tapebrief
RSG · Q3 2025

RSG · Q4 2025 Earnings

Cautious

Republic Services

Reported February 17, 2026

30-second summary

Republic delivered a Q4 with revenue $4.136B (+2.2% YoY) and adjusted EPS $1.76 (+11.4% YoY), then issued FY2026 guidance that confirms the deceleration the prior two quarters pre-conditioned: revenue +2.8–3.4%, adjusted EPS +2.6–3.7%, with management leaning on an "ex-non-recurring" reframe to claim underlying growth would have been ~4% revenue and ~6% EPS. Volume is now guided to remain negative (-1.0%) for a fifth consecutive year, yield steps down to a 3.2–3.7% range from Q4's 3.7% print, and FCF growth of ~4% at the midpoint barely keeps pace with capex. Q4 itself was a clean print — the deceleration story is about the FY2026 algorithm, not the quarter.

Headline numbers

EPS

Q4 FY2025

$1.76

Revenue

Q4 FY2025

$4.14B

+2.2% YoY

Operating margin

Q4 FY2025

19.3%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$4.14B+2.2%$4.21B-1.8%
EPS$1.76—$1.90-7.4%
Operating margin19.3%—19.8%-46bps

Guidance

Republic provides FY2026 guidance showing mid-single digit revenue growth with modest EPS expansion; pricing power (3.2–3.7% yield) offset by continued 1.0% volume headwinds.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

New guidance

MetricPeriodGuideYoY
RevenueFY2026$17.050 billion to $17.150 billion+3.0% to +3.4% YoY
Adjusted Diluted EPSFY2026$7.20 to $7.28+1.7% to +2.6% YoY
Adjusted EBITDAFY2026$5.475 billion to $5.525 billion—
Adjusted Free Cash FlowFY2026$2.520 billion to $2.560 billion—
Average Yield on Total RevenueFY20263.2% to 3.7%—
Volume Decline on Total RevenueFY2026approximately 1.0%—
Average Yield on Related Business RevenueFY20264.0% to 4.5%—
Property and Equipment Capital ExpenditureFY2026$1.960 billion to $2.000 billion (net of proceeds)—
Acquisitions InvestmentFY2026approximately $1 billion—

Segment KPIs

Q4 FY2025
SegmentQ4 FY2025YoY
Collection$2.833B+3.8%
Transfer, net$0.214B+5.4%
Landfill, net$0.467B+5.4%
Environmental Solutions, net$0.422B-12.4%
Recycling & Waste$3.714B+2.9%

Other KPIs

Q4 FY2025
SegmentQ4 FY2025
Core Price on Total Revenue5.8%
Average Yield on Total Revenue3.7%
Volume Change on Total Revenue-1.0%
Adjusted EBITDA Margin31.3%
Operating Margin19.34%
Net Income Margin13.2%
Recycled Commodity Price per Ton$112
EPS Growth YoY8.0%

Management tone

Customer optimization hangover → Pricing carries the quarter → ES stabilizes but worsens in print → 2026 algorithm formally downshifted

Three quarters ago management was defending mid-single-digit revenue and faster EBITDA/FCF growth as the through-cycle algorithm. Two quarters ago they cut revenue and held the rest. One quarter ago they pre-flagged 2026 would land "down a click" and deferred the actual numbers to February. This quarter the numbers landed — and adjusted EPS growth of 2.6–3.7% is below the long-term algorithm. The defense is now explicitly normalization-driven: "absent difficult prior year comparisons created by these non-recurring projects, the midpoint of our 2026 guidance would indicate nearly a 4% top line growth, more than 5% growth in adjusted EBITDA, 50 basis points of EBITDA margin expansion, approximately 6% growth in adjusted earnings per share." Management is asking investors to look through the as-reported guide. The pivot from defending the algorithm to defending the ex-items algorithm is the central tone shift of this call.

Two quarters ago Environmental Solutions was -2.3% with share-loss language; one quarter ago -6.9% with "stabilized exiting Q3" framing; this quarter -12.4%. The trajectory has not stabilized — it has accelerated downward. In Q&A management characterized ES as "relatively flat full year 2026 with first half headwinds from Q4 emergency response lapping and second half growth," meaning the segment is guided to spend another full year below 2024 levels before returning to growth. The original framing of ES as a structural compounder is now four quarters into being unwound.

Volume language has migrated from "transient softness" to "approaching four years of negative demand in recycling and waste" — that language came from management in Q&A, and it reframes the entire setup. Republic is no longer modeling a cyclical recovery; it is modeling persistent volume decline as the operating reality. Residential volume is guided "negative each quarter and full year 2026" — that's deliberate shedding, not macro. The price-over-volume choice has been formalized.

Pricing held up — core price at 5.8% beat the Q3 brief's 5.7% threshold — but the forward yield guide (3.2–3.7% on total revenue vs. Q4 exit of 3.7%) signals management expects pricing to moderate as CPI rolls off and customer acceptance tightens. This is the first quarter Republic has explicitly guided to yield compression from the exit rate. Pricing has been the entire bull thesis through 2025; the 2026 guide implies that lever is approaching the top of its range.

Recycled commodity prices fell to $112/ton (-27% YoY) and management baselined FY2026 at $115/ton — a flat assumption with no recovery embedded. The Q3 brief flagged sub-$130 as a pressure level; we're now $15 below that with no near-term reversal assumed.

Recurring themes management leaned on this quarter:

Digital and AI-enabled optimization (pricing analytics, RISE platform, route optimization, customer call tools)Sustainability investments (Polymer Centers, RNG projects, EV fleet expansion)Pricing power and yield management amid volume pressureM&A pipeline and capital allocation disciplineUnderlying business resilience offsetting macro and commodity headwindsCustomer retention and engagement metrics as competitive moat

Risks management surfaced:

Organic volume decline concentrated in construction and manufacturing end marketsShedding of underperforming residential businessRecycled commodity price volatility (down 27% YoY to $112/ton)Net fuel headwinds impacting marginsUncertain macroeconomic backdrop affecting forward growth visibility

Q&A highlights

Tyler Brown · Raymond James

Detailed breakdown of $400M in YTD acquisitions (specifically HAMs purchase in Kansas City), $600M pipeline composition, whether the $600M is in guidance, and the 2026 acquisition contribution to growth.

HAMs was the anchor deal in the $400M (public company with disposal infrastructure on KC west side). The $600M pipeline is predominantly recycling and waste with some ES opportunities but details TBD until close. The $400M is in guidance contributing 70 basis points to 2026 growth; the $600M is not included in guidance.

$400M in closed acquisitions including HAMs$600M pipeline predominantly recycling/waste70 basis points contribution to 2026 growth from closed dealsAdditional closed deals beyond HAMs in the $400M

Tyler Brown · Raymond James

Detailed margin bridge for 2026 guidance including core business, commodities impact, landfill comps, M&A contribution, and quarterly timing of margin movement in first half vs Q4.

20 bps margin expansion midpoint: 60-70 bps underlying business expansion offset by 10 bps commodity drag, 10 bps M&A drag, and 30 bps landfill volume drag. Quarterly timing: slightly positive Q1-Q3, flat to slightly negative in Q2-Q3 due to landfill comps, most expansion in Q4.

20 basis points margin expansion at midpoint60-70 basis points underlying business expansion10 basis points commodity headwind from $115/ton assumption10 basis points M&A drag

Jerry Revich · Wells Fargo

Polymer center performance on Las Vegas and Indianapolis projects (on budget/learning curve), future expansion plans including potential fourth center, and 2026 financial expectations.

Las Vegas on track with favorable learning curve progression. Indianapolis benefiting from Vegas learnings. Allentown (third center) in air. Fourth center more likely than not over time but no near-term announcement. Spreads between baled input and PET output stable due to premium product quality. 2026 expects $30M revenue uplift and $10M incremental EBITDA from polymer centers.

Three operating polymer centers (Las Vegas, Indianapolis, Allentown)Stable spreads between input and output pricingFourth center likely long-term but not imminent$30 million incremental revenue from polymer centers in 2026

Noah K. · Oppenheimer and Company

Organic growth outlook conservatism relative to peers, volume vs yield expectations, residential shedding strategy, and environmental solutions contribution to 2026 growth.

Conservative outlook due to ~4 years of negative demand in recycling/waste despite stable macro and positive pricing environment. Manufacturing and construction remain weaker. Residential expected negative each quarter in 2026. ES expected relatively flat for full year with first half headwinds from Q4 emergency response lapping and second half growth. Company prioritizes price over volume when forced to choose.

Approximately 4 years of negative demand in recycling and wasteResidential expected negative each quarter and full year 2026Underlying volume decline of 40 basis points excluding landfill volumesES expected relatively flat full year 2026

Adam Bubis · Goldman Sachs

Parse organic growth in environmental solutions by business line (landfill, industrial services, EMP), and landfill gas incremental EBITDA progress toward $120M run-rate target.

All three ES components (landfill, industrial services, EMP) down year-over-year with concentration of decline in landfill and EMP volumes falling through at very high decremental margins. By end of 2026, company expects to reach ~$40M of the $120M incremental EBITDA target for landfill gas. Full run-rate revenue is $100M with $120M EBITDA due to equity pickup from joint ventures.

Landfill, industrial services, and EMP volumes all down YoY in ES$40 million of $120 million landfill gas EBITDA target achieved by end of 2026$100 million full run-rate revenue target for landfill gas$120 million full run-rate EBITDA target for landfill gas

Answers to last quarter's watch list

FY2026 initial guidance in February — Landed below the long-term algorithm. Revenue +2.8–3.4% (in line with "mid-single digit" loosely defined) but adjusted EPS +2.6–3.7% sits materially below the "faster EBITDA/FCF growth" framing. Management's ex-non-recurring reframe (+4% revenue / +6% EPS / +7% FCF) is the defense, but the as-reported guide signals pricing fatigue is starting to show in the EPS line. Status: Resolved negatively
Environmental Solutions Q4 revenue print — Came in at -12.4% YoY, materially worse than the Q3 brief's -6.9% floor expectation. Management's "stabilized exiting Q3" narrative did not hold. ES is now guided "relatively flat" for FY2026 with first-half headwinds from lapping a ~$50M prior-year Q4 emergency response project. Status: Resolved negatively
Core price sustainability — Held at 5.8% in Q4 vs. the 5.7% threshold, the cleanest positive on the print. However, the FY2026 yield guide (3.2–3.7% total revenue, 4.0–4.5% related business) implies management expects pricing to moderate from Q4 exit levels. Status: Resolved positively for Q4; flagged for moderation in 2026
Landfill ex-event volumes — Landfill net revenue +5.4% in Q4 (vs. Q3 +13.9%) as event comps begin to roll off, but underlying landfill volumes were notably mixed: MSW vol -2.2%, C&D vol -14.8%, Special waste vol +15.0%. Management Q&A disclosed FY2026 will absorb a 60bps headwind to organic volume from the 2025 wildfire/hurricane comp. Underlying landfill is exposed as weaker than the 2025 segment line suggested. Status: Resolved negatively
M&A spend disclosure — FY2026 acquisition investment guided to ~$1.0B, in line with the prior bar. Q&A clarified $400M of closed acquisitions (including HAMs in Kansas City) is already in 2026 guidance contributing 70bps to growth; an additional $600M pipeline is not in guidance, providing potential upside. Status: Resolved positively

What to watch into next quarter

Q1 yield print vs. FY2026 guide top end of 3.7%: Q4 exited at 3.7%, the top of the guided range. Watch whether Q1 lands inside the range (signaling the moderation management has guided) or holds at exit rate (signaling guide is conservative). Anything below 3.4% in Q1 would imply the low end of the FY range and pressure EPS to the low end of $7.20.

Environmental Solutions Q1 revenue: Management said Q1 carries a tail from the lapping non-recurring emergency response work, then transitions to growth in H2. Watch whether Q1 lands at -10% or better (consistent with "flat full year") or worse than -12% (extending the deterioration trend from -2.3% → -6.9% → -12.4%).

Core price retention: Q4 held 5.8%. The bull case requires core price ≥5.5% through 2026 to defend the ex-items EPS growth narrative. Anything below 5.0% would invalidate management's "pricing in excess of cost inflation" framing.

$600M M&A pipeline conversion: Not in 2026 guidance. Watch how much closes by Q2 and the implied contribution — if more than $300M closes by mid-year, the FY2026 EPS guide has meaningful upside that wasn't built in.

FY2026 EBITDA margin cadence: Management Q&A laid out specific guidance — slightly positive Q1, flat to slightly negative Q2-Q3, with expansion concentrated in Q4. Watch whether Q1 actually prints positive margin expansion; if Q1 lands flat or negative, the 50bps full-year expansion (ex-items) becomes a Q4-loaded bet.

Landfill gas EBITDA progression toward $120M target: Management disclosed ~$40M of the $120M run-rate target achieved by end of 2026 (from a $100M revenue / $120M EBITDA framework including JV equity pickup). Watch quarterly disclosure of project commissioning — four more energy projects guided for 2026 operations.

Sources

  1. Republic Services Q4 2025 Press Release, Exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1060391/000106039126000093/exhibit991q42025.htm
  2. Republic Services Q3 2025 brief (Tapebrief, prior coverage)
  3. Republic Services Q2 2025 brief (Tapebrief, prior coverage)

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