10-Q · May 1, 2026
Casella Waste Systems reported robust Q1 2026 results, with revenue of $457.3 million, up 9.6% year-over-year, and a significant EPS of $0.20, exceeding estimates by 81.8%. However, the company faced a net loss of $5.5…
Earnings analysis · 10-Q
CWST earnings analysis
Filed August 7, 2026 · Our reading of the company's report
The latest report
Casella delivered strong year-over-year revenue growth to $543.7 million and diluted EPS of $0.40, with a substantial sequential improvement in operating margin to approximately 3.7%. Growth was broad-based and…
Read full summary
Casella delivered strong year-over-year revenue growth to $543.7 million and diluted EPS of $0.40, with a substantial sequential improvement in operating margin to approximately 3.7%. Growth was broad-based and acquisition-led, but gross margin remained below the prior-year level and Resource Solutions profitability declined. Operating cash flow improved, although $400.8 million of acquisition spending reduced cash to $25.5 million and increased debt by $195.2 million; liquidity and covenant compliance remain adequate.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.4
What stood out
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Strong revenue and EPS rebound
Revenue increased to $543.7 million from $465.3 million in Q2 2025, up $78.4 million or 16.8%, and rose from $457.0 million in Q1 2026. Diluted EPS was $0.40 versus $0.08 year over year and $(0.09) sequentially.
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Operating margin improved sequentially
Calculated gross margin was approximately 32.9%, versus 33.8% in Q2 2025 and 32.5% in Q1 2026. Operating margin was approximately 3.7%, versus 4.1% year over year and 1.1% sequentially; operating income increased $0.7 million year over year to $20.0 million.
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Acquisition-led segment growth
All operating regions grew revenue: Eastern increased $33.3 million, Mid-Atlantic increased $19.6 million, Western increased $15.6 million and Resource Solutions increased $9.9 million. Acquisitions contributed $41.7 million to quarterly solid-waste revenue growth, while pricing added $20.4 million.
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Operating cash flow strengthened
Operating cash flow increased to $161.0 million in the first six months from $139.6 million in the prior-year period. After $122.3 million of capital expenditures, calculated year-to-date free cash flow was $38.7 million.
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Liquidity remains available
Management reported $484.8 million of available and undrawn revolving-credit capacity and $25.5 million of cash as of June 30, 2026, and expects liquidity to fund cash needs for at least the next 12 months.
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Debt covenants remain compliant
The company was in compliance with its debt covenants, reporting a 2.70 consolidated net leverage ratio versus a 4.00 maximum and 7.84 interest coverage versus a 3.00 minimum.
What to watch
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Acquisition-driven leverage and cash drain
Cash and cash equivalents declined $98.3 million to $25.5 million from December 31, 2025, while debt excluding the current portion increased $195.2 million to $1,338.1 million. The company also spent $400.8 million on acquisitions in the first six months, increasing reliance on financing capacity.
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Fuel inflation pressures margins
Fuel costs increased to $25.3 million, or 4.7% of quarterly revenue, from $15.3 million, or 3.3%, in Q2 2025. Management estimates that a $0.50-per-gallon diesel change would affect direct fuel costs by approximately $9.0 million annually, with a similar estimated $9.0 million annual offset from energy and environmental fees.
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Resource Solutions profitability weakened
Resource Solutions operating income fell $3.4 million to $5.2 million despite revenue growth of $9.9 million. Management cited lower recycling volumes of $4.3 million, or 14.2%, in the quarter, lower recycled commodity prices of $0.6 million, and a $1.1 million organics-facility wind-down charge.
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Potential landfill development charge
Management identified a reasonably possible change in estimate related to the recoverability of some or all costs associated with the Granite State Landfill development project, potentially resulting in a future charge. The filing's environmental-proceeding disclosure threshold is $1.0 million.
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Variable-rate debt exposure
Approximately $470.0 million of long-term debt remained variable-rate at a weighted average rate of 5.190%. Management estimates that a 100-basis-point rate change would affect annual interest expense by approximately $4.7 million, or $1.2 million quarterly.
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No formal risk-factor revisions
No new formal risk-factor section changes were identified versus the 2025 Form 10-K; however, the filing reiterates that seasonal operating results can tighten liquidity and covenant headroom, particularly during lower-volume periods. The credit facility had $484.8 million of availability as of June 30, 2026.
Management's outlook
No quantitative revenue or EPS guidance was provided in the 10-Q. Management stated that cash and available operating and financing cash flows should be sufficient to fund operating activities and cash commitments for at least the next 12 months and thereafter for the foreseeable future.
Earlier filings 4
10-K · February 20, 2026
Casella presents a strategy focused on disciplined M&A and organic growth, investing in technology and landfill capacity while expanding its Resource Solutions business. Management closed nine acquisitions in fiscal…
10-Q · July 31, 2025
Casella reported quarter revenue of $465.3 million, up $88.1 million versus the prior-year quarter, driven by acquisitions and price increases across collection and disposal. Operating income declined to $19.3 million…
10-K · February 18, 2025
Casella Waste Systems, Inc. demonstrates a solid performance in 2024, driven by strategic acquisitions and organic growth. The company is advancing its position with an emphasis on landfill pricing, strategic asset…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.