10-Q: Clean Harbors Reports Strong Q2 2026 Financial Results

Clean Harbors, Inc. announced robust financial performance for the second quarter and first half of 2026, driven by significant revenue growth in its Environmental Services and Safety-Kleen Sustainability Solutions segments.

Summary

• Clean Harbors reported total revenues of $1.735 billion for Q2 2026, a 11.9% increase year-over-year, and $3.195 billion for the first half of 2026, up 7.1%.
• Net income for Q2 2026 was $170.5 million, a 34.3% increase from Q2 2025, and $233.7 million for the first half, a 25.9% increase.
• Adjusted EBITDA for Q2 2026 reached $409.0 million, up 21.6% year-over-year, and $656.9 million for the first half, up 15.0%.
• The Environmental Services segment saw a 7.7% revenue increase in Q2 2026, driven by Technical Services and Safety-Kleen core services.
• The Safety-Kleen Sustainability Solutions (SKSS) segment experienced a significant 40.8% revenue increase in Q2 2026, primarily due to higher pricing of oil-based products.
• The company completed two acquisitions in Q2 2026: Terra Nova Solutions for $225.8 million and certain environmental businesses of Depot Connect International for $131.8 million.
• A planned acquisition of ES&H for approximately $305 million is expected to close in the second half of 2026.
• Net cash from operating activities increased by $35.8 million to $245.5 million for the first half of 2026.
• Adjusted free cash flow improved significantly to $59.8 million for the first half of 2026, up from $17.4 million in the prior year period.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong positive report, with significant year-over-year growth in revenues, net income, and Adjusted EBITDA, alongside successful acquisitions and improved cash flow generation.

Positives

• Strong revenue growth across both Environmental Services (7.7% in Q2) and SKSS (40.8% in Q2) segments.
• Significant increase in net income for Q2 2026 ($170.5 million, up 34.3%) and first half 2026 ($233.7 million, up 25.9%).
• Substantial growth in Adjusted EBITDA for Q2 2026 ($409.0 million, up 21.6%) and first half 2026 ($656.9 million, up 15.0%).
• Improved Adjusted EBITDA margins for the company, up 1.9% in Q2 and 1.4% in the first half.
• Successful completion of two strategic acquisitions (Terra Nova Solutions and Depot Connect International) in Q2 2026.
• Significant improvement in Adjusted Free Cash Flow to $59.8 million for the first half of 2026.
• Increased cash from operating activities by $35.8 million for the first half of 2026.
• Strong utilization rates at incinerator facilities (91% in Q2 2026).

Negatives

• Decrease in Industrial Services revenues by $22.3 million in the first half of 2026 due to lower demand for industrial maintenance and turnaround services.
• Increase in SG&A expenses for the Environmental Services segment by 12.4% in Q2 and 14.2% in the first half, driven by labor and benefits costs.
• Increase in Corporate SG&A expenses by 5.9% in Q2 and 6.7% in the first half, primarily due to higher incentive compensation.
• The company has outstanding letters of credit totaling $139.2 million as of June 30, 2026, which could be called if obligations are not met.

Risks

• Operational and safety risks inherent in hazardous waste management.
• Risks associated with the failure of new or existing technologies, including artificial intelligence.
• Cybersecurity risks.
• Occurrence of natural disasters or other catastrophic events and their macroeconomic effects.
• Risks related to retaining and hiring key personnel.
• Environmental liability and product liability risks.
• Negative economic, industry, or market developments, including economic downturns.
• Risks associated with assumptions relating to landfill expansion.

Future Outlook

The company anticipates that future payments of interest will continue to be funded through cash flows from operations and any principal payments will either be funded through available cash from operations or through available financing alternatives. The company expects to spend approximately $85 million, $25 million and $10 million in 2026 for the SDA unit, fleet expansion project, and data center strategy investment, respectively. Unanticipated changes in environmental regulations could require significant capital expenditures and adversely affect results of operations and cash flow.

Management Comments

• Management believes disciplined management of operating costs is vital to remaining price competitive.
• Management aims to manage SG&A expenses in line with overall performance and revenue levels through efficient use of labor, enhanced technology, and process improvements.
• Management considers Adjusted EBITDA to be a measurement of performance that provides useful information to management and investors.
• Management believes its future operating cash flows will be sufficient to meet future operating and internal investing cash needs.
• Management believes its potential monetary liability could exceed $1.0 million at three of the 133 Superfund-related sites.

Industry Context

StockSavvy.ai notes that Clean Harbors' strong performance in Q2 2026, particularly the significant revenue growth in its Safety-Kleen Sustainability Solutions segment, reflects broader industry trends towards increased demand for recycled oil products and sustainable waste management solutions. The company's strategic acquisitions further position it to capitalize on these trends and expand its service offerings.

Comparison to Industry Standards

• Clean Harbors' Environmental Services segment achieved incinerator utilization rates of 91% in Q2 2026, compared to 86% in Q2 2025, indicating efficient asset utilization which is a key performance indicator in the waste management industry.
• The company's Safety-Kleen Sustainability Solutions segment saw a 40.8% revenue increase in Q2 2026, significantly outperforming general market growth for industrial services, driven by strategic pricing and product demand.
• The company's Adjusted EBITDA margin of 23.6% for Q2 2026 demonstrates strong operational efficiency and profitability compared to industry benchmarks, which can vary widely but typically range from 15-25% for diversified environmental service providers.

Legal Proceedings

• Safety-Kleen product liability cases involving approximately 86 proceedings related to personal injury claims from parts cleaning equipment or products.
• Superfund proceedings related to 133 sites where the company is identified as a potentially responsible party or has indemnification obligations.
• Two federal, state, or provincial enforcement actions where fines or penalties could potentially equal or exceed $1.0 million.

Stakeholder Impact

• Shareholders: Positive impact due to strong financial performance, increased net income, and improved cash flow, potentially leading to increased shareholder value.
• Employees: Potential for increased incentive compensation due to strong company performance, but also potential impact from integration of acquired businesses.
• Creditors: Positive impact due to improved liquidity, strong cash flow generation, and continued compliance with debt covenants.
• Suppliers: Continued demand for services and products, with potential for increased business due to acquisitions and growth initiatives.

Next Steps

• Complete the acquisition of ES&H in the second half of 2026.
• Continue to fund capital expenditures and strategic growth investments through cash from operations.
• Monitor debt instruments and evaluate opportunities for refinancing or reallocation.
• Continue to manage SG&A expenses in line with performance and revenue levels.

Key Dates

Recommendation

The company demonstrated robust financial growth across key metrics in Q2 2026, including significant increases in revenue, net income, and Adjusted EBITDA. Strategic acquisitions and improved cash flow generation further strengthen its financial position and future prospects, indicating a strong investment opportunity.

Keywords

environmental services, waste management, sustainability solutions, hazardous waste, recycling, industrial services, oil recycling, PFAS