Clean Harbors Q3 2026 Earnings: Adjusted EBITDA Rises 42% as Margins Expand
Clean Harbors reported strong Q3 2026 results, with revenue rising 21% year over year to $1.87 billion and diluted EPS jumping 78% to $3.93. Margin expansion and cash generation were amplified by a $120 million emergency-response project and favorable re-refined product pricing. Environmental Services and Safety-Kleen Sustainability Solutions delivered robust segment growth. Driven by this performance, the company raised its full-year adjusted EBITDA and free cash flow midpoints by $80 million each. However, key risks include the episodic nature of emergency work, volatile commodity pricing, and reduced cash reserves following strategic acquisitions.
Clean Harbors (NYSE: CLH) reported Q3 2026 revenue of $1.87 billion, up 21% year over year, while diluted EPS increased to $3.93 from $2.21 for the quarter ended September 30, 2026. Net income, adjusted EBITDA and cash generation all increased, supported by a large emergency-response project, Environmental Services demand and favorable pricing for re-refined products.
Core Financial Results
Revenue increased by $320.1 million, with both operating segments contributing. Profit grew faster than revenue: operating income rose 65%, while adjusted EBITDA increased 42% and its margin expanded by 370 basis points.
The approximately $120 million emergency-response project was an important contributor, but other drivers included waste volumes, pricing initiatives, PFAS-related work and higher prices for SKSS refined products.
| Metric | Q3 2026 | Q3 2025 | Year-Over-Year Change |
|---|---|---|---|
| Revenue | $1.87 billion | $1.55 billion | +21% |
| Gross profit and margin | Approx. $661.4 million; 35.4% | Approx. $500.8 million; 32.3% | Approx. +32%; +305 bps |
| Operating income and margin | $318.1 million; 17.0% | $193.0 million; 12.5% | +65%; approx. +456 bps |
| Net income | $208.1 million | $118.8 million | +75% |
| Diluted EPS | $3.93 | $2.21 | +78% |
| Adjusted EBITDA and margin | $456.1 million; 24.4% | $320.2 million; 20.7% | +42%; +370 bps |
| Operating cash flow | $419.2 million | $302.0 million | +39% |
| Adjusted free cash flow | $323.1 million | $230.6 million | +40% |
Gross profit and the associated margins are calculated from the reported revenue and cost-of-revenue figures. Adjusted EBITDA and adjusted free cash flow are non-GAAP measures.
Business and Segment Performance
Environmental Services generated third-party revenue of $1.54 billion, up approximately 17%. Its adjusted EBITDA margin reached 27.4%, marking the segment’s 18th consecutive quarter of year-over-year margin expansion.
Field Services was the largest contributor, with revenue growth above 70%. One major emergency-response assignment produced approximately $120 million of revenue at emergency-response rates because of the project’s scale and expedited schedule. Technical Services revenue increased 3%, incinerator utilization was 87%, and deferred revenue rose 20% as waste awaiting processing and the sales pipeline increased.
Safety-Kleen Environmental Services revenue advanced 11% on pricing and momentum in its core offerings. Industrial Services recorded modest growth as refinery turnaround activity remained soft.
Safety-Kleen Sustainability Solutions reported direct revenue of $318.3 million, up 46%, while third-party revenue reached $331.0 million. Adjusted EBITDA increased 209%, and the segment margin more than doubled. Global supply disruptions supported pricing for base oil and lubricants, while Group III production increased approximately 20%. The business collected 62 million gallons of waste oil and maintained an average charge-for-oil position, helping control feedstock costs.
Profitability, Cash Flow and the Balance Sheet
The expansion in profitability was broad. Cost of revenue increased more slowly than sales, lifting the calculated gross margin by approximately three percentage points. Selling, general and administrative expenses rose to $217.1 million from $189.6 million, also below the rate of revenue growth, supporting the increase in operating margin.
Quarterly operating cash flow rose to $419.2 million. Capital expenditures increased to $172.8 million from $94.4 million, reflecting heavier investment, including strategic growth projects. Clean Harbors’ $323.1 million adjusted free cash flow adds back $72.0 million of strategic growth investments and includes $4.8 million of asset-disposal proceeds; before those adjustments, operating cash flow less capital expenditures was approximately $246.4 million.
Cash and cash equivalents declined to $423.5 million at September 30 from $826.3 million at the end of 2025. During the first nine months, the company spent $689.0 million on acquisitions, $397.5 million on property and equipment and $77.1 million on share repurchases. Long-term debt excluding the current portion increased to $2.88 billion from $2.76 billion, while the company borrowed $120.0 million through its revolving credit facility.
Episodic Response Work and Favorable Oil Markets Amplified the Quarter
The headline growth rates reflect a combination of underlying demand and unusually favorable contributions. Environmental Services benefited from healthy waste volumes, pricing and PFAS-related work, but the single $120 million emergency-response event represented roughly 6% of total quarterly revenue. Technical Services, by comparison, grew only 3%, while Industrial Services continued to face soft refinery turnaround demand.
SKSS also benefited from market conditions that may fluctuate. Global supply shortages kept refined-product prices elevated, widening the opportunity for the company’s re-refining operations. Improved product mix, increased Group III output and feedstock-cost discipline added operational support, but favorable commodity pricing remained an important part of the segment’s record profitability.
Financial Guidance
Clean Harbors raised the midpoints of its full-year adjusted EBITDA and adjusted free cash flow guidance by $80 million each following the stronger year-to-date performance and current market conditions. The company also expects adjusted EBITDA to grow 23% to 26% year over year in the fourth quarter.
| Metric | Latest Guidance | Previous Guidance | Change |
|---|---|---|---|
| Q4 adjusted EBITDA growth | 23% to 26% | Not provided | New outlook |
| 2026 adjusted EBITDA | $1.44 billion to $1.48 billion | Prior range not provided | Midpoint raised by $80 million |
| 2026 GAAP net income | $528 million to $563 million | Not provided | Basis for adjusted EBITDA guidance |
| 2026 adjusted free cash flow | $600 million to $660 million | Prior range not provided | Midpoint raised by $80 million |
| 2026 operating cash flow | $970 million to $1.09 billion | Not provided | Basis for adjusted free cash flow guidance |
The full-year adjusted EBITDA and adjusted free cash flow midpoints are now $1.46 billion and $630 million, respectively.
Risks Investors Should Monitor
- Emergency-response revenue is episodic: The approximately $120 million project materially contributed to Q3 growth and may not recur at a similar scale or frequency.
- SKSS profitability depends partly on market pricing: A reversal in global supply disruptions or lower pricing for base oil and lubricants could pressure re-refining spreads and segment margins.
- Industrial Services remains uneven: Soft refinery turnaround activity continued to constrain growth despite stronger results elsewhere in Environmental Services.
- Capital deployment has reduced cash: Acquisitions and capital investments expanded the company’s capabilities but coincided with lower cash and higher long-term debt during the first nine months of 2026.
- Adjusted free cash flow excludes strategic investments: The company’s non-GAAP measure was higher than operating cash flow less capital expenditures because it added back significant strategic growth spending.
Summary
Clean Harbors’ Q3 2026 results combined higher revenue with substantial margin expansion and stronger cash generation. A large emergency-response project and favorable re-refining markets amplified the quarter, while waste demand, pricing, PFAS work and product-mix improvements provided broader support. The raised full-year guidance signals confidence in the remaining quarter, but the durability of emergency-response revenue, refined-product pricing and cash generation after strategic investments will remain important areas to monitor.
This article may include AI-generated content that is human-reviewed, which is for reference and general information purposes only and does not constitute investment advice.
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