By the numbers
Q1 net income: $495M
Up 9% versus prior year, with a margin of 12.3%
Q1 adjusted EBITDA: $1.27B
Up 8.8% year over year, with a margin of 31.6%
- Overall results: Executives reported Republic Services had a strong start to the year, despite impacts from severe weather and downturns in construction and manufacturing volumes. The company reported continued gains in its sustainability initiatives, including opening of one new renewable natural gas project and two recycling facilities. Moody’s also upgraded Republic’s credit rating a day before the company’s earnings call on Thursday.
- Volume and pricing: Volumes were down 1.2% this quarter, which CEO Jon Vander Ark attributed to sluggish cyclical impacts dragging down large container business, among other factors. Severe weather negatively impacted the business to the tune of $25 to $30 million, Vander Ark said on the call. Core price was 6.1%, down from 7% in Q1 of 2024.
- Tariffs: Republic executives expect any tariff changes to have minimal impacts in 2025, but they said they were talking with suppliers about any tariff-related surcharges especially as it relates to 2026 capital spending plans. Vander Ark also noted that manufacturing waste volumes were likely affected by the uncertainty of current U.S. trade policy, and he said some “pent-up demand” for services could release once it gets clarified.
- Federal incentives: The federal government's shifting stance on clean energy tax credits is unlikely to significantly affect Republic's sustainability investments, executives said. CFO Brian DelGhiaccio noted Republic announced its investments in renewable natural gas and fleet electrification before the Inflation Reduction Act passed, and thus considered favorable tax credits from that law to be “additive” to the projects' bottom line. “We obviously want those credits to stay in place, but it would not have changed our decision or the return that we anticipated,” he noted. Vander Ark also noted RIN prices for renewable fuels would “probably” be higher with a different administration in office, but RNG projects “are still hitting their financial marks.”
- M&A: After spending about $358 million on acquisitions last year, Republic is still targeting over $1 billion in acquisitions this year. The company opened the year acquiring Shamrock Environmental, a roughly $700 million investment. Republic was previously a “big customer” of the industrial and wastewater treatment services company, and will add to the company's field services capabilities, said Vander Ark. He also noted Shamrock has some PFAS treatment technology that Republic was already contracting to handle its landfill leachate, which executives consider a beneficial capability to bring in-house.
- Environmental solutions: The company’s environmental solutions segment reported revenue of $466 million in the first quarter, up from $440 million year over year. DelGhiaccio said that was driven both by organic growth and acquisitions. However, weather impacts and project timing negatively impacted margins in the segment, he said.
- Recycling: Republic opened its Indianapolis polymer center in March, and quality testing for the facility's plastic flake product is “progressing well,” said Vander Ark. He said the facility would begin contributing earnings in the second half of the year. Republic also reopened a recycling center in Anaheim during the quarter. Vander Ark said that project was “a complete retool and rebuild” that ultimately would result in a better operation and reduced labor costs. “There’s just a continual movement across our 75-plus recycling centers ... every time you do that you put in some more automation and you take out some labor,” he said.
- Fleet: Republic reported having 80 electric collection vehicles and 27 facilities with commercial-scale EV charging infrastructure by the end of the first quarter. The company is still planning to have more than 150 total EVs in its fleet and more than 30 facilities with charging capabilities by the end of the year.
