $30 million acquisition of a New England-based field services and waste oil collection business called Western Oil that should deliver $4 million-$6 million of annual adjusted EBITDA. They are well-known here in the Northeast and will help support the gallons we need for our New Hampshire re-refinery, as well as provide more spill response capabilities.

[Mike Battles, Co-CEO at Clean Harbors]

We're excited about other attractive acquisition candidates that we are engaged with or expect to come to market later this year. Internally, we continue to invest strategically to accelerate our growth and increase profitability, including our previously announced vacuum truck fleet expansion, SDA unit in East Chicago, and other strategic opportunities, such as the data center investment that Eric outlined. We have the balance sheet and low leverage to execute both facets of our growth strategy. We also continue to support share repurchases as an attractive way to return value to our shareholders. As we move into the back half of 2026, we will look to extend the momentum we generated in the first half. We have an industry-leading team that executed well from both an operational and sales perspective. Demand trends are favorable as well.

[Mike Battles, Co-CEO at Clean Harbors]

We believe ongoing reshoring is creating opportunities for us to add new customers and waste streams. Our PFAS pipeline continues to grow with no signs of slowing in the U.S. or Canada, including both private and government customers. For SKSS, the business continues to be well-managed at both ends of our spread while operating in a robust pricing and demand environment. Overall, we expect to deliver record top line, bottom line margins, and free cash flow this year, which will support our capital allocation strategy. Lastly, we wanted to take a moment to acknowledge our founder, Alan McKim. Alan built this company from the ground up over 46 years and created opportunities for thousands of employees. The culture, value, and customer focus that defines Clean Harbors today are direct reflections of his leadership.

[Mike Battles, Co-CEO at Clean Harbors]

We recently renamed our campus headquarters in his honor, a fitting tribute to a tremendous impact he's had on our company, our people, and our industry. With that, let me turn the call over to Eric Dugas, our CFO, to discuss our financials.

[Eric Dugas, EVP and CFO at Clean Harbors]

Thank you, Mike, good morning, everyone. Turning to our Q2 results on slide 11. Our quarterly results came in well ahead of the expectations we outlined in May, driven by outperformance and strong execution from both segments. Total Q2 revenue increased 12% to $1.74 billion, reflecting a continuation of many of the trends we saw exiting Q1 and discussed on our previous earnings call. Q2 adjusted EBITDA increased 22% to $409 million. Our consolidated Q2 adjusted EBITDA margin was 23.6%, representing the highest quarterly margin in our company's history and a 190 basis point improvement from the prior year period. Market conditions in SKSS were clearly a factor, our margin story in the quarter goes well beyond that.

[Eric Dugas, EVP and CFO at Clean Harbors]

As we leveraged volume growth in our network, gained market share, and added waste streams in several verticals, continued to drive strategies to offset inflation and higher fuel costs, controlled labor costs while continuing to minimize third-party costs, and improved utilization rates of our vehicle and equipment fleets. SG&A expense as a percentage of revenue in Q2 increased year-over-year to 12.4%, primarily due to higher incentive compensation, insurance, and claim-related costs, and some strategic investments in the current period to support future expansion efforts. For the full-year, we continue to expect SG&A expense as a percentage of revenue to be in the mid to high 12% range. Depreciation and amortization in Q2 was $122 million, up slightly from a year ago. For 2026, we now expect depreciation and amortization in the range of $475 million-$485 million.

[Eric Dugas, EVP and CFO at Clean Harbors]

Second quarter income from operations was $269 million, up 28% from the prior year. Net income in Q2 increased 34% as we delivered EPS of $3.22 per share. Turning to the balance sheet on slide 12, we ended the quarter with cash and short-term marketable securities of $517 million. These cash balances will help fund the M&A activity we discussed today, as well as the other capital allocation priorities that Mike outlined. We closed the quarter with a net debt to EBITDA ratio of approximately 2x, while our debt carried a blended interest rate at quarter end of 5.2%. Turning to cash flows on slide 13. Cash provided from operations in Q2 was $239 million, up 15% from a year ago. CapEx, net of disposals, was $124 million, up nearly $40 million from the prior year.

[Eric Dugas, EVP and CFO at Clean Harbors]

We advanced our strategic growth investments in Q2, including the SDA unit and our vacuum truck fleet expansion. Those accounted for more than half of that year-over-year increase, with the remainder coming from investments in our base business. Adjusted free cash flow, which excludes spend from these strategic projects, was $136 million in the quarter, up slightly from the prior year. For 2026, excluding our expected $85 million of spend on the SDA unit, $25 million related to our fleet investment, and $10 million related to our data center strategy that Eric highlighted, we now expect net CapEx to be in the range of $370 million-$430 million, with a midpoint of $400 million. This represents a $20 million increase versus the guidance we provided in May due to incremental capital investments related to some attractive growth opportunities in select markets, as well as new customer wins and PFAS-associated work.

[Eric Dugas, EVP and CFO at Clean Harbors]

These opportunities and related CapEx investments are intended to accelerate growth in both the near and long term. During Q2, we bought back approximately 84,000 shares of stock at an average price of $298 a share. At June 30, we had just under $550 million remaining under our share repurchase authorization. Turning to our guidance on slide 14. Based on first half performance, planned investments, and current market conditions, we are now guiding to a 2026 adjusted EBITDA range of $1.35 billion-$1.41 billion, with a midpoint of $1.38 billion, and representing a $110 million increase from our prior guidance. We expect meaningful increases in both of our operating segments and are confident in our revised outlook. At the midpoint, this updated 2026 guidance now implies adjusted EBITDA growth of $210 million, or approximately 18%, versus 2025.

[Eric Dugas, EVP and CFO at Clean Harbors]

Looking at our annual guidance from a quarterly perspective, we expect third quarter adjusted EBITDA to grow 24%-28% year-over-year on a consolidated basis. Looking at how our annual guidance translates into our reporting segments. At the midpoint of our guidance range, we now expect our 2026 adjusted EBITDA in Environmental Services to grow 6%-9% for the year. We enter the back half with strong demand across all of our businesses. This range does include approximately $5 million in contributions from the Terra Nova acquisition. This guidance assumes no contribution from ES&H. Once we conclude the regulatory process and close on that transaction, we will update our guidance accordingly.

[Eric Dugas, EVP and CFO at Clean Harbors]

This 2026 guidance midpoint now assumes that our SKSS segment delivers approximately $275 million of adjusted EBITDA, double the amount we delivered in 2025 and significantly higher than the $165 million we provided in May when we expected the sharp spike in base oil prices to be more temporary. There remains substantial uncertainty around the duration of current market conditions and how long they will impact petroleum-derived products such as base oil. While there is potential for more upside given the state of the market, we believe $275 million is an appropriate assumption at the current time. Within corporate, at the midpoint of our guidance, we now expect negative adjusted EBITDA to increase by approximately 8%-10% compared to 2025. This growth from our prior guidance is driven by higher incentive compensation, insurance claim costs, acquisition impacts, and strategic investments we're making.

[Eric Dugas, EVP and CFO at Clean Harbors]

Looking at it as a percentage of revenue, we still expect corporate segment results to remain flat in the prior year. For 2026, we now expect adjusted free cash flow in the range of $520 million-$580 million, with a midpoint of $550 million. This represents a $30 million increase versus our prior guidance, reflecting the higher adjusted EBITDA we now anticipate this year and considering acquisition impacts in the revised CapEx assumptions. In closing, I share Eric and Mike's enthusiasm about our growth prospects for 2026 and beyond. Resiliency, broadening capabilities, and profitable growth have long been hallmarks of Clean Harbors, all of which have been demonstrated over the past several years. Even when external market conditions were not entirely favorable, we have continued to grow by executing well, taking market share, and expanding many of our service offerings.

[Eric Dugas, EVP and CFO at Clean Harbors]

This year, we are starting to see some of those macro conditions turn in our favor, which is why our growth rates have been increasing. We remain a critical vendor and partner for our customers, and for many of them, we serve as their sustainability solution. We are bullish about our profitable growth for both of our operating segments in the back half of this year. We remain focused on executing against our longer-term vision and goals. With that, operator, please open the call for questions.

[Operator]

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Tyler Brown with Raymond James. Please proceed with your question.

[Tyler Brown, Analyst at Raymond James]

Hey, good morning.

[Eric Dugas, EVP and CFO at Clean Harbors]

Morning, Tyler.

[Operator]

Hi, Tyler.

[Tyler Brown, Analyst at Raymond James]

First off, just congrats to Alan. Wishing him all the best. Eric D., there's quite a few moving pieces in the quarter. I think the guide's up maybe $110 million. It looks like most of that's from SK, can we talk a little bit more about the ES guide? Again, there kind of seems to be a few things, and maybe you can parse it out, on the good side, it looks like you have Terra Nova. It sounds like some stronger ER work in Q3, and you got the new contract as positive, maybe Industrial Services is slightly lower. Would that be right? Can you just give us any help on kind of what's going on inside of the ES guide specifically?

[Eric Dugas, EVP and CFO at Clean Harbors]

Sure, Tyler. I think you hit on a couple of the big moving pieces there. In total, we did raise the guide for the full-year about $30 million. $10 million of that is Terra Nova. The remaining pieces there, certainly the good momentum we're seeing exiting June and into the second quarter has been strong, both on the volume and continued pricing side. The new contract that we talked about will kick in in the fourth quarter. We've got some upside from that. There's other opportunities that we're seeing as well that's providing a good momentum in Environmental Services. When I look at Industrial Services, I think similar to the comments we had last quarter when we look at the back half with Industrial Services right now, kind of flattish to last year.

[Eric Dugas, EVP and CFO at Clean Harbors]

If we see any type of escalation in kind of turnaround activity, that would be upside to our current guide. On the field services side, that business has really performed well for the last year or two here, winning some big jobs. We do have some nice things that we're working on currently to support the back half. I think a lot of good momentum leading into the second half of the year in Environmental Services, and we should see some kind of sequential margin improvement here in Q3 and Q4 as well.

[Tyler Brown, Analyst at Raymond James]

Okay, perfect. Just if we can kind of touch on Industrial Services a bit more. I kind of get it. The refineries are kind of running, excuse me, all out, given crack spreads. Eric G., there have been some higher profile, call it accidents, in the past few months, and I'm just kind of curious how you're thinking about Industrial Services over the next couple of years. It just kind of feels to me that all this deferred maintenance is starting to really stack up, and maybe eventually some of these plants are just simply going to have to be turned around. Maybe something similar to what we saw post-COVID. I'm just curious, just any thoughts about Industrial Services over the next few years?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah. Tyler, thanks for the question. When we look at year to date and what's happening with the refinery demand, we all know that they're all running very hard to make product flat out. We've positioned ourselves very well with all those refineries that when they have downtime, for example, the couple of incidents that you spoke of, that we're going to be really well positioned to be able to help them. Our relationships with those refinery customers have continued to grow tighter

[Eric Gerstenberg, Co-CEO at Clean Harbors]

We're providing more services for them overall. We're pretty bullish that when the turnarounds happen, for whatever reason, that we're going to be strategically well-positioned. While the overall year to date looks that our turnaround count is down probably about a third year-over-year, we're well-positioned to capture on that. Additionally, the team has done an excellent job of making up for the refinery downtime in other specialty businesses, and our growth in our specialty lines of business within Industrial Services is up about 14%-16% year-over-year. We feel pretty good about that trend, and we focused on putting more branches around our customers to grow our specialty business and the technology that we're deploying there, which is really just nice efforts by the team.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Our base business also, when you think of our base business within Industrial Services and the amount of personnel, over 2,500, that we have working day in, day out at customer sites, that business is up about 2%-4% from a revenue standpoint as well in the industrial world. We feel good about that. Lastly, I continue to touch on what we talked about in our script, is that we're bullish on the opportunity in data centers and how we can grow with data centers to more than offset any of the decline in what continues to happen in the refinery and the chemical world. We're deploying capital. We're standing up additional branches. Those are services that we do well, and we're tailoring them to the data center world.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

We feel quite good that our growth prospects overall between specialty and data centers are strong. We've also been doing a lot in the IS world to make sure that we're capturing everything that we can capture through AI initiatives and specialty Industrial Services platform that help us run that business and make sure we're charging accordingly for our services to expand our margins. While overall, the refinery demand for turnarounds is down, it's become a smaller percentage of our overall business, we're bullish on other areas that we're implementing hard throughout the organization to grow IS and grow the margins with that business.

[Mike Battles, Co-CEO at Clean Harbors]

The good thing, Tyler, is I agree with all the things that Eric just mentioned as far as the long-term growth process. I'm really excited about it. The good news is in the guide that we just spoke of, that's on the come. If that happens, that's upside. I think that we're actually pretty thoughtful and balanced in our view as it's been kind of back half of 2026.

[Tyler Brown, Analyst at Raymond James]

Yeah, perfect. All right, thanks, guys. I'll turn it over. Thank you.

[Mike Battles, Co-CEO at Clean Harbors]

Thanks, Tyler.

[Operator]

Our next question comes from the line of Noah Kaye with Oppenheimer. Please proceed with your question.

[Noah Kaye, Analyst at Oppenheimer]

Thanks for taking the questions. A lot of growth initiatives to talk about this quarter. I'll just ask about two of them. First, data center. This is really interesting. Liquid cooling is growing probably 35%-40% CAGR over the next five years. There are some really stringent requirements for liquid cooling management around pH and turbidity and particular requirements, and we've seen some of the equipment vendors and EPCs add flushing and filtration services. Can you talk a little bit about your competitive differentiation and right to win when you're dealing with highly sensitive materials? Can you help us understand what capabilities you're building up with that $50 million in CapEx?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Great question, Noah. I first start out by saying that our industrial team has been doing flushing of systems, I'll call it at a broad scope, for a long time. We've had the people, the technology, the engineering staff to be able to support those types of jobs within chemical plants and refineries for a long time. What we're really doing is adapting those services, same things, same technology into data centers and adding in the chemical passivation that we're doing. Connecting a system, flushing the data center after they've built it, removing all the residuals, and put protective coatings on to be able to make sure that those cooling systems meet the demand.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Really investing in that flushing and passivation that we've done all along and building out our scale, building out more of a structured sales team around it that are aligned closely to those hyperscalers and general contractors. We're pretty well prepared to leverage people and technology that we've already had within the business and operating in other large scale plants and apply that to data centers. It's working for us. There's high demand. We've got a good brand. We got good people in our HPC and Clean Harbors Industrial, and so we're pretty excited about our path ahead here.

[Mike Battles, Co-CEO at Clean Harbors]

The good news is, Noah, we've been doing this for a long time, and we have an industry-leading safety record, an industry-leading compliance record. We have the national footprint, and as Eric talked about in the prepared remarks, it's going to be growing, but it's modest growth. It's modest growth over the next few years, with obviously a much higher upside.

[Noah Kaye, Analyst at Oppenheimer]

Yep. Helpful. Thank you, guys. On the large manufacturing contract customer, congratulations on landing that. You mentioned they're in manufacturing. Maybe you can help us understand a little bit more, give us a little more color about what that's exposed to and what investments you need to make to support that contract ramping through 2030.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, we would hate to go into the specific vertical. I'm sure that will come out at some time. However, it's predominantly leveraging our back-end disposal market, incineration, as well as complex wastewater treatment. We've had a nice technology that's been deployed within the organization back to the early 1990s, called Clean Extraction System, that utilizes supercritical carbon dioxide to remove organics and recycle the wastewater, which was very compelling technology for this customer to complement incineration. We're looking at their waste streams and how do we not only just provide incineration and capacity, but also recycling services and a total waste management concept with them, which all went to play for us in helping to assure that contract.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

When you look at the contract, it's going to ramp up over the next four to five years, about $15 million-$20 million of revenue per year, and then get to an $80 million-$100 million run rate. When you think about what we have to add, we're taking some of our great insight people and putting them right on the customer sites. We're also adding additional trucking and driver capacity. All things that we can build on from our national fleet to be able to service this customer and provide them the redundancy and the recycling and the incineration services that we need. Perfect example, similar to some other major customers we talked about in the past, where we're getting embedded, providing the services they need, leveraging our unique capabilities and disposal assets for them.

[Mike Battles, Co-CEO at Clean Harbors]

What I like about it, though, is that-

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah. Go ahead, Mike. Sorry.

[Mike Battles, Co-CEO at Clean Harbors]

It proves the reshoring theory. It's evidence of that. It's perfect evidence of that.

[Noah Kaye, Analyst at Oppenheimer]

Yeah, it also proves you guys are not waiting around for the IS refinery turnaround. There's some real growth initiatives here to take that business higher. Nice job, guys. I'll turn it over.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks, all.

[Mike Battles, Co-CEO at Clean Harbors]

Thanks, all.

[Operator]

Our next question comes from the line of James Schumm with TD Cowen. Please proceed with your question.

[James Schumm, Analyst at TD Cowen]

Hey, good morning, guys. Congrats on a great quarter.

[Mike Battles, Co-CEO at Clean Harbors]

Thanks, James.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks, James.

[James Schumm, Analyst at TD Cowen]

Let's just talk about SKSS for a minute, if we could. Just kind of curious if you can help with the expectation for 3Q and 4Q, with the $275 million EBITDA guide for the year, what does that imply for the quarters? Are you assuming sort of flattish at the $93 million level for the third quarter and then $55 million in the fourth quarter? What should we expect there?

[Eric Dugas, EVP and CFO at Clean Harbors]

Hey, James, it's Eric. I'll start. Similar to last quarter, I'd like to share some of the assumptions we have behind that. I think pretty similar to what you just mentioned, when we move into Q3, assuming pricing remains at an elevated point, kind of similar to where we are today, and then begins to trail back down in Q4. What I would tell you is we see Q3 here maybe a little bit better than Q2, just on some differences around some turnaround timing that we had early in Q2, and then Q3 kind of trending down for the balance to arrive at that $275 million. We'll continue to update assumptions next quarter, but that's how we see the business today.

[James Schumm, Analyst at TD Cowen]

Okay. Thanks, Eric. Is there any refinery maintenance that we should be aware of in the third or fourth quarter that's significant or noteworthy?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Nothing more than already planned.

[Eric Dugas, EVP and CFO at Clean Harbors]

Yeah. Nothing more than normal.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Typical shutdowns and downtime.

[James Schumm, Analyst at TD Cowen]

Okay. Then lastly for me, you guys mentioned market share gains, and I was wondering if you could elaborate on that. Was that in a specific segment or anything? What gives you confidence that you're gaining share? If you could just talk about that a little bit.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, sure. When we look at the second quarter this year, even as we've come out of the gates of this year-over-year, we've seen our volumes increasing in multiple different areas. When you look at waste volumes in particular, containerized waste volumes, our drum business has been growing in both our Clean Harbors business and our Safety-Kleen Environmental business. We came out of a record June. When we look at some of the trends that we're seeing and how we're growing those volumes, we're certainly getting tighter with customers. We're expanding and taking over more traditional white space that other vendors may have had.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

The way we're doing that is really continuing to get embedded with those customers through our insight programs and what we refer to as our total waste management program, where our people are embedded in our tools and our systems to help them manage their waste needs. By offering that type of service and that type of waste management, we're managing waste streams into our network, we're providing additional types of services, and we're also providing traditional waste streams that we didn't typically manage, but managing those into third-party vendors. Really providing a full service with the customer. All those things combined is really what we see that in larger RFPs, that there's more that Clean Harbors, we have the footprint to be able to offer. We think that's translating into market share gains with existing and future customers, and that's translating into our numbers.

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Yeah. The only thing I would add to that is that a lot of our competitors are private. It's hard to get a sense of what those are. If we look at our pipeline, we look at our results, it's growing much faster than any market data I can see. We give confidence to that because the numbers would tell you that.

[James Schumm, Analyst at TD Cowen]

Got it. Thanks a lot, guys. I appreciate it.

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Thank you.

[Operator]

Our next question comes from the line of Adam Bubes with Goldman Sachs. Please proceed with your question.

[Adam Bubes, Analyst at Goldman Sachs]

Hi, good morning. The Safety-Kleen Environmental Services business continues really robust growth performance, I think 11% in the quarter. Can you just help us understand what's driving that? How would you break that out between pricing and volume? Is the volume side reflective of market share gains or favorable underlying demand? Just help us understand that performance.

[Eric Dugas, EVP and CFO at Clean Harbors]

Hey, Adam. Eric here. You're absolutely right. We're thrilled with the performance that business continues to put forth. When I think about that 11% growth, typically we see price to volume ratios there about 50/50. Maybe a little bit closer to 60/40 on the price side here as some of the fuel recovery charges kind of kick in to make that higher. I think that's a business that we see evidence of taking market share in that business as well, going back to the last question that we had. We can see it in the volumes, as Mike alluded to. It's also an area of business where we've done a really nice job of retaining our people. The drivers in that business are really the key to growth there. They get to know their customers.

[Eric Dugas, EVP and CFO at Clean Harbors]

They get to know their regions and ZIP codes that they service. We're seeing more and more customers come to Clean Harbors in that business as well, as well as growing with the customers there. To answer your question directly, probably in this quarter, 60% pricing, 40% volume, but still very strong.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah. Just to build on that a little bit more. When you think about the lines of business that we offer under the Safety-Kleen environmental footprint, and you break it down a little, an area that's been showing real high growth rates within it is our vac services. Close behind that is our containerized waste services and even our parts washer revenue and our margins there. They're all contributing. Every one of the lines of business within that business unit have been growing pretty well, and we're making investments. When we talk about the vac expansion and that $25 million over the next two years that we're spending in capital, that's all around supporting that business growth.

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Yeah. What's interesting, Adam, is that 11% is obviously kind of eye-popping, and Eric did a good job of explaining it. That business has grown at this high single-digit rate for many years. It really is a great business model that deserves a high multiple and it deserves high valuation because it's higher. Low double digits is obviously better. If you go look back at the trends for the past five, six, seven, eight years, even before COVID, it's a high single-digit grower. It's been for many years, something we're really proud of.

[Adam Bubes, Analyst at Goldman Sachs]

Great. Appreciate the color there. Then on the SKSS side, thanks for the detail on the cadence in sort of the back half, what are the assumptions embedded in guidance on base oil pricing and your re-refining spreads relative to 2Q levels?

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

I'll take this, Adam. I would say that we follow industry guidance that we get, Q3 is strong, as Eric Dugas mentioned. We do have base oil pricing coming down in Q4, and that's leading to a lower guide. Who knows? We're using industry guidance to kind of give us some direction as to how we're thinking about base oil pricing. We just use that as our model.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Adam, just one other thing to add. When you think about the current market conditions year to date in the SKSS business, one thing that we're really seeing develop here is not only significant demand for Group III, so we continue to amp up our efforts to make as much Group III product as we can. We're also seeing really heavy traction in our closed loop offering that Mike talked about in his script. What that means, obviously, is that not only are we collecting used motor oil, but they're buying our quality blended oil products from us on a customer-to-customer basis, and we've seen a tremendous uptick and pretty excited about where that can now go on the current market conditions. The team has done a great job of deploying that closed loop, and we've had other players that work with us on that.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

We're excited that those two are, along with the SDA and others, are contributors to really getting to that cadence that we all want around stabilization of the EBITDA across that SKSS business.

[Adam Bubes, Analyst at Goldman Sachs]

Great. Thanks so much.

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Thanks, Adam.

[Operator]

Our next question comes from the line of Jerry Revich with Wells Fargo. Please proceed with your question.

[Jerry Revich, Analyst at Wells Fargo]

Yes. Hi. Good morning, everyone.

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Jerry.

[Jerry Revich, Analyst at Wells Fargo]

Hi. I wanted to ask on the manufacturing side, we've gone from an environment over the prior 20 or 30 years of offshoring, now we've get the benefit of reshoring. From a Clean Harbors standpoint, can you just talk about which pockets of manufacturing reshoring are really additive to your opportunity set? We're seeing, obviously, power and gas compression and semis and electronics. Can you just talk about what moves the needle for Clean Harbors as you look at the U.S. manufacturing plans? What are you folks excited about from an end market standpoint, and what's the magnitude of upside to Clean Harbors?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Clearly, at the tops of the list are around semiconductor. You mentioned that one. When you think about that Phoenix area, the Texas area, we've been building out our platforms there to service those customers and see real activity and large scale plans to continue to onshore there. Also in the pharma area, general manufacturing, we're seeing solid opportunities there that play themselves out in the coming years. That would be close to that as well. In other smaller areas too, when you think about programs like around aluminum manufacturing, that's another area we're seeing more startups again of making more aluminum, as an example of more onshoring and other products like that.

[Mike Battles, Co-CEO at Clean Harbors]

You know what's interesting is that many different end markets and many different verticals generate hazardous waste. You'd be surprised about hazardous waste comes from all different facets of the U.S. economy. Whether it be in healthcare or in retail, we're seeing growth in those areas as well. Areas you just wouldn't think that you'd get a lot of growth out of, we're seeing good growth in those areas as well.

[Jerry Revich, Analyst at Wells Fargo]

Great color. Thank you. Can we shift gears? In SKSS, obviously, really strong returns business for you folks through the cycle. Anything you can do to reduce the cyclicality at a time like this? Is it an option to enter into long-term contracts, maybe shave the peak and maybe improve the trough price realization? Is that an option for you? Are you folks thinking about that at all, given your really strong competitive position for re-refined product?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Jerry, two of the big things, obviously, that we've talked about to reduce the cyclicality is number 1 around that Group III, producing more of that. Number 2, utilizing that and our other Group II+ to drive a direct blended program that leads to that closed loop relationship with key customers. We're seeing that with many key customers. We're also seeing that the large refiners really love our product too, to complement their suite of products. Probably about 70, 80%+ of our Group II+ base oil or Group III is working with those large refiners.

[Mike Battles, Co-CEO at Clean Harbors]

I would say, Jerry, that if you look at the cyclicality is, we sell a commodity product, that product moves up and down based on a variety of different factors. If you open up the aperture and look at the last five years and where the guide is as of today, and you do a simple average, it's in the mid twos. We feel like it's going to be hard for us to say, Okay, what's next year? What's the year after? It's based on what the price of base oil is. All the points that Eric just mentioned around more Group III, selling to new customers, working with large refiners, all that's very true, ultimately, you got to look at the longer term horizons. We're obviously excited about the business this year. We've always been excited about the business.

[Mike Battles, Co-CEO at Clean Harbors]

Done a great job this year managing the spread. You got to look at it over a longer term horizon, because it's going to be cyclical.

[Jerry Revich, Analyst at Wells Fargo]

I appreciate the discussion. Thank you.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks, Jerry.

[Operator]

Our next question comes from line of Jim Ricchiuti with Needham. Please proceed with your question.

[Jim Ricchiuti, Analyst at Needham]

Thank you. To a couple of those growth drivers you identified, just on the data center opportunity, can you say what kind of revenues you're generating currently in this market and maybe help us with the growth rate you're anticipating this year?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah. To begin, when we look at our estimated revenue this year, we're going to be in that $15 million-$20 million range. Our growth plan is that by 2029, we'll be on an annual run rate of about $200 million+. Our buildup plan is really around that. That business, what we've seen with it, with the expertise that we have, is a nice margin business in that mid-to-upper 20s area on that revenue. We feel pretty good about that.

[Jim Ricchiuti, Analyst at Needham]

Total customers, can you say how many customers? I think you alluded to eight lines of business, but it sounds like initially tied more toward construction.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Exactly. The lines of business, really, when you break down the eight lines of business that we referenced, they're really across all three different business units. Predominantly to start up and continue to build is around our IS business. ES business, really providing debris and waste removal and battery recycling and emergency responses we would expect there, too. On the SKE side, when you think about lubricants and fluid recovery and recycle, that business unit can benefit from what's going on with data centers as well.

[Jim Ricchiuti, Analyst at Needham]

I think you alluded to PFAS project in the quarter. I'm wondering if you can just give us any update on how the PFAS business is tracking this year, just in terms of perhaps % of revenue, the growth, and whether your expectations have changed at all over the near term for this part of the business. Sounds like it's still going to be a good long term driver.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah. I would say that our expectations have accelerated a little this year. I'm sure our team will too. When we talked in the past, we were looking at a pipeline and a revenue growth of about 20% per year. When you look at the level of business that we have this year, it's really grown to be a 30%+ increase year-over-year. The large project that we referenced, as many of you know, we did a large emergency response for a customer. That translated into, after the emergency response was done, into a PFAS treatment and remediation project from that event. That's really what the team was executing on in the second quarter. We also see continued momentum. We talked about last quarter where the DoD, the Department of War, has officially lifted their moratorium around incineration.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Our team has been out there pounding the pavement, meeting with 700+ military installations, some of those really need to make more progress sooner. There's been a large push to do that. The framework that we've laid out in the past about how to handle PFAS in its different shapes and forms has made traction. We continue to be bullish, we think we're deploying the people and the assets, have the complete total solutions around PFAS. We're feeling pretty good about it.

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Jim, we had a great quarter on PFAS. Even if you take out the large event that Eric referenced, we think that that 30%+ growth rate is really getting some good traction for all the reasons Eric mentioned. I think that we're really seeing the benefits of that, not just in the U.S., and in Canada. We're starting to see some of that growth in Canada as well.

[Jim Ricchiuti, Analyst at Needham]

Got it. Thanks very much.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thank you.

[Operator]

Our next question comes from the line of Shlomo Rosenbaum with Stifel. Please proceed with your question.

[Shlomo Rosenbaum, Analyst at Stifel]

Hi, good morning, and thank you for taking my questions. It was good to see that incinerator utilization go up to 91%, but I thought maybe you could talk a little bit about where we are in pricing versus volume in the quarter, and how did it shake out for your incinerators? How did the mix shake out?

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Sure. I'll take that, Shlomo. Incinerators, as you all know, are kind of grouped into that tech services line of business where we saw the 18% growth. If I had to parcel out that 18% in totality, I'd say it kind of breaks out in thirds. A third of it is probably good project volumes that we saw throughout the quarter, inclusive of the job that Eric just mentioned related to PFAS. The remaining two-thirds is probably equally split between pricing as well as increased volumes and mix. I'd say a third, a third, a third there. When you think about the categories in general, we're really excited about continuing to see significant volume increases really across all of our disposal outlets, not just incinerators, but landfills as well, and then the other technologies we have.

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

That gave us a lot of confidence and has led into the increase in guide across the environmental services space.

[Shlomo Rosenbaum, Analyst at Stifel]

Okay, great. Maybe I could pivot a little. Where are you on the charge for oil? Just in terms of on a sequential basis, I know you talked about it year-over-year, but with the rise in oil prices, are you seeing more competition now where people are willing to kind of just take it for free because they're able to start to refine it? What are you seeing over there?

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Shlomo, that's really the great story in the quarter. That even though base oil pricing's been up quite a bit, we've been able to continue to charge for oil up year-over-year, which I think is just a real testament to the team and their ability to drive that. It's down a little bit sequentially, down a little bit as we guide into Q4. I think what the amazing story is that although pricing is very high, which we all know, we're continuing to have good traction on the CFO program. The reason why we've worked very hard to drive the business from a PFO to a CFO, we loathe to give that back. I think we have all the resources, the assets, and the people to hold the line there.

[Shlomo Rosenbaum, Analyst at Stifel]

Okay. When you're just talking about holding the line, can you give a little bit more detail? In other words, you're just expecting even if we go back to pre-war levels, you'd still be able to maintain it within 10%-20%? Just how should we think about that?

[Jim Buckley, SVP of Investor Relations at Clean Harbors]

Our goal is to stay at CFO, no matter what happens to the price. Never go back to PFO. That's the plan.

[Shlomo Rosenbaum, Analyst at Stifel]

Okay. Then just one more pivot. Just with that acquisition of ES&H, it sounds like this is more of a maritime type of acquisition. I was just wondering, what makes you decide at this point in time that that's just a good place to expand into? What are some of the capabilities that they bring in particular that you didn't have already? Is it really just geographic expansion, or is there something in particular that they do that's unusual?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

I wouldn't call it a maritime play at all. I think that what we're looking at by acquiring that business is very similar to our traditional field service business. All along the coast, all along the waterways, we've always had boom and equipment and the resources and the capabilities. We've been in OSRO as well, as we've talked about there. Those capabilities are part of the heart of what Clean Harbors has done every single day. It is a nice concentration of branches that complement our network in that Louisiana and Texas area. Expanding our footprint, which we've talked about over the years, is where we've been looking to open 15-20 field service branches within the organization, within North America on an annual basis.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

This really hits the mark of creating a better presence, a bigger presence for us around that Louisiana and Texas market, where we were a little bit light on our field services revenue. It's a great fit there. Additionally, Mike had mentioned in his script the capabilities of Forefront, and that business, that's a sub-business of the ES&H footprint. That is really working with large companies that need emergency response plans and drills, have our retainers associated with them. We've done that as Clean Harbors over the years, but the scale that ES&H has built there and the market, looking at that Forefront capabilities and the people there, is really helping us launch that as well. A great fit overall complementing our field services presence, our business that we've been growing there.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

HEPACO, as you know from the past, very similar field service acquisition that had a lot of benefits to the organization. We see ES&H very similar to that.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

We're really excited about it. It just helps us in an area that we don't have a huge presence in. That Forefront technology, as Kirsty mentioned, we're going to be able to leverage that pretty well across a nationwide rollout.

[Shlomo Rosenbaum, Analyst at Stifel]

Okay. Thank you.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thank you.

[Operator]

Our next question comes from the line of Larry Solow with CJS Securities. Please proceed with your question.

[Larry Solow, Analyst at CJS Securities]

Great. Good morning, everybody.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Hey, Larry.

[Larry Solow, Analyst at CJS Securities]

Good morning. Echo the best wishes to Alan on a quarter of a century run for CJS and Clean Harbors. Thank you to him. Best wishes. I guess, just on the large contracts you guys announced, it sounds like a new customer or significantly incremental higher revenue. It feels like it's just a convergence of, you mentioned companies wanting to use a common service provider. Your capabilities obviously probably are by far the best in the U.S., and then just more onshore manufacturing coming on board. It feels like maybe we'll even, as you go forward, see more of these type of larger or contracted business. Is that fair to say?

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Yeah, we feel pretty positive about that, Larry. You mentioned that, when you think back to our large acquisition of a customer growing with 3M, which dates back to a number of years.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Very similar type growth where that customer and this new customer, and we're seeing trends of other customers, really want to have a service provider that have a national footprint with redundancy, with a real strong safety and transportation network and trans-compliance network that can not only manage just our things like incineration and wastewater, but also have processing capabilities and recycling capabilities of solvents and wastewater treatment and landfill. We just have such a great large network to be able to leverage with large customers who need that redundancy and service capabilities nationally.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

We feel that as more and more reshoring, onshoring happens, there seems to be that sense where we see the momentum out there in it, and we have great tools and great people to be able to grow with those large customers and provide them the assurity that they need to properly manage and track their waste streams.

[Larry Solow, Analyst at CJS Securities]

Just on the ES&H acquisition, the margins on that, pretty good. It's like mid-30s. Is that driven just by mix? Is the water cleanup, I know generally ER is higher margin work. Is that the primary driver of those good margins? It sounds like this Forefront will probably have good margins as well, but maybe that's still a relatively modest business today.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

The Forefront has good margins, but the legacy business too. Very similar to what we've been doing when you think about ERs and base business. They are a little bit heavily more weighted towards ER, which is high margin, as an overall percentage. When you compare their margins of ER and base business to ours, pretty close. We're, again, just a great complement.

[Larry Solow, Analyst at CJS Securities]

Got it. Great. Appreciate it. Thanks, guys.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thank you.

[Operator]

Our next question comes from the line of Tobey Sommer with Truist Securities. Please proceed with your question.

[Tobey Sommer, Analyst at Truist Securities]

Thank you. A single question for me. Could you discuss the return profile on acquisitions that you've announced this year and maybe compare and contrast them with the internal investments that you've articulated so far on the call in data center, new branches, et cetera?

[Mike Battles, Co-CEO at Clean Harbors]

Sure, Tobey, I'll take that. It's Mike. When you think about the M&A that we've done so far this year, the ones we've announced, and you do the analysis around what the multiple is that we paid on an annualized basis, they're all under 10. I think that's a pretty good answer, and it really shows the discipline that we've had. If you look back a year ago, we didn't have a lot of acquisitions, it wasn't because we weren't trying and looking at things. We're very active in the marketplace. We just didn't land on anything. This year, we've been able to go land on it, with the same level of discipline and thoughtfulness. When you think about the internal investments, those tend to be very good returns. Because there's more risk involved in some of these deals, they take longer.

[Mike Battles, Co-CEO at Clean Harbors]

We have a higher risk profile on these. We think that the investments we're making in back trucks or in the SDA unit or in other things we're talking about, whether it be data centers, have an incredible return over time because of the fact that it's self-help. It just takes longer.

[Operator]

Our next question comes from the line of David Manthey with Baird. Please proceed with your question.

[David Manthey, Analyst at Baird]

Thank you. Hey, good morning, guys. First, could you dissect the EBITDA guidance change here? As I'm looking at it looks like $110 million at the midpoint for a delta. You picked up $110 million on SKSS, going from $165 million-$275 million. My calculations are corporate is maybe a $15 million bad guy. Does that imply that ES in the new guidance is $15 million higher and $10 million of that organic? Does that all add up?

[Eric Dugas, EVP and CFO at Clean Harbors]

Yeah, Dave, I think you're spot on there. An increase of $15 million in ES offset by corporate, as you imply. I'd also point out, though, for the full-year, we're up $30 million from where we thought we would be back in February when we first entered this year. It has to do with a lot of the good momentum that we've highlighted in ES.

[Mike Battles, Co-CEO at Clean Harbors]

In ES.

[Eric Dugas, EVP and CFO at Clean Harbors]

Yeah.

[David Manthey, Analyst at Baird]

In ES, yeah.

[Eric Dugas, EVP and CFO at Clean Harbors]

Lots of good growth in ES is what I want to highlight there.

[David Manthey, Analyst at Baird]

Okay. Then as it relates to ES profitability, you touched on a few of these items, but you saw 8% growth margin up just 10 basis points. Could you talk about the puts and takes within the year-to-year growth that affected the segment margin?

[Eric Dugas, EVP and CFO at Clean Harbors]

I think the two biggest things there, Dave, on the margin growth in Q2 for ES is really tough comps. On the field services side, we had a significant ER in Q2 of last year that had some particularly high margins. As Eric alluded to, with some of the comments around Industrial Services, a little bit of a tough comp there with Q2, just given the nature and the mix of work that we're seeing in the current year. I think as the year continues to roll out, again, the full-year forecast, 30 basis points-40 basis points of incremental margin year-over-year. Still on track with our expectations and quite frankly, still on the march to a longer-term Environmental Services segment margin profile of 30%+.

[David Manthey, Analyst at Baird]

Great. Thank you.

[Operator]

Our next question comes from the line of Nandita Nayar with Bank of America. Please proceed with your question.

[Nandita Nayar, Analyst at Bank of America]

Great. Morning, gentlemen. Thank you for squeezing me in here. Just two quick ones here. With regards to the incremental from Kimball this year, I believe we talked about an incremental of $10 million-$20 million of EBITDA. Could you just remind us what's baked into the updated guide and maybe how it's tracking so far this year? Thank you.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks. Our Kimball ramp-up continues to go well. The number of the $10 million is hitting the mark. Our tonnage expectation this year, ramping up the plant is ahead of plan. We're excited to continue to meet the expectations we had of bringing the Kimball incinerator online and really helping the network and helping our customers.

[Nandita Nayar, Analyst at Bank of America]

Great. I also just wanted to directionally just touch on the free cash flow outlook into 2027, 2028. I'm not asking for exact guidance, Mike and Eric. Would you say 2026 is maybe likely the peak for your growth CapEx initiative? I noticed we did step it up by $10 million or so this year, and you did talk about the $50 million that's spread across the coming three years. Just as you guys progress towards your mid-40s free cash flow conversion target, I was hoping you could just give us some color and maybe the bridge that gets us there. Do you see these return initiatives growing faster than the CapEx spend? Maybe we could see an acceleration in maybe free cash flow growth over the coming years. Just any color there would be helpful. Thank you.

[Eric Dugas, EVP and CFO at Clean Harbors]

Sure, Nandita. It's Eric Dugas. I'll take that. I'm sure Mike and Eric can add any color I miss. When we think about free cash flow and we think about free cash flow conversion, we're really targeting that 40% on an adjusted basis. Obviously, on top of that, you allude to some of the strategic incremental capital projects that are going on this year. A good chunk, but I think we're going to continue to see some investments there going forward. All of those investments we make, they go through a screening process, and they provide really good, higher than normal returns. That's why we choose to do them. What you're seeing there this year is some incremental projects, really the acceleration of some of the things we talked about in the past, as well as with new business opportunities. Some incremental CapEx there.

[Eric Dugas, EVP and CFO at Clean Harbors]

I would think about it as from an adjusted perspective roughly 40% this year is how it works out. We're going to continue to drive that number up. I hesitate to put a long-term goal on it at this point, just know that when we put out some long-range plans here internally, it's growing that 40% basis and continuing to do high return internal capital adjustments that can help us in the near term and long term.

[Mike Battles, Co-CEO at Clean Harbors]

The beautiful thing about it is that the CapEx is growing because the opportunities are growing. The pipeline's strong. As Eric said, June was the best month in the company's history. When you think about quote volumes, quote volumes are also the best month in the company's history. I really believe that the reason why we need to make these types of CapEx investments is because we see the long-term value creation over the next, to your point, 2027, 2028, 2029, and we need to make these types of investments today to drive that type of long-term growth. I'm excited about it. Data center is just one more good example of ways we can capture what we do well and leverage it.

[Nandita Nayar, Analyst at Bank of America]

Very clear. Thank you, gentlemen.

[Operator]

This concludes our question and answer session. I would like to turn the floor back over to Mr. Gerstenberg for closing comments.

[Eric Gerstenberg, Co-CEO at Clean Harbors]

Thanks, Christine, appreciate everyone joining us today. We hope everybody has a great summer, we hope to see some of you at our investor events in the coming months. Most of all, please have a safe rest of your week and a safe summer.

[Operator]

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a wonderful day.

Participants

Executives

• Tim Rodenberger, General Counsel
• Mike Battles, Co-CEO
• Eric Dugas, EVP and CFO
• Jim Buckley, SVP of Investor Relations

Analysts

• Eric Gerstenberg, Co-CEO at Clean Harbors
• Tyler Brown, Analyst at Raymond James
• Noah Kaye, Analyst at Oppenheimer
• James Schumm, Analyst at TD Cowen
• Adam Bubes, Analyst at Goldman Sachs
• Jerry Revich, Analyst at Wells Fargo
• Jim Ricchiuti, Analyst at Needham
• Shlomo Rosenbaum, Analyst at Stifel
• Larry Solow, Analyst at CJS Securities
• Tobey Sommer, Analyst at Truist Securities
• David Manthey, Analyst at Baird
• Nandita Nayar, Analyst at Bank of America