Republic Services’ first quarter results reflected strong pricing execution and disciplined cost management, allowing the company to expand margins despite persistent softness in waste volumes. Management pointed to the ability to price ahead of inflation as a key driver, with CEO John Vander Ark highlighting that “average yield on total revenue was 4.5%,” helping offset weather-related headwinds and weaker construction and manufacturing activity. While underlying sales volumes remained under pressure, the company’s focus on operational efficiency and portfolio mix supported robust earnings growth.
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Republic Services (RSG) Q1 CY2025 Highlights:
- Revenue: $4.01 billion vs analyst estimates of $4.05 billion (3.8% year-on-year growth, 0.9% miss)
- Adjusted EPS: $1.58 vs analyst estimates of $1.53 (3.1% beat)
- Adjusted EBITDA: $1.27 billion vs analyst estimates of $1.24 billion (31.6% margin, 2.4% beat)
- Operating Margin: 20.1%, up from 19% in the same quarter last year
- Sales Volumes fell 1.2% year on year, in line with the same quarter last year
- Market Capitalization: $77.56 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Republic Services’s Q1 Earnings Call
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Sabahat Khan (RBC Capital Markets) asked about trends in cyclical volumes and any recovery signs in construction and manufacturing. CEO John Vander Ark pointed to continued softness, especially in construction, and described manufacturing as “more of a wait and see” due to uncertainty around tariffs.
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Bryan Bergmeier (Citi) inquired about the drivers of margin expansion and whether the gains were sustainable. CFO Brian DelGhiaccio attributed most of the improvement to price increases outpacing cost inflation and noted that a mix shift toward higher-margin services also played a role.
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Tyler Brown (Raymond James) questioned the sustainability of Environmental Solutions margins and the recurring versus project-based revenue mix. Vander Ark confirmed that about 75% of revenue is recurring and highlighted the stable demand for industrial services despite recent softness.
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Toni Kaplan (Morgan Stanley) probed the expected duration of volume declines from contract shedding and whether this was linked to recent acquisitions. Vander Ark said the intentional reduction could persist for several quarters and is part of the company’s focus on higher-return contracts.
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Jerry Revich (Goldman Sachs) asked about pricing resilience and customer retention amid higher prices. Vander Ark credited service quality improvements and noted “customers are more receptive to pricing increases” when value is clear.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) progress on ramping commercial production at new polymer centers, (2) the pace at which renewable natural gas projects come online and begin contributing to earnings, and (3) trends in construction and manufacturing waste volumes as broader economic activity evolves. The trajectory of the acquisition pipeline and the company’s ability to sustain margin discipline will also be critical signposts.
Republic Services currently trades at $248.19, up from $240.38 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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