Republic Services (NYSE:RSG) raised its full-year 2026 outlook after reporting second-quarter revenue growth of 4.6% and adjusted EBITDA growth of 4.5%, supported by pricing, acquisitions and recycling-related contributions. The company said adjusted EBITDA margin held at 32.1%, while adjusted earnings per share totaled $1.85.
Chief Executive Officer Jon Vander Ark said the company generated $1.58 billion in adjusted free cash flow during the first half of the year and continued to invest in technology, automation, sustainability initiatives and acquisitions. Republic also returned more than $1 billion to shareholders during the first half through dividends and share repurchases, buying back about 1% of its outstanding shares.
Pricing Offset Volume Pressure
Open-market pricing rose 7.8%, while restricted pricing increased 4.1%. By business category, core price on related revenue included increases of 8.1% in small container, 6.9% in large container and 6.3% in residential.
Volume declined 1.6% on total revenue and 1.9% on related revenue. Management said much of the decline reflected difficult comparisons with prior-year event-driven landfill volumes, which accounted for 1.3 percentage points of the total-revenue volume decline. Excluding the prior-year event impact, volume performance improved by 50 basis points from the first quarter.
Landfill municipal solid waste volume increased 1.1%, but this was more than offset by a 2.2% decline in large-container volumes, which Republic attributed primarily to continued softness in construction-related activity. Residential volume fell 4.3% because of known contract losses. The company said residential declines should narrow in 2027, although it would continue to prioritize pricing and returns over retaining lower-value business.
Vander Ark said the broader recycling and waste market has experienced nearly four years of negative growth tied to construction and industrial activity, but he sees sequential improvement. Commercial construction has shown a slight rebound, residential construction remains challenged, and industrial activity has begun to gain momentum, he said.
Margins, Recycling and Environmental Solutions
Republic’s 32.1% adjusted EBITDA margin included 90 basis points of expansion in the underlying business. That improvement was offset by a 50-basis-point impact from prior-year landfill event volumes, a 30-basis-point impact from net fuel and a 10-basis-point impact from lower recycled commodity prices.
Recycling commodity prices averaged $136 per ton in the second quarter, down from $149 per ton a year earlier. Recycling processing and commodity sales nevertheless increased by $8 million as higher volumes at Republic’s Polymer Centers offset lower commodity prices. Current commodity prices are about $140 per ton, and the company used that level in its second-half outlook, implying a full-year average of roughly $135 per ton.
The environmental solutions business posted a sequential revenue increase of $53 million, driven by higher event volumes and seasonal activity. Its adjusted EBITDA margin improved 100 basis points sequentially to 20.2%. Republic expects year-over-year revenue growth and margin expansion in environmental solutions during the second half.
Management said the environmental solutions pipeline is broad-based across end markets and geographies, with manufacturing-related activity representing roughly half of the business. Vander Ark said the company is particularly competitive on complex projects that can use its field services, hazardous-waste landfills, solid-waste landfills, water remediation capabilities and hazardous-liquid services.
Republic also said its PFAS-related business exceeded $100 million in revenue in 2025 and is on pace to exceed that amount again this year. Vander Ark said PFAS demand is being supported across the company’s hazardous landfill, water-treatment and solid-waste landfill assets.
Guidance Raised on Commodities and Acquisitions
Republic raised its 2026 guidance to:
- Revenue of $17.2 billion to $17.3 billion.
- Adjusted EBITDA of $5.525 billion to $5.55 billion.
- Adjusted earnings per share of $7.23 to $7.28.
- Adjusted free cash flow of $2.54 billion to $2.575 billion.
DelGhiaccio said the approximately $40 million increase at the midpoint of adjusted EBITDA guidance was driven primarily by higher recycling commodity prices, contributing about $25 million, with the remainder coming from incremental acquisitions. The revenue outlook also includes higher fuel recovery fees through July, though the company said those fees are largely offset by fuel costs, transportation surcharges and other indirect fuel-related expenses.
Republic expects third-quarter margins to be relatively flat compared with the prior year, followed by expansion in the fourth quarter. The company continues to target 60 to 70 basis points of margin expansion in its underlying business for the full year.
Technology, Sustainability and Capital Allocation
Republic is deploying artificial intelligence tools in pricing, routing and call-center operations. Vander Ark said the company’s pricing technology incorporates dozens of customer-specific variables to optimize pricing while considering customer retention. The company expects AI-enabled pricing and routing investments to support about $100 million of opportunity over time, with progress expected toward that target by the end of 2027.
In sustainability initiatives, Republic began operations at two renewable natural gas projects during the second quarter and expects two more to start by year-end. Construction of a third Polymer Center in Allentown, Pennsylvania, is progressing, with commissioning scheduled to begin early next year.
The company operated more than 250 electric collection vehicles at the end of the second quarter and expects to exit 2026 with more than 300 electric trucks. Vander Ark said vehicle battery performance and uptime have exceeded the company’s expectations.
Republic invested $860 million in acquisitions during the first half and said it has since closed nearly $1.2 billion in acquisition investments, all of which is included in its updated guidance. The company expects its acquisition pipeline to support continued activity in recycling, waste and environmental solutions into 2027.
About Republic Services (NYSE:RSG)
Republic Services, Inc is a leading provider of non-hazardous solid waste and recycling services in the United States. The company offers a broad range of waste management solutions to residential, commercial, industrial and municipal customers, positioning itself as a full-service partner for everyday waste collection as well as specialized disposal needs.
Republic’s core operations include curbside and commercial collection, transfer and hauling, materials recovery and recycling facilities, and landfill disposal.
