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Clean Harbors beat Q1 expectations and raised full-year guidance. First-quarter revenue rose 2% to $1.46 billion, adjusted EBITDA increased 6% to $248 million, and the company lifted its 2026 adjusted EBITDA outlook to $1.24 billion-$1.30 billion.
Environmental Services kept delivering strong margin expansion. The segment posted its 16th straight quarter of year-over-year margin improvement and 18th consecutive quarter of EBITDA growth, helped by project work, PFAS-related business, emergency response, and stronger technical and field services demand.
Safety-Kleen Sustainable Solutions benefited from higher base oil pricing. Although revenue declined, adjusted EBITDA rose 17% to $33 million as higher charge-for-oil pricing and improving base oil prices boosted profitability, prompting management to raise the segment’s full-year EBITDA target.
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Clean Harbors (NYSE:CLH) reported better-than-expected first-quarter 2026 results and raised its full-year outlook, citing stronger profitability across both of its operating segments, improved base oil pricing and continued momentum in environmental services.
The environmental and industrial services company said total first-quarter revenue rose 2% year over year to $1.46 billion. Adjusted EBITDA increased 6% to $248 million, while consolidated adjusted EBITDA margin expanded 60 basis points to 17%. Income from operations rose 7% to $119 million, and net income increased 8%, with earnings per share of $1.19.
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Eric Dugas, Clean Harbors’ executive vice president and chief financial officer, said quarterly results were ahead of expectations outlined in February, driven primarily by outperformance in the Safety-Kleen Sustainable Solutions segment and continued execution in Environmental Services.
“We’re off to a strong start in 2026, and our Q1 performance has led us to raise our full year expectations for both operating segments,” Dugas said.
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Co-Chief Executive Officer Eric Gerstenberg said the Environmental Services segment delivered its 16th consecutive quarter of year-over-year adjusted EBITDA margin improvement and its 18th straight quarter of EBITDA growth.
Revenue in the segment increased by more than $40 million, supported by project services, PFAS-related opportunities and emergency response work. Technical services revenue rose 5%, while Safety-Kleen Environmental Services revenue grew 7%, driven by pricing and higher volumes in core offerings.
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Incineration utilization, including the new Kimball incinerator, was 80%, compared with 81% a year earlier. The company said utilization reflected scheduled maintenance days and weather-related impacts in both periods. Landfill volumes rose 34%, helped by project work including PFAS-related cleanups.
Field services revenue grew 7% as the company responded to customer emergency events across the U.S., including one large-scale event that generated about $10 million in revenue. Clean Harbors opened 18 field service branches in 2025 and plans to open 10 more in 2026.
Gerstenberg said the company exited the quarter with momentum in Environmental Services, with March revenue approximately 10% higher than the same month a year earlier. He noted that growth rates in Safety-Kleen Environmental, technical services and field services were all north of mid-single digits, while industrial services remained more challenged and was expected to be roughly flat year over year.
Clean Harbors also highlighted its PFAS management framework, issued in early April, which Gerstenberg said provides an “end-to-end cost-effective solution” for PFAS in multiple forms and concentrations.
The company said customers, government agencies and community leaders have sought guidance on PFAS issues, including contaminated water, stockpiles of AFFF firefighting foam, emergency response events and site remediation. Gerstenberg said Clean Harbors’ recommendations are based on institutional knowledge, scientific data and a PFAS incineration study completed with the EPA and the Pentagon.
Gerstenberg said both the Department of Defense in March and the U.S. EPA in April issued PFAS guidance that included incineration, landfill and water filtration as recommended treatment and disposal methods. He said the endorsements added momentum to the company’s PFAS sales pipeline.
During the question-and-answer portion of the call, Gerstenberg said Clean Harbors generated more than $120 million in PFAS-related revenue in 2025 and had previously discussed a pipeline growing about 20%. Entering 2026, he said the company is seeing growth more in the 25% to 35% range, with improvement in soil remediation, AFFF changeouts and industrial and municipal water treatment.
Co-Chief Executive Officer Michael Battles said Safety-Kleen Sustainable Solutions revenue declined year over year as expected, reflecting lower market pricing for base oil and blended products compared with the prior year. That decline was partly offset by higher charge-for-oil revenue and rising base oil prices late in the quarter.
Adjusted EBITDA in the segment rose 17% to $33 million, and margin improved 320 basis points. Battles said Clean Harbors increased its charge-for-oil pricing sequentially from the fourth quarter and more than doubled its rate from the first quarter of 2025. The company collected 53 million gallons of waste oil during the quarter.
Battles said Clean Harbors worked over the past year to shift the industry from a pay-for-oil model to a charge-for-oil model and is “not that interested in giving it back,” while acknowledging the company must remain selective to keep gallons flowing into its re-refineries.
Dugas said higher base oil prices contributed to the first-quarter beat and the increase to guidance. He said the company assumes the benefit from better base oil pricing will be spread mainly across the second and third quarters, with pricing potentially returning closer to normal by year-end.
Clean Harbors raised its full-year 2026 adjusted EBITDA guidance to a range of $1.24 billion to $1.30 billion, with a midpoint of $1.27 billion. That represents a $40 million increase from prior guidance and implies adjusted EBITDA growth of about 9% versus 2025 at the midpoint.
The company now expects Environmental Services adjusted EBITDA to grow 5% to 8% for the year. Dugas said the facilities network is positioned to process record volumes, supported by reshoring activity, project work and expanded PFAS-related work.
For Safety-Kleen Sustainable Solutions, Clean Harbors now expects approximately $165 million of adjusted EBITDA in 2026, up about 20% from 2025 and above the $135 million forecast provided in February. Dugas said the updated assumption reflects higher base oil prices, while noting uncertainty around the duration of overseas conflict and its impact on petroleum-derived products.
Clean Harbors also raised its adjusted free cash flow outlook to a range of $490 million to $550 million, with a midpoint of $520 million, up $10 million from prior guidance. Net capital expenditures, excluding expected spending on the SDA unit and fleet investment, are now projected at $350 million to $410 million.
The company ended the quarter with cash and short-term marketable securities of approximately $670 million and a net debt-to-EBITDA ratio of about 2x. Clean Harbors repurchased approximately 87,000 shares during the quarter for $25 million, at an average price of about $287 per share, and had about $575 million remaining under its authorization at quarter-end.
Battles said the company closed the DCI acquisition at the end of the quarter and is reviewing additional acquisition candidates, primarily in Environmental Services. He described the current pipeline as including smaller tuck-in transactions involving permitted facilities or collection networks.
Clean Harbors also discussed its use of artificial intelligence, including waste classifications, invoice audit, billing automation, document processing and field support tools. Battles said the company is also evaluating routing, scheduling and supply chain logistics opportunities, adding that AI is expected to continue delivering financial returns over time.
Gerstenberg opened the call by highlighting safety performance, saying the company achieved the lowest quarterly total recordable incident rate in its history at 0.39. He also recognized General Counsel Michael McDonald, who is retiring next month after more than 25 years with Clean Harbors.
Clean Harbors, Inc is a leading provider of environmental, energy and industrial services in North America. The company specializes in the collection, transportation and disposal of hazardous and non-hazardous wastes, emergency spill response and remediation, industrial cleaning and on-site field services. Its comprehensive service offering also includes chemical neutralization, drum crushing, high-pressure water blasting, tank cleaning and vacuum services designed to help customers meet stringent environmental regulations.
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The article "Clean Harbors Q1 Earnings Call Highlights" was originally published by MarketBeat.
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