Casella Waste Systems Q2 Revenue Jumps 17% but Net Income Slips; Cash Burn from Acquisitions Raises Leverage Concerns

summarizeSummary

Casella Waste Systems reported Q2 revenue of $543.7M (+16.9% YoY) but net income declined to $3.8M. Cash reserves dwindled to $25.5M after $400.8M in acquisitions, while debt rose to $1.35B. The company raised revenue guidance but cut adjusted EBITDA expectations. Two key landfill expansion projects face legal and regulatory setbacks, threatening future growth.

check_boxKey Events · Earnings and Guidance · CWST

• Q2 Revenue Up 17%, Net Income Down

  Revenue reached $543.7M, a 16.9% increase year-over-year, driven by acquisitions and pricing. Net income fell to $3.8M from $5.2M in Q2 2025, as higher interest expense and operating costs offset revenue gains.

• Cash Burn from Acquisitions

  Cash and cash equivalents dropped to $25.5M from $123.8M at year-end 2025, primarily due to $400.8M spent on four acquisitions. Total debt increased to $1.35B, with $185M drawn on the revolving credit facility.

• Guidance Mixed: Revenue Raised, EBITDA Lowered

  Full-year revenue guidance was raised, but adjusted EBITDA guidance was lowered, reflecting cost pressures from inflation, higher interest expense, and integration costs.

• Granite State Landfill Permit Denial Upheld

  A New Hampshire court granted summary judgment in favor of the state environmental agency, denying the permit for a new landfill. Casella filed a motion to reconsider. A new state law (HB 707) adds further regulatory hurdles for landfill siting.

auto_awesomeAnalysis · CWST · Energy & Transportation

Casella Waste Systems delivered strong top-line growth of 16.9% in Q2, driven by acquisitions and pricing, but net income fell to $3.8M from $5.2M a year ago as higher interest expense and operating costs ate into margins. The balance sheet tells a more urgent story: cash plunged to $25.5M from $123.8M at year-end after spending $400.8M on acquisitions, while debt swelled to $1.35B. The company raised full-year revenue guidance but lowered adjusted EBITDA expectations, signaling that cost pressures are real. Two major landfill expansion projects face significant regulatory headwinds — a court just ruled against the Granite State Landfill permit, and a new state law adds another layer of review. The Juniper Ridge expansion is also tied up in litigation. These setbacks threaten future disposal capacity and could lead to an impairment of the $13.5M in capitalized project costs. The appointment of a new COO from Waste Connections adds operational bench strength, but the immediate focus is on whether the acquisition-fueled growth strategy can be sustained without further straining liquidity.