Casella Waste Systems NASDAQ: CWST reported first-quarter 2026 results that management said came in ahead of internal expectations, supported by pricing, margin expansion, and acquisition activity. The company also raised its full-year guidance to reflect acquisitions closed to date, including the Star Waste deal that closed April 1.
First-quarter results: revenue up 9.6%, adjusted EBITDA up 12.3%
President and CEO Ned Coletta said Casella was “very pleased with our performance in the first quarter,” citing “solid financial results and margin expansion that exceeded our budget while also advancing our strategic priorities.”
Revenue for the quarter was $457.3 million, up 9.6% year-over-year. CFO Brad Helgeson said the increase included $23.9 million from acquisitions (including rollover) and $16.2 million of same-store growth, which he pegged at 3.9%.
Adjusted EBITDA was $97.1 million, up 12.3% year-over-year, and adjusted EBITDA margin was 21.2%, an improvement of roughly 50 basis points. Helgeson said acquisitions diluted margins by about 15 basis points in the quarter, while the base business (excluding acquisitions completed in the past 12 months) expanded margin by 65 basis points on a same-store basis.
Adjusted net income was $12.8 million, or $0.20 per diluted share, up $0.6 million and $0.01 per share. Helgeson said GAAP net income was lower year-over-year by $0.7 million due to higher acquisition expenses and additional costs tied to an organics facility closure during the quarter.
Pricing remains a key driver; volumes impacted by winter weather
Management emphasized realized pricing as a major contributor to performance. Coletta said solid waste pricing was up 5.1% overall, including 5.3% in collection and 4.7% in disposal. Helgeson added that solid waste revenues rose 10% year-over-year, driven by price, while volume was down 2.5%.
Within collection, Helgeson said price was led by 6.5% in roll-off and 6% in front-load commercial. Collection volume declined 2.1%, and Helgeson attributed softer roll-off volumes to “a quarter of difficult weather.” On the Q&A, he said roll-off volume was down “a little over 3%,” which the company often watches as a cyclical indicator, though he said the quarter’s decline was “probably more weather than it was economy.”
On the disposal side, landfill volumes increased. Helgeson said landfill volumes were up 19,000 tons or 2.3%, including 13,000 tons of internalized volume growth and 6,000 tons of third-party growth. Coletta also highlighted strength in construction and demolition tonnage, saying C&D volumes were up 13% year-over-year at landfills.
Asked about the acceleration in third-party landfill pricing, Coletta pointed to two drivers: a renewed focus on pipeline management and pricing discipline, aided by leadership changes, and what he described as reduced pressure from a rail move out of New Jersey that had been ramping over prior periods and is now “full.” He also said the company has been rebuilding its landfill sales oversight after a leadership change roughly a year and a half earlier and highlighted the hiring of Chief Revenue Officer Chris Rains, who joined in March.
Resource Solutions: commodity headwinds offset by contract structures and national accounts growth
Resource Solutions revenue increased 8% year-over-year, according to Helgeson. He said recycling and other processing revenue declined 2.7% due to lower commodity prices, while national accounts revenue rose 20.7%.
Helgeson said average recycled commodity revenue per ton was down 22% year-over-year, though he said the market has stabilized and the year-over-year comparisons should moderate. He added that contract structures adjust tip fees in down markets, limiting the net revenue impact of lower commodity prices to about $1 million.
National accounts volume grew 11.2% with price up 4.4%. Helgeson noted that national accounts can also support the core solid waste business because some work is serviced by Casella trucks but recorded intercompany. Including that impact, he said the company would have added 1% to the collection volume statistic for the solid waste segment.
However, Helgeson said national accounts is a “low margin” business on an EBITDA basis—“mid-single digits, mid-upper single digits”—because it is low capital in nature. He added that removing national accounts from the mix would be accretive to overall EBITDA margin, though the company views the business strategically favorably.
Efficiency, safety initiatives, and Mid-Atlantic synergy timeline
Colella cited initiatives including route optimization, fleet efficiency, and automation as contributors to operating performance. He also emphasized safety investments, including expanded triage programs for workers’ compensation and a planned fleetwide rollout of Lytx in-cab AI technology in 2026. Coletta said the company’s OSHA total recordable incident rate (TRIR) improved by 20% year-over-year.
In the Mid-Atlantic, Coletta said Casella has migrated “nearly all customers” to its Lead-to-Cash system and integrated customer payment portal, with the remaining migration expected to be completed “by the end of next week.” He said the milestone will allow the company to focus more on operational synergies through “route consolidations, automations, and facility consolidations.”
Casella reiterated cost synergy and savings targets it has previously discussed:
- Mid-Atlantic integration synergies: on track to cut $5 million of operating costs in 2026 and another $10 million over the next two years, according to Coletta.
- G&A savings: on track for $15 million of targeted G&A savings over the next three years, with phased timing that includes credit card convenience fees in the second half of 2026 and further system and back-office automation benefits in 2027 and 2028, Coletta said.
On the Q&A, Helgeson said the company sees “above-trend margin improvement opportunity over the next 2 to 3 years” due to “pent-up synergy opportunity in the Mid-Atlantic” and the opportunity for improved G&A leverage.
Acquisitions, landfill development, RNG royalties, and updated 2026 guidance
Acquisitions were a major theme on the call. Coletta said Casella completed four acquisitions so far in 2026 representing roughly $150 million of annualized revenue, including Star Waste, which closed April 1 and adds about $100 million of annualized revenue. Helgeson said the company is assuming roughly 20% EBITDA margin for Star Waste for guidance and said Casella is “bullish” on the opportunity to improve the business over time given its fit within the company’s greater Boston footprint.
Colella described Star Waste as a strong operator rather than a “fix-it” integration, citing investments in systems, processes, and facility upgrades. He also said initial synergy efforts will focus on routing and network efficiency, with potential longer-term internalization opportunities tied to future permitting and capacity development.
Casella also discussed its landfill footprint and permitting progress. Coletta said the company expects the Hakes landfill permit by the third quarter of 2026 and the Highland landfill permit by the first quarter of 2027. He said Highland’s expansion effort aims to more than double annual permitted tonnage from 460,000 to 1 million tons per year while adding “60 years of capacity.”
Additionally, Coletta said Casella completed a new rail transfer station at its McKean landfill, enabling acceptance of materials from gondolas and intermodal containers, including internalized MSW volumes from Massachusetts later in 2026. He framed the McKean landfill as a solution for Northeastern waste export needs, noting that about 30% of waste generated in the Northeast must be exported due to limited local disposal capacity.
On the call, Coletta also addressed Casella’s plan to close the Ontario landfill on Dec. 31, 2028. He said Ontario handles roughly 750,000 to 800,000 tons per year, primarily MSW, and that volumes would shift over time to Hakes and especially Highland. Coletta said Ontario is the company’s most expensive airspace to build and operate, while Hakes and Highland are among the least expensive, and he suggested the overall transition should be “pretty neutral” from an EBITDA standpoint, with a benefit on operating income and net income after closure.
Regarding renewable natural gas (RNG), Coletta said Casella has opted not to invest directly in RNG facilities, instead using partners that fund and develop the projects. He said results have been “mixed” and timelines longer than expected. Coletta said the company has four projects online, including two that came online in Q1 at Shamong and Highland with Waga. He said the portfolio is expected to generate “$ several million of EBITDA” in 2026, with more clarity expected over the next one to two quarters as projects move through shakedown.
Casella ended the quarter with $1.16 billion of debt and $127 million of cash. Helgeson said net leverage for bank covenant purposes was 2.29x as of March 31, and approximately 2.75x on a pro forma basis for acquisitions closed April 1, including Star Waste. He said the company has about $500 million of available liquidity to pursue additional opportunities while maintaining what he called “moderate leverage.”
Finally, Helgeson said the company updated full-year 2026 guidance to reflect acquisitions closed to date, increasing the outlook for revenue, adjusted EBITDA, and adjusted free cash flow. The updated ranges are:
- Revenue: $2.06 billion to $2.08 billion (up $90 million)
- Adjusted EBITDA: $473 million to $483 million (up $18 million)
- Adjusted free cash flow: $200 million to $210 million (up $5 million)
Helgeson said the updated guidance reflects roughly $120 million of new annualized revenue for nine months of 2026 from the acquisitions that closed April 1 and assumes adjusted EBITDA margins around 20%. He added the company has not increased its guidance for the base business after the first quarter and will reevaluate in future quarters.
About Casella Waste Systems NASDAQ: CWST
Casella Waste Systems, Inc is a regional resource management company headquartered in Rutland, Vermont. Established in 1975, the company has grown from a single-truck operation into a multi-state provider of integrated waste management solutions. Casella offers a comprehensive range of services, including residential, commercial and industrial waste collection, transfer station operations, landfill disposal, recycling processing and organics management.
Through a network of solid waste transfer stations, recycling facilities and landfills, Casella serves communities primarily across the northeastern United States and parts of the mid-Atlantic region.
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