Republic Services recorded revenue growth of 6.5 percent in the third quarter of 2024

Phoenix-based Republic Services posted strong third-quarter 2024 results, reflecting positive earnings trends in the waste services sector.

Rising raw material prices and solid core prices contributed to sales growth of 6.5 percent. Revenue reached $4.076 billion, up from $3.825 billion in the third quarter last year.

“Looking forward to 2024, we expect to be nearing the low end of our full-year revenue guidance due to continued weakness in cyclical volumes,” Jon Vander Ark, president and CEO of Republic Services, told investors.

Vander Ark added that the company's strengths in identifying new opportunities, digital innovation and sustainability position it to perform well and create long-term value throughout the remainder of 2024. He also praised the company's 94 percent retention rate.

The average return on total sales was 4.6 percent. Despite cost inflation, Republic increased EBITDA margin by 210 basis points in the third quarter of 2024.

The company's implementation of digital tools and technologies contributed to growth, particularly through the integration of MPower, a fleet and equipment management system to increase the productivity of maintenance technicians. The deployment is expected to be completed by year-end, with annual cost savings expected to be $20 million.

Vander Ark also pointed to new technologies for waste and recycling collection routes to reduce contamination and said they contributed to more than $60 million in additional revenue in the first year of operation.

Vander Ark spoke about Republic's sustainability investments and provided information about the company's various initiatives.

“The development of our Blue Polymers polymer centers and joint venture facilities continues to progress,” he said. “Production volume at the Las Vegas Polymer Center continued to increase during the quarter. Construction of our Indianapolis Polymer Center is progressing and initial equipment commissioning is underway. This operation will be co-located with a Blue Polymers production facility. We expect construction of this facility to progress and be completed by this year, with earnings contribution in the second half of 2025.”

Republic Services has broken ground on a manufacturing facility in Buckeye, Arizona to support operations at its Las Vegas Polymer Center. Completion is expected for the end of 2025.

Renewable natural gas (RNG) projects made progress in the third quarter. Operation of a total of four projects has begun, two of which will go online in the third quarter. According to Vander Ark, four more RNG projects are expected to be completed by the end of 2024.

Electrification of the fleet

“We currently have 28 electric collection vehicles in use and expect to have more than 50 electric vehicles in our fleet by the end of the year,” Vander Ark told investors. “We have 18 facilities with commercial electric vehicle charging infrastructure.”

Vander Ark concluded with an update on Republic's $104 million in strategic acquisitions, with an additional $200 million in transactions expected to close by the end of 2024.

“As we look to 2025, we expect continued growth across the business, supported by pricing above underlying costs, cross-selling our entire product and service offering, and leveraging value-added acquisition opportunities,” he said. “We also expect a financial contribution from investments in sustainability innovations, including plastics cycle and renewable natural gas projects. We believe the fundamentals of our business remain strong and support further growth in revenue, EBITDA and free cash flow, as well as margin expansion in the underlying business.”

Third Quarter 2024 Highlights:

Revenue: $4.076 billion
Operating result: $845.9 million
Adjusted EBITDA: $1.3 billion
Net income: $565.7 million
Free cash flow: $1.4 billion