Clean Harbors' Record Quarter Includes a $120 Million One-Off

Clean Harbors produced a record third quarter, but one emergency cleanup explains a meaningful part of the acceleration. Revenue rose 21% from a year earlier to $1.87 billion, net income increased 75% to $208.1 million, and adjusted EBITDA climbed 42% to $456.1 million. Adjusted EBITDA margin expanded 3.7 percentage points to 24.4%.

The standout contribution came from a fire cleanup at a cold-storage warehouse in Los Angeles. Clean Harbors said the job generated about $120 million of emergency-response revenue as teams removed roughly 75,000 tons of frozen food waste. Field Services revenue grew more than 70%.

That work demonstrated the company's ability to mobilize at scale, but it should not be treated as recurring quarterly revenue. The more durable evidence came from the rest of Environmental Services. The segment's adjusted EBITDA margin reached 27.4%, marking an eighteenth consecutive quarter of year-over-year expansion. Technical Services revenue rose 3%, incinerator utilization was 87%, and deferred revenue increased 20% as waste awaited processing.

Safety-Kleen also benefited from favorable conditions. Revenue in its sustainability-solutions segment rose 46%, while adjusted EBITDA increased 209%. Management attributed part of the gain to global supply disruptions that supported prices for base oil and lubricants. Group III production rose about 20%, and the company collected 62 million gallons of waste oil while maintaining an average charge-for-oil position.

A bigger hub in Southern California

Clean Harbors plans to invest $55 million in a Los Angeles-area hub that will consolidate operations from six facilities. Management expects up to $7 million of annual lease savings and room to expand wastewater treatment, electronic-waste processing and other services.

A simple BTI calculation divides the investment by the maximum stated lease savings and produces a payback period of about 7.9 years. That is not a company forecast. It excludes operating costs, taxes, construction timing and any revenue from expanded services, so the actual return could be better or worse.

The company raised the midpoint of both full-year adjusted EBITDA and adjusted free cash flow guidance by $80 million. It now expects adjusted EBITDA of $1.44 billion to $1.48 billion and adjusted free cash flow of $600 million to $660 million. For the fourth quarter, management expects adjusted EBITDA growth of 23% to 26%.

Leadership will also become simpler. Eric Gerstenberg will become sole chief executive on January 1, 2027. Co-CEO Mike Battles will retire from the board at year-end and remain a strategic adviser during 2027. Gerstenberg has worked at Clean Harbors since 1989 and previously oversaw the operating network, reducing the execution risk of the transition.

The quarter combined broad operating improvement with two unusually favorable drivers: a large emergency job and strong refined-product pricing. The next test is whether disposal volumes, PFAS work, acquisitions and the new hub can sustain growth after the emergency revenue passes and lubricant markets normalize.