Business Overview
Clean Harbors, Inc. (NYSE: CLH) is North America’s leading provider of environmental and industrial services. Founded in 1980 and headquartered in Massachusetts, the Company operates an extensive network across the United States, Canada, Mexico, Puerto Rico, and India. Clean Harbors serves a diverse customer base that includes a majority of Fortune 500 companies, spanning multiple industries such as chemical, manufacturing, and refining, alongside numerous government agencies.
Customers rely on the Company for a broad array of critical services, including end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling solutions. Through its Safety-Kleen subsidiary, Clean Harbors is also recognized as a premier provider of parts washers and environmental services to commercial, industrial, and automotive clients. Furthermore, Safety-Kleen operates as North America’s largest re-refiner and recycler of used oil.
Key Financial Performance Highlights
Clean Harbors delivered a strong financial performance in 2025, marked by top-line growth, margin expansion, and record cash flow generation.
Fourth-Quarter 2025 Performance:
Revenues:
For the fourth quarter, total revenues increased by 5% year-over-year, reaching $1.50 billion compared to $1.43 billion in the corresponding period of 2024.
Profitability Margins:
Gross profit for the quarter stood at $459.0 million, representing a gross margin of 30.6%, an improvement from the 29.9% margin recorded in Q4 2024. Income from operations rose by 16% year-over-year to $158.4 million.
Net Income:
Net income for the quarter was $86.6 million, translating to diluted earnings per share (EPS) of $1.62. This is an increase from the net income of $84.0 million, or $1.55 per diluted share, reported in Q4 2024.
Adjusted EBITDA:
Adjusted EBITDA for the fourth quarter increased by 8% to $278.7 million, with the Adjusted EBITDA margin expanding to 18.6% from 18.0% in the prior-year period.
Full-Year 2025 Performance:
Revenues:
For the full year 2025, total revenues grew by 2% to achieve a record $6.03 billion, compared to $5.89 billion in 2024.
Operating Income:
Income from operations marginally increased to $673.4 million from $670.2 million in the previous year.
Net Income:
The Company reported full-year net income of $391.0 million, or $7.28 per diluted share, representing a slight decline from the net income of $402.3 million, or $7.42 per diluted share, recorded in 2024.
Adjusted EBITDA:
Full-year Adjusted EBITDA experienced a 5% growth, reaching $1.17 billion compared to $1.12 billion in 2024. The full-year Adjusted EBITDA margin climbed to 19.4%, up from 19.0% in the prior year.
Cash Flow and Liquidity:
- Clean Harbors reported robust cash generation, with net cash from operating activities reaching $866.7 million for the full year, up from $777.8 million in 2024.
- The Company generated a record adjusted free cash flow of $509.3 million in 2025, significantly higher than the $357.9 million reported in the prior year. Management attributed this robust increase to higher Adjusted EBITDA generation, improvements in working capital management, and a reduction in net capital expenditures (exclusive of significant strategic growth investments).
- At the end of the year, cash and cash equivalents stood at a healthy $826.3 million.
Segment-wise Performance
Environmental Services (ES): The ES segment served as the primary growth engine for Clean Harbors, delivering higher profitability and volume expansion against a muted industrial backdrop.
- For the fourth quarter, the ES segment generated $1.30 billion in revenue, reflecting a 6% increase from $1.23 billion in Q4 2024.
- Segment Adjusted EBITDA outpaced revenue growth, increasing by 8% to $335.8 million, which drove a 50-basis-point improvement in the segment’s Adjusted EBITDA margin to 25.8%. Management noted this marked the 15th consecutive quarter of year-over-year margin expansion for the segment.
- Within the segment, Technical Services revenue grew 8%, fueled by robust demand for disposal and recycling services, higher project volumes, and continued expansion in per- and polyfluoroalkyl substances (PFAS) services.
- Safety-Kleen Environmental Services revenue increased by 7%, driven by favorable pricing and higher volumes, particularly in vacuum services.
- Field Services revenue saw a 13% growth, supported by large-scale emergency response projects, which accounted for approximately $30 million in revenue during Q4 2025.
- For the full year, the ES segment achieved revenues of $5.19 billion and an Adjusted EBITDA of $1.34 billion, with the annual margin expanding by 60 basis points to 25.9%. Both Technical Services and Safety-Kleen Environmental delivered 7% revenue growth for the full year.
Safety-Kleen Sustainability Solutions (SKSS):
The SKSS segment encountered market headwinds but demonstrated strong margin resilience through strategic pricing actions.
- Fourth-quarter revenues for the segment declined by 3% to $198.9 million from $205.3 million in Q4 2024. This top-line decrease was primarily attributed to a weaker pricing environment for base oil and blended products, alongside lower volumes sold.
- Despite the revenue decline, segment Adjusted EBITDA increased by 22% to $30.0 million.
- This profitability improvement resulted in a massive 310-basis-point expansion in the segment’s Adjusted EBITDA margin to 15.1%.
- The margin expansion was driven by the aggressive implementation of a charge-for-oil (CFO) pricing strategy to offset declining base oil prices, alongside cost reduction initiatives and efficiency gains in transportation.
- During Q4, the Company gathered 56 million gallons of waste oil (compared to 63 million in Q4 2024) at a CFO rate that was sequentially increased by nearly 50% from the third quarter.
- For the full year, SKSS recorded revenues of $837.4 million and Adjusted EBITDA of $137.5 million.
Operational Metrics and Key Drivers
Operational efficiency and safety were key achievements for Clean Harbors in 2025.
Safety and Operations:
The Company achieved its best-ever safety performance, recording a historic low Total Recordable Incident Rate (TRIR) of 0.49. The incinerator network maintained high utilization rates; excluding the newly operational Kimball incinerator, utilization stood at 87% in Q4 2025 (compared to 94% in Q4 2024, which benefited from limited maintenance days) and reached 89% for the full year. Landfill volumes experienced a substantial 56% increase in the fourth quarter, reflecting strong project activity. The Company also handled nearly 22,000 emergency response events over the year and successfully reduced voluntary employee turnover by 150 basis points to a five-year low.
PFAS Tailwinds:
The Company’s strategic focus on PFAS destruction represents a significant operational driver. Clean Harbors noted accelerating growth and a robust pipeline for its Total PFAS Solution, which encompasses lab analysis, water filtration, site remediation, and disposal. Momentum is supported by an EPA study on PFAS destruction by hazardous waste incinerators, the testimony of the Company’s Co-CEO as an expert witness at a Senate hearing, and a newly secured $110 million contract for PFAS water filtration expansion at Joint Base Pearl Harbor-Hickam. Furthermore, a new National Defense Authorization Act (NDAA) requiring the Pentagon to address PFAS disposal at over 700 military sites continues to bolster long-term demand.
Management Commentary and Strategic Updates
Management expressed strong confidence in the Company’s growth trajectory and disciplined capital allocation strategy, which prioritizes maximizing return on invested capital (ROIC).
Share Repurchases:
During 2025, Clean Harbors returned significant capital to shareholders by repurchasing a record $250 million of CLH shares at an average price of approximately $222 per share. Entering 2026, the Board of Directors authorized a $350 million expansion to the program, restoring total availability to $600 million, to be funded via available cash.
M&A Activity:
Clean Harbors signed an agreement to acquire environmental businesses from Depot Connect International (DCI) for approximately $130 million, expected to close in the first half of 2026. These assets, comprising five locations across Ohio, Louisiana, and Texas, offer waste handling, tank cleaning, railcar cleaning, and wastewater treatment capabilities. The transaction is anticipated to generate approximately $40 million in annual revenue and $11 million in Adjusted EBITDA.
Organic Fleet Expansion:
To accelerate organic growth, the Company announced a $50 million strategic investment to expand its vacuum truck fleet within the Safety-Kleen Environmental business over the next two years, an initiative expected to yield a five-year payback through enhanced cross-selling.
Financial Guidance:
Looking ahead to 2026, management provided guidance grounded in modest economic assumptions. For Q1 2026, Adjusted EBITDA is expected to grow by 4% to 7% year-over-year in the ES segment and 1% to 3% on a consolidated basis. For the full year 2026, the Company projects Adjusted EBITDA in the range of $1.20 billion to $1.26 billion, based on anticipated GAAP net income between $410 million and $461 million. Adjusted free cash flow for 2026 is guided to be between $480 million and $540 million, driven by expected net cash from operating activities ranging from $820 million to $940 million.
Notable Risks and Challenges
While delivering record results, the Company highlighted specific market challenges and risk factors:
- Commodity Price Volatility: The SKSS segment continues to navigate a weakened pricing environment for base oil and blended products, necessitating proactive adjustments to charge-for-oil rates to maintain spreads.
- End-Market Softness: Management noted that the Industrial Services business has faced a challenging environment characterized by reduced customer spending over the past two years, though stabilization is anticipated in 2026.
- Operational and Environmental Liabilities: The business model carries inherent environmental and product liability risks associated with hazardous waste management. Furthermore, operations are subject to extensive statutory and environmental regulatory requirements.
- Macroeconomic and Market Sensitivities: The Company remains susceptible to negative economic developments, market volatility, and fluctuations in both interest rates and foreign currency exchange rates.
- Execution Risks: Future performance may be impacted by risks associated with retaining and hiring key personnel, assumptions regarding landfill expansions, and the successful execution of strategic acquisitions.
- External Disruptions: Forward-looking statements identify exposures to the occurrence of natural disasters, catastrophic events, and cybersecurity risks.