# Republic Services, Inc. (RSG) — Narrative, Q3 2026

## Business

*From the FY2025 Form 10-K (fiscal year ended December 31, 2025), accession 0001060391-26-000094.*

Republic Services collects, processes, recycles and disposes of waste for residential, commercial, municipal and industrial customers across the United States and Canada, and it is one of the largest environmental services companies in North America by revenue. Most of its money comes from collection: in 2025 collection produced $11,233 million of $16,591 million total revenue (67.7%), split among small-container commercial service ($5,055 million), large-container service ($3,098 million), residential service ($3,010 million) and other collection ($70 million). Landfill tipping fees charged to third parties ($1,920 million net of intercompany, 11.6%), environmental solutions ($1,766 million net, 10.6%), transfer station fees ($848 million net, 5.1%), recycling processing and commodity sales ($433 million, 2.6%) and other non-core revenue ($391 million, 2.4%, mostly National Accounts work subcontracted to local operators) make up the rest.

The business is built on owning the whole chain, from the truck to the landfill. At year-end 2025 the company ran 377 collection operations, 255 transfer stations, 79 recycling centers, 207 active landfills, 24 treatment, storage and disposal facilities (TSDFs), 2 treatment, recovery and disposal facilities, 15 deep injection wells, 5 salt water disposal wells, 9 industrial wastewater treatment facilities and 2 Polymer Centers. It also had post-closure responsibility for 124 closed landfills. In 2025 about 67% of the solid waste it collected went to landfills it owns or operates (internalization), and the 10-K says fully integrated markets generally have lower operating costs and better cash flows. The active landfills held an estimated 5.0 billion in-place cubic yards of total available disposal capacity on 41,158 permitted acres, and the average estimated remaining life across all landfills was 56 years.

Contracts give the revenue base its durability. Residential collection is usually done under municipal contracts won by competitive bid, typically one to five years long and often exclusive, and some franchises run much longer. Small- and large-container commercial service usually runs under one- to three-year agreements. Many municipal contracts have annual price escalators tied to an index such as the consumer price index. Price is the main growth lever: in 2025 core price added 5.9% to total revenue and average yield added 4.1%.

Management runs the company through three reportable segments. Each segment's profit is measured by adjusted EBITDA, which is the single measure the chief operating decision maker (CEO Jon Vander Ark) uses. The 2025 figures were:

- **Group 1:** recycling and waste in the western United States. Net revenue $7,509 million; adjusted EBITDA $2,522 million.
- **Group 2:** recycling and waste in the southeastern and mid-western U.S., the eastern seaboard and Canada. Net revenue $7,316 million; adjusted EBITDA $2,413 million.
- **Group 3 (Environmental Solutions):** hazardous and non-hazardous industrial waste treatment and disposal, field and industrial services, emergency response, equipment rental and in-plant services across the U.S. and Canada, including 68 U.S.-flag vessels subject to the Jones Act. Net revenue $1,766 million; adjusted EBITDA $372 million.

Total adjusted EBITDA was $5,307 million in 2025.

**Recycling, circularity and renewable energy.** The company processed and sold 2.2 million tons of recyclables in 2025, excluding glass and organics, and about 83% of recycling-center volume is fiber. Management estimates that a $10 per ton change in commodity prices moves annual revenue and operating income by about $13 million each. Its Polymer Centers sort and process rigid plastics (PET, HDPE, PP) into recycled content for consumer packaging, and each is expected to produce more than 100 million pounds a year. Las Vegas opened in 2024, Indianapolis opened in 2025, and Allentown, Pennsylvania is planned to start in 2027. Blue Polymers, a joint venture with Ravago, turns the HDPE and PP output into custom resins; its first facility, in Indianapolis, began operating in 2025. The company was engaged in 84 landfill gas-to-energy and other renewable energy projects, and more than 30 landfill gas projects were in development. Most of these projects are owned by third parties that pay Republic royalties for the gas.

**Operating model and capital allocation.** About 79% of residential routes run on automated single-driver trucks. At year-end 2025 the company operated more than 180 electric collection vehicles, and it had about 42,000 full-time employees. Its stated capital allocation is to fund value-creating acquisitions, mostly privately held recycling, waste and environmental solutions businesses in existing markets, and to return free cash flow through dividends and buybacks while keeping its investment-grade ratings (A- from S&P, A- from Fitch, A3 from Moody's). The 2025 dividend increase was the 22nd consecutive annual increase. Competitors are a few large national public companies, regional operators, thousands of small private haulers, and municipalities, which have tax revenue and tax-exempt financing behind them.

## Risk factors

*From the FY2025 Form 10-K, Item 1A, accession 0001060391-26-000094. The Q3 2026 Form 10-Q (accession 0001060391-26-000327) reports no material changes to these risk factors.*

The risks below are the ones the company describes with specifics. They are grouped by theme.

**Operating costs and pricing**
- **Fuel and petrochemicals.** Fuel cost $466 million in 2025 (2.8% of revenue). The 10-K estimates that a twenty-cent per gallon move in diesel changes fuel cost by about $26 million a year and fuel recovery fees by about $42 million. The fees are not charged to every customer and may not fully offset cost increases. The Q3 2026 10-Q updates these estimates to about $31 million of combined fuel expense and transportation surcharges, and about $37 million of fuel recovery fees. The company also runs a CNG fleet and fueling stations whose economics depend on CNG prices, regulation and tax incentives. Landfill liners and other products track petrochemical prices.
- **Price versus cost.** Many contracts reprice on CPI-type indices, so costs can rise faster than allowed price increases, and price increases can lose volume to lower-cost competitors.
- **Labor.** About 22% of the workforce was covered by collective bargaining agreements at year-end 2025. The company had strikes in 2025: the labor disruptions cost $56 million, made up of $16 million of customer credits and $40 million of operating costs. More union organizing could raise costs further.
- **Multiemployer pensions.** Some plans the company contributes to are critical or endangered under the Pension Protection Act. A withdrawal, which the company says it considers from time to time, or a mass withdrawal would trigger payments for its share of unfunded vested liabilities.

**Commodity, weather and capital**
- **Recycled commodity prices.** Prices are volatile, and the company currently has no commodity hedges. The 10-K warns that Extended Producer Responsibility laws, which are meant to shift recycling costs to producers and raise supply, could push commodity prices lower.
- **Weather and climate.** Hurricanes, wildfires, floods and heat can increase volume handled without extra pay, disrupt operations, impair assets and delay landfill development. Storm-cleanup volume can also help results temporarily, as it did in 2025.
- **Capital intensity.** Capital spending, capping, closure, post-closure and remediation needs rise with acquisitions and regulation and may exceed cash flow. Goodwill is large ($16,715 million at year-end 2025) and is tested for impairment every year.

**Landfills and permits**
- **Permits.** New landfills, transfer stations and expansions face long, contested permitting. Failure to obtain or keep permits could force the company to haul waste to competitors' sites or over long distances.
- **Closure and remediation estimates.** Year-end 2025 obligations were about $2.3 billion for final capping, closure and post-closure and $443 million for environmental remediation. Higher actual costs, or an earlier-than-expected landfill closure, would force accruals to be raised or accelerated.
- **Diversion away from landfills.** State and municipal waste-reduction mandates, organic-diversion and minimum-recycled-content rules, and corporate zero-waste goals reduce landfill volume and pricing power. Some municipal contracts carry diversion targets with liquidated damages if missed.

**Regulation, environment and litigation**
- **Environmental and flow-control regulation.** Rules on PFAS and other emerging contaminants could raise closure and remediation spending; the EPA listed two PFAS as CERCLA hazardous substances in 2024. Laws that restrict cross-border waste movement or direct waste flows can lower landfill volume.
- **Greenhouse-gas regulation.** Landfill methane rules and vehicle emission and fuel-economy standards could raise costs. Canada finalized Landfill Methane Regulations in December 2025 that target a 42% cut in waste-sector methane below 2019 levels by 2030, and its output-based carbon pricing system remains in place.
- **CERCLA and unknown contamination.** The company is a potentially responsible party at many sites under strict, joint and several liability. Liabilities could exceed reserves, including liabilities that came with acquired businesses.
- **Litigation and insurance.** Permit, nuisance and environmental suits could lead to fines or the loss of a permit. Insurance carries high deductibles, may not cover a major loss, and has become more costly.
- **Renewable fuel policy.** The economics of the gas-to-energy projects depend on the federal Renewable Fuel Standard and on RIN prices, which follow EPA decisions.

**Financial strategy**
- **Debt and ratings.** The company had about $14 billion of debt and finance leases at year-end 2025, with covenants limiting total debt to EBITDA. Losing investment-grade ratings would raise interest costs and limit financing.
- **Customer credit.** A weak economy can reduce municipal tax receipts and hurt national-account and industrial customers' ability to pay.
- **Accounting estimates.** Landfill depletion, closure accruals, remediation, insurance and acquisition fair values all depend on judgment and could prove inadequate.

**Growth, technology and the economy**
- **Acquisitions.** The strategy depends on finding, buying and integrating acquisitions. Due diligence may miss undisclosed environmental or contractual liabilities, and indemnities or insurance may fall short.
- **Technology, AI and cyber.** The company increasingly depends on digital platforms, including the RISE dispatch system, e-commerce and AI tools that can produce inaccurate outputs. It has periodically experienced cyber incidents, and a significant breach could disrupt operations and expose customer and employee data.
- **Economy and people.** Volume falls in weak economies, especially construction-related large-container work, and the industry's recoveries have historically lagged the broader economy. Losing key executives, or failing to hire qualified labor, could hurt results.

## Management's discussion: fiscal 2025

*From the FY2025 Form 10-K, Item 7, accession 0001060391-26-000094, with full-year adjusted free cash flow from the Q4 2025 earnings release (Form 8-K, accession 0001060391-26-000093).*

Revenue grew 3.5% in 2025 to $16,591 million, up from $16,032 million. The growth came almost entirely from price and acquisitions while organic volume shrank. Average yield added 4.1% and acquisitions net of divestitures added 1.3%. Environmental solutions took away 1.0%, volume 0.6%, fuel recovery fees 0.1% and fewer workdays 0.1%. On related-business revenue, core price was 7.1% and volume was (0.7)%. Collection volume fell because construction-related large-container activity slowed, January–February weather was poor, and certain municipal contracts and broker-related business were lost. Hurricane Helene recovery and Los Angeles-area wildfire remediation partly offset the decline: they sent construction-and-demolition and special waste to the landfills and added about $100 million of revenue. Recycling revenue was flat because higher Polymer Center volume offset lower commodity prices (an average of $135 per ton versus $164). Environmental solutions revenue fell 1.0% on weaker manufacturing and emergency-response activity; the 2024 comparison included about $50 million from a non-recurring emergency-response project.

Operating income rose to $3,302 million from $3,196 million, and the operating margin held at 19.9%. Cost of operations was 58.0% of revenue versus 58.3%, and fuel costs fell as diesel averaged $3.66 a gallon versus $3.76. Depreciation and landfill depletion rose with investment in trucks, acquisitions and the event-driven landfill volumes. Net income attributable to the company was $2,139 million, or $6.85 per diluted share, up from $2,043 million ($6.49). Excluding restructuring ($20 million), the labor disruption ($56 million) and smaller items, adjusted diluted EPS was $7.02, up from $6.46. The effective tax rate rose to 17.5% from 16.0%. Tax credits from non-controlling investments in renewable energy partnerships lowered the tax line, while the related equity-method losses run through pre-tax income.

By segment, Group 1 adjusted EBITDA rose to $2.5 billion from $2.3 billion; its net revenue grew 6.6%, helped by wildfire-related special waste. Group 2 rose to $2.4 billion from $2.3 billion on revenue growth of 2.4%, helped by Hurricane Helene construction-and-demolition volume. Group 3 fell to $372 million from $433 million because of lower manufacturing and emergency-response activity, partly offset by acquisitions. The largest 2025 acquisition was COP Shamrock Parent, Inc. (Shamrock), bought in February 2025. Shamrock is an industrial waste and wastewater treatment provider in the northeastern and southeastern U.S. that the company described as a platform for growing environmental solutions. Cash used for acquisitions and investments was $1.4 billion, compared with $753 million in 2024.

On cash flow and the balance sheet, capital expenditures were $1.9 billion. Adjusted free cash flow was $2.43 billion, up 11.5%. The company repurchased 3.8 million shares for $864 million and paid $738 million of dividends. It issued $1.2 billion of senior notes in March 2025: $500 million of 4.750% notes due 2030 and $700 million of 5.150% notes due 2035. Year-end debt principal was $13.7 billion, with $596 million due in 2026 and $2.6 billion at floating rates; a 100 basis point rate move changes annual interest by about $26 million. Total debt to EBITDA under the credit facility was about 2.6x against a 3.75x maximum, and $1.8 billion was available under the $3.5 billion revolver. At year-end, $1.7 billion remained under the $3 billion buyback authorization that runs through 2026.

The original 2026 guidance, published with the 10-K, called for:

- revenue of $17.050–$17.150 billion;
- average yield of 3.2%–3.7% on total revenue and volume of about (1.0)%;
- adjusted diluted EPS of $7.20–$7.28;
- adjusted EBITDA of $5.475–$5.525 billion and adjusted free cash flow of $2.520–$2.560 billion (from the Q4 2025 release);
- about $1 billion of acquisitions and about $25 million of restructuring charges.

The restructuring charges relate to a new accounts receivable system and ERP conversions in environmental solutions.

## Current quarter: Q3 2026 (three months ended September 30, 2026)

*From the Q3 2026 Form 10-Q, accession 0001060391-26-000327, and the Q3 2026 earnings release furnished on Form 8-K, accession 0001060391-26-000326. Earlier 2026 guidance comes from the Q2 2026 release (accession 0001060391-26-000273) and the Q4 2025 release (accession 0001060391-26-000093).*

Revenue grew 8.2% to $4,559 million from $4,212 million, the fastest rate of the year; growth was 2.6% in Q1 and 4.6% in Q2. Compared with the prior-year quarter's 3.3% growth, average yield contributed less (2.9% versus 4.0%), while fuel recovery fees (1.8% versus nil) and environmental solutions (2.1% versus (1.4)%) swung positive. Core price on total revenue was 5.3% (5.9% a year earlier). On related-business revenue, core price was 6.3%: 7.6% in the open market and 4.1% in the restricted portion of the business. Fuel recovery fees added 1.8% as diesel averaged $5.56 a gallon versus $3.76. Environmental solutions added 2.1% on higher emergency-response activity, and acquisitions added 1.3%. Volume took away 0.6%, mainly from municipal residential contract losses. Landfill construction-and-demolition volume fell 38.2% against the prior year's Hurricane Helene cleanup, partly offset by special waste volume, which rose 6.4%. Environmental solutions net revenue rose to $529 million from $433 million. Landfill net revenue was flat at $516 million.

Operating income rose to $921 million (20.2% of revenue) from $836 million (19.9%). Net income attributable to the company was $592 million, or $1.93 per diluted share, up 9.7% from $1.76. Adjusted EPS was $1.94, up 2.1% from $1.90. The gap exists because the prior-year quarter's GAAP result absorbed the $56 million labor-disruption charge ($0.13 per share), which is excluded from adjusted EPS. The effective tax rate was 17.6%, compared with 14.7%. It included $41 million of net benefits from renewable energy investments and $11 million from renewable natural gas and electric-vehicle infrastructure investments, offset in pre-tax income by a $48 million loss from equity-method investments.

Adjusted EBITDA rose to $1,449 million, but the margin narrowed to 31.8% from 32.8%. Fuel cost rose to $180 million (4.0% of revenue) from $120 million (2.8%), and transportation and subcontract costs rose to 8.0% of revenue from 7.2%. The two businesses moved in opposite directions:

- **Recycling and waste (Groups 1 and 2):** adjusted EBITDA of $1,315 million at a 32.6% margin, compared with $1,292 million at 34.2%. Group 1 rose to $721 million from $659 million on a 9.5% revenue gain. Group 2 fell to $594 million from $633 million; the filing cites higher fuel, subcontract, and transfer and disposal costs, alongside lower collection volume and the absence of the prior year's hurricane volume.
- **Environmental Solutions (Group 3):** adjusted EBITDA of $134 million at a 25.4% margin, compared with $91 million at 21.0%. Management cites the rise in emergency-response activity, and the CEO called out "improved performance in Environmental Solutions."

**Nine-month cash flow and capital deployment.** Operating cash flow was $3,519 million, up from $3,315 million, and adjusted free cash flow was $2,276 million, up from $2,191 million. Capital expenditures were $1,363 million. Cash paid for acquisitions and investments was $1,117 million, against an aggregate purchase price of $1,116 million for businesses acquired, which included $617 million of goodwill. The named deals were vertically integrated recycling and waste businesses in Kansas (the Hamm businesses, February) and Utah (Robinson Waste Holdings Group, May), plus a hazardous-waste thermal treatment business on one of the company's Texas landfills (TD*X Associates, July). No individual price was disclosed, and the 10-Q says the acquisitions are not material individually or in aggregate. Management now expects to invest at least $1.2 billion in acquisitions in 2026, up from about $1 billion at the start of the year. Over the nine months, shareholders received $1.43 billion: 4.0 million shares repurchased for $848 million (excluding excise tax) and $577 million of dividends. In July the quarterly dividend was raised 4.5 cents, about 7%, to $0.670.

**Financing.** In June 2026 the company issued $700 million of 4.750% senior notes due 2031 and $500 million of 5.000% senior notes due 2036. It used the proceeds to pay down credit-facility and commercial paper borrowings. The $500 million of 2.900% notes due July 2026 are no longer outstanding. In August 2026 the commercial paper program cap was raised to $2.0 billion from $1.5 billion. Debt principal was $14,190 million at September 30, 2026, with only $48 million due within 12 months. Debt to EBITDA was about 2.6x against the 3.75x covenant, and $2.1 billion was available under the revolver. Days sales outstanding rose to 42.4 from 41.0 a year earlier.

**Guidance, raised again.** The October update raised revenue, adjusted EBITDA and adjusted free cash flow for the second time this year:

| 2026 guidance | February 2026 | August 2026 | October 2026 |
|---|---|---|---|
| Revenue | $17.050–$17.150 billion | $17.200–$17.300 billion | $17.425–$17.475 billion |
| Adjusted EBITDA | $5.475–$5.525 billion | $5.525–$5.550 billion | $5.550–$5.575 billion |
| Adjusted diluted EPS | $7.20–$7.28 | $7.23–$7.28 | not restated |
| Adjusted free cash flow | $2.520–$2.560 billion | $2.540–$2.575 billion | $2.565–$2.585 billion |

The October release also gave expected full-year net income attributable to the company of $2,210–$2,220 million, operating cash flow of $4,510–$4,570 million and property and equipment received of $1,970–$2,010 million.

## Subsequent events

*From the Q3 2026 Form 10-Q (accession 0001060391-26-000327) and the Form 8-K dated October 28, 2026 (accession 0001060391-26-000326).*

The quarterly report has no separate subsequent-events note. It discloses no acquisition, divestiture, borrowing or debt issuance completed after September 30, 2026, and no litigation outcome. The post-quarter events it and the October earnings filing disclose are:

- **New $5 billion buyback.** On October 28, 2026 the Board approved a $5 billion share repurchase authorization effective January 1, 2027 through December 31, 2029. About $0.8 billion remained under the current $3 billion program at September 30, 2026; that program runs through December 31, 2026.
- **Dividend.** On October 28, 2026 the Board declared a quarterly dividend of $0.670 per share, payable January 15, 2027 to holders of record on January 4, 2027. The previously declared $205 million dividend for holders of record on October 2, 2026 was paid on October 15, 2026.
- **Share count.** 304,639,653 common shares were outstanding as of October 22, 2026, excluding 9,365,675 treasury shares.