Republic Services (RSG) Q3 2024 earnings summary

Executive summary

• Revenue for the nine months ended September 30, 2024, increased 7.7% to $11,986.0 million, with Q3 revenue up 7% year-over-year and adjusted EBITDA up 14%, driven by higher yield, acquisitions, and improved recycling sales.

• Adjusted EPS reached $1.81 in Q3, with net income for the nine months at $1,531.0 million and diluted EPS at $4.86.

• Adjusted EBITDA for the nine months was $3,725.7 million, with Q3 margin expanding by 210 basis points to 32%.

• Customer retention rate remained above 94%, and employee turnover improved by over 100 basis points year-over-year.

• Continued investments in digital tools, sustainability, and fleet electrification, with 28 electric vehicles in operation and 18 facilities equipped with EV charging.

Financial highlights

• Core price on total revenue was 6.2%, with average yield at 4.6%; organic volume on total revenue declined 1.2%.

• Operating income for the nine months was $2,392.6 million, and cost of operations as a percentage of revenue decreased to 58.7%.

• Cash provided by operating activities was $2,914.0 million, with capital expenditures of $1,357.4 million and $504.8 million paid in dividends.

• Recycling commodity prices rose to $177/ton from $112/ton year-over-year, but recently declined to $160/ton.

• Adjusted EBITDA margin expanded 210 basis points to 32%.

Outlook and guidance

• Revenue is expected near the low end of full-year 2024 guidance, but adjusted EBITDA is expected at the high end.

• 2025 is expected to see continued growth in revenue, EBITDA, and free cash flow, with margin expansion supported by pricing, cross-selling, and acquisitions.

• Long-term outlook targets mid-single-digit revenue growth and faster growth in EBITDA, EPS, and free cash flow.

• 2025 incremental sustainability innovation expected to add $75 million in revenue and $30–$35 million in EBITDA, mainly from RNG projects.

• Management expects to invest at least $250 million in acquisitions in 2024, including a post-collection business.