Clean Harbors Q3 Earnings Rise on Environmental Services and Re-Refining Spreads

Clean Harbors (NYSE: CLH) reported sharply higher third-quarter 2026 earnings as stronger Environmental Services activity and wider re-refining spreads lifted profitability. Revenue increased 20.7% year over year to $1.87 billion, while net income rose to $208.1 million from $118.8 million. Diluted earnings per share increased to $3.93 from $2.21.

Adjusted EBITDA climbed 42.5% to $456.1 million, outpacing revenue growth and expanding the companywide adjusted EBITDA margin to 24.4% from 20.7%. Gross margin rose to 35.4% from 32.3%, while selling, general and administrative expenses declined as a percentage of revenue to 11.6% from 12.2%.

For the first nine months of 2026, Clean Harbors generated net income of $441.8 million, compared with $304.4 million a year earlier. Adjusted EBITDA reached $1.11 billion, up from $891.3 million, with the nine-month margin increasing to 22.0% from 19.7%.

Environmental Services benefits from emergency response work

Environmental Services revenue grew 17% to $1.55 billion, supported by Field Services, Safety-Kleen Environmental Services and Technical Services, as well as acquisitions. The quarter included approximately $120 million of Field Services revenue from a large-scale emergency response event.

The segment’s adjusted EBITDA rose 19% to $425.4 million, and its margin increased 60 basis points to 27.4%. Clean Harbors attributed the improvement to revenue mix, pricing strategies and productivity gains.

Incinerator utilization, including the new Kimball facility, was 87%, compared with 88% in the prior-year quarter. The company described collection volumes as healthy and reported a 20% increase in deferred revenue.

Safety-Kleen Environmental Services revenue increased 11%, reflecting pricing and volume growth in core services, particularly containerized waste and vacuum services. The business completed 239,000 parts-washer services during the quarter.

Re-refining spreads lift sustainability business

Safety-Kleen Sustainability Solutions posted a 46% increase in revenue to $318.3 million. The company said pricing rose because of continued global scarcity of base and blended products.

Adjusted EBITDA for the business more than tripled to $126.5 million from $40.9 million, while its adjusted EBITDA margin widened to 39.7% from 18.8%. Clean Harbors said the re-refining spread remained wide in the supply-constrained market environment.

Waste-oil collections totaled 62 million gallons, down from 64 million gallons a year earlier. Group III volumes increased by approximately 20%. Blended products represented 19% of total volumes sold, compared with 18% in the prior-year period, while direct blended sales rose to 12% of volumes from 9%.

Cash generation and 2026 outlook

Third-quarter cash from operating activities increased to $419.2 million from $302.0 million. Adjusted free cash flow rose to $323.1 million from $230.6 million, even as additions to property, plant and equipment increased. The non-GAAP cash-flow measure excludes qualifying strategic growth investments, which totaled $72.0 million in the quarter, under the company’s stated methodology.

Clean Harbors repurchased $25 million of shares during the quarter, compared with $50 million a year earlier. At Sept. 30, the company held $516.6 million in cash and short-term marketable securities and reported $2.89 billion of current and long-term debt.

As of Oct. 28, management projected full-year 2026 net income of $528 million to $563 million and adjusted EBITDA of $1.44 billion to $1.48 billion. The company also expects net cash from operating activities of $970 million to $1.09 billion and adjusted free cash flow of $600 million to $660 million.

Clean Harbors said its capital-allocation priorities include organic-growth capital spending, evaluating acquisition and divestiture opportunities, executing its authorized share-repurchase plan, and assessing its debt structure and leverage. The outlook remains subject to uncertainties including business and economic conditions, customer demand, tariffs and legislation, acquisition execution and other risks described in the company’s regulatory filings.