Enviri Q3 Adjusted EBITDA Rises 21%, Segment Guidance Raised

Enviri Corporation (NYSE: NVRI) reported a 21% year-over-year increase in third-quarter adjusted EBITDA despite flat revenue, as stronger results at Harsco Environmental and improved profitability at Harsco Rail lifted the consolidated adjusted EBITDA margin. The company also raised its full-year 2026 adjusted EBITDA guidance for both businesses and said internal improvement measures are targeting $40 million of earnings benefits over the next two years.

Revenue from continuing operations was $325 million for the quarter ended September 30, essentially unchanged from a year earlier, with growth at Harsco Environmental offset by lower Harsco Rail sales. Adjusted EBITDA rose to $47 million from $39 million, while the adjusted EBITDA margin expanded to 14.4% from 11.9%.

GAAP income from continuing operations was $6 million, compared with a $21 million loss in the prior-year period. GAAP diluted earnings per share from continuing operations were $0.16, versus a loss of $0.82. On an adjusted basis, the company recorded a diluted loss of $0.16 per share, narrowing from a loss of $0.59.

The adjusted result excludes restructuring costs, transaction-related expenses, a gain tied to a payment from GBM in the Rail business and a favorable adjustment to the Deutsche Bahn contract-exit reserve. Clean Earth is presented as a discontinued operation for all periods and is excluded from adjusted key performance indicators, including adjusted free cash flow.

Environmental growth offsets lower Rail revenue

Harsco Environmental revenue increased 5% to $273 million, driven by higher volumes and service pricing. GAAP operating income rose 47% to $20 million, while adjusted EBITDA increased 13% to $50 million. The segment’s adjusted EBITDA margin widened to 18.2% from 17.0%, reflecting revenue growth and internal improvement initiatives.

Harsco Rail revenue declined 19% to $52 million because of lower volumes, including reduced activity from engineered-to-order contracts. Despite the revenue decline, the segment generated adjusted EBITDA of $1 million, compared with a $4 million loss a year earlier, and its adjusted EBITDA margin improved to 1.6% from negative 5.7%. Enviri attributed the improvement to a more favorable business mix and lower operating costs, including the effect of a lower cost of sales under LIFO accounting.

Harsco Rail also entered into an agreement with Deutsche Bahn that releases it from all obligations under an engineered-to-order contract. The business received an initial payment from GBM for project assets, while discussions with Network Rail remain ongoing.

Segment outlook strengthened

For full-year 2026, Enviri expects Harsco Environmental revenue to increase by a low-single-digit percentage from 2025 and adjusted EBITDA to reach $180 million to $184 million. The company identified demand for services and products, new contracts and improvement initiatives as positive drivers, partly offset by exited contracts and items recorded in 2025 that will not recur.

Harsco Environmental is expected to produce fourth-quarter adjusted EBITDA of $46 million to $50 million. The midpoint would be comparable with the prior-year period, as higher volumes and pricing are expected to be offset by the absence of prior-year tax credits.

Harsco Rail revenue is projected to decline by a high-single-digit percentage for the full year, with adjusted EBITDA expected to remain negative at between $7 million and $10 million. Aftermarket volumes, cost optimization and productivity initiatives are expected to support results, while lower standard-equipment and contracted-services volumes remain headwinds.

For the fourth quarter, Harsco Rail expects an adjusted EBITDA loss of $2 million to $5 million. The midpoint would be modestly better than the prior-year result, reflecting higher aftermarket volumes and cost improvements.

Cash flow remains a near-term constraint

GAAP operating cash flow was negative $7 million in the third quarter, compared with positive $34 million a year earlier. Adjusted free cash flow remained negative at $18 million, though that represented an improvement from negative $41 million in the prior-year quarter. Enviri said the negative result was anticipated and expects underlying improvement in the fourth quarter.

The outlook remains subject to execution of the company’s improvement initiatives and the expected benefits from its merger and separation transactions. Other disclosed uncertainties include customer concentration, fixed-price and long-term contracts, regulatory and permitting requirements, demand and pricing changes, foreign-exchange and interest-rate movements, steel and aluminum industry cycles, labor and cybersecurity risks, and the company’s indebtedness and financial covenants.