GFL

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. GFL Environmental (TSX:GFL) drew renewed attention after releasing FY2025 results that highlighted revenue of CA$6.62b, adjusted EBITDA of CA$1.99b, and adjusted free cash flow of CA$755.9m. The company also underscored dividend sustainability supported by recurring waste management revenue and improving margins, while outlining FY2026 plans that balance growth investment, leverage reduction, and ongoing shareholder returns. See our latest analysis for GFL Environmental. Following the FY2025 update, GFL Environmental’s share price has risen 6.37% over the past month and 13.89% over the past quarter, although the 1-year total shareholder return is down 14.95% while the 3-year total shareholder return is up 26.65%. This points to improving momentum after a weaker spell. If this kind of rebound has your attention, it can be a useful moment to look beyond a single stock and see what else is setting up well in the market through the 3 top founder-led companies After that rebound in GFL Environmental’s stock and a solid set of FY2025 numbers, the key issue now is whether most of the easy upside is already reflected or if valuation still leaves meaningful room ahead. The most followed narrative on GFL Environmental pegs fair value at CA$70.55 per share, compared with the latest close at CA$58.13. That gap rests on a very specific view of how revenues, margins, and cash flows evolve from here. Read the complete narrative. Want to see what justifies a fair value above CA$70? The narrative leans on steady revenue expansion, thinner margins, and a punchy future earnings multiple. Curious which specific growth and profitability assumptions support that outcome and how they connect to that higher implied valuation? Result: Fair Value of CA$70.55 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, there are still clear swing factors for GFL Environmental, including execution risk around the ES business sale and sensitivity to commodity prices and currency moves. Find out about the key risks to this GFL Environmental narrative. The analyst narrative points to GFL Environmental trading below fair value, yet simple pricing signals tell a different story. On a P/S of 3x, the stock sits above the North American Commercial Services industry at 1.4x and above the peer average at 2.8x, while the fair ratio sits nearer 2.8x. That premium suggests investors are already paying up, so the key question is how much cushion is really left if expectations are wrong. For a closer look at what this pricing gap could mean in practice, including where the fair ratio implies the market could shift over time, See what the numbers say about this price — find out in our valuation breakdown. With sentiment on GFL Environmental mixed but cautiously optimistic, it helps to look past the headlines and test the numbers yourself while the market is paying attention. To see which factors are driving that optimism and how they line up with your own view, review the 2 key rewards If GFL Environmental has sharpened your focus, do not stop here. Broadening your watchlist now can help you spot other opportunities before the crowd catches on. Target potential value opportunities by scanning companies that combine quality fundamentals with attractive pricing through the 11 high quality undervalued stocks Strengthen your income stream by reviewing companies that pay higher yields and aim for stability using the 4 dividend fortresses Prioritise resilience by screening for companies that pair sturdy balance sheets with solid fundamentals via the solid balance sheet and fundamentals stocks screener (12 results) This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include GFL.TO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Clean Harbors, Inc. CLH shares have gained 13.3% in the past three months, extending a broader advance as operating results and the 2026 outlook improved. The recent move has fundamental support from earnings growth, disposal-network demand and higher guidance. Still, a premium valuation leaves less room for execution shortfalls and keeps the investment case balanced. Second-quarter earnings rose 36.4% year over year to $3.22 per share and topped the Zacks Consensus Estimate of $2.74 by 17.5%. Revenues increased 12% to $1.74 billion, exceeding the consensus mark of $1.63 billion by 6.8%. Profitability strengthened with the top line. Adjusted EBITDA climbed 21.6% to $409 million and the adjusted EBITDA margin expanded 190 basis points to 23.6%. Net income increased 34.3% to $170.5 million, while income from operations advanced 27.9% to $268.9 million. Environmental Services revenues rose 7.7% to $1.46 billion. Technical Services revenues increased 18% as disposal and recycling demand, project activity and acquisitions supported growth. Incinerator utilization reached 91% versus 86% a year earlier, while landfill volumes increased 7%. The demand picture includes remediation and PFAS-related work, plus a 10-year disposal contract valued at an estimated $600 million. The contract begins in the fourth quarter of 2026 and is expected to reach full capacity in 2030, adding a longer-duration element to the disposal-network story. Management raised the midpoint of 2026 adjusted EBITDA guidance by $110 million to $1.38 billion. The new range is $1.35-$1.41 billion. It also lifted the midpoint of adjusted free cash flow guidance by $30 million to $550 million, within a $520-$580 million range. The third-quarter outlook points to continued momentum. Clean Harbors expects adjusted EBITDA to grow 24%-28% year over year, supported by emergency-response work, PFAS opportunities, reshoring activity and favorable demand for re-refined products. CLH trades at 15.8X EV/EBITDA versus 12.5X for its Zacks sub-industry and above its five-year median of 11.7X. The premium increases the importance of sustained earnings growth and delivery against the raised outlook if the recent share-price advance is to continue. Image Source: Zacks Investment Research GFL Environmental Inc. GFL is a large North American environmental-services company focused on solid waste management. Waste Connections, Inc. WCN provides non-hazardous waste collection, transfer and disposal services, making both useful reference points for investors assessing the broader waste-services landscape. The 13.3% three-month gain is backed by better earnings, higher margins and stronger guidance, but valuation limits the case for extrapolating the advance without qualification. The operating setup remains favorable, while the premium multiple raises the bar for continued execution. CLH currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Clean Harbors also has a VGM Score of B, Growth Score of B, Momentum Score of B and Value Score of C. The B scores indicate favorable growth and momentum characteristics, while the C Value Score is more neutral. Combined with a Hold rank, the mix supports a measured stance rather than treating recent momentum as an automatic buying signal. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Clean Harbors, Inc. (CLH) : Free Stock Analysis Report Waste Connections, Inc. (WCN) : Free Stock Analysis Report GFL Environmental Inc. (GFL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 8:30 a.m. ET Founder and Chief Executive Officer - Patrick Dovigi Chief Financial Officer - Luke Pelosi Operator: Hello, everyone. Thank you for joining us, and welcome to GFL Environmental Inc. Second Quarter Earnings Call. [Operator Instructions] I will now hand the conference over to Patrick Dovigi, Founder and CEO. Mr. Dovigi, please go ahead. Patrick Dovigi: Thank you, and good morning. I would like to welcome everyone to today's call, and thank you for joining us. This morning, we will be reviewing our results for the second quarter and updating our guidance for the year. I'm joined this morning by Luke Pelosi, our CFO, who will take us through our forward-looking disclaimer before we get into details. Luke Pelosi: Thank you, Patrick. Good morning, everyone, and thank you for joining. We have filed our earnings press release, which includes important information. The press release is available on our website. During this call, we'll be making some forward-looking statements within the meaning of applicable Canadian and U.S. securities laws, including statements regarding events or developments that we believe or anticipate may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set out in our filings with the Canadian and U.S. securities regulators. Any forward-looking statement is not a guarantee of future performance, and actual results may differ materially from those expressed or implied in the forward-looking statements. These forward-looking statements speak only as of today's date, and we do not assume any obligation to update these statements, whether as a result of new information, future events and developments or otherwise. This call will include a discussion of certain non-IFRS measures. A reconciliation of these non-IFRS measures can be found in our filings with the Canadian and U.S. securities regulators. I will now turn the call back over to Patrick. Patrick Dovigi: Thank you, Luke. Our strong start to the year continued through the second quarter, yielding financial results ahead of expectations. Our ongoing exceptional performance in the face of an uncertain broader macro environment is a testament to the effectiveness of our growth strategies and the resilience of our business model. Moreover, the quality of our first half results allows us to raise our full year guidance for the second time this year. Once again, our price growth was ahead of plan. The outperformance from pricing in the first quarter was driven largely by tailwinds from our recent growth investments and the ongoing realization of incremental pricing opportunities within our portfolio, which continued through the second quarter. We now have a high degree of visibility towards ending the year with pricing above 6%. Volume was also better than expected as a rebound in winter-related volume delays and EPR benefits more than offset the impact of lower C&D-related activity and special waste volumes. Consistent with the first quarter, we believe the impact of broader economic uncertainty continues to be a drag on C&D volumes compared to prior periods, but we remain well positioned to participate in the upside when these volumes inevitably return. The significant rise in ongoing volatility in diesel prices have impacted margins due to the inherent lag in the fuel surcharge mechanism. The impact of elevated diesel pricing is seen not only in our direct fuel expense, but also in higher costs passed on to us from our third-party transportation providers. Excluding the impact of sudden and significant rise in fuel costs, our operational and SG&A cost intensity as a percentage of revenue trended lower on a year-over-year basis for the sixth consecutive quarter. The ongoing realization of such operating leverage is a result of the growth and self-help initiatives we outlined at last year's Investor Day and was achieved despite headwinds from M&A and lower higher-margin landfill volumes. The successful execution of our operational strategies more than overcome fuel cost volatility and other headwinds faced in the quarter. The team's relentless focus on pricing discipline, cost efficiencies and the ongoing maturation of our asset base is translating into industry-leading underlying margin expansion. Our Canadian segment realized adjusted EBITDA margins of 34% in the second quarter, the highest adjusted EBITDA margin the segment has ever achieved. Consolidated adjusted EBITDA margins organically increased 35 basis points over the prior year despite a very tough comp. Recall, Q2 2025 was the highest Q2 EBITDA margins in our company's history. On M&A, we've been actively preparing for the closing of the SECURE acquisition. The final step before we can close the transaction is the Competition Bureau review, which remains on track and is well advanced. Integration planning is progressing well. And as we've been spending more time with Allen and the whole SECURE team, we grow incrementally optimistic about the opportunistic and opportunities for the combined entity. We remain confident in our ability to close the acquisition by the beginning of the fourth quarter and achieving the pro forma financial framework we previously highlighted. We closed 7 other acquisitions during the quarter, including Frontier and 6 tuck-ins, 2 of which are incremental to the base for which we previously updated guidance. Frontier's first quarter performance under our ownership has gone exceptionally well, and we remain excited about the many growth opportunities available to us in that fast-growing Texas market. As we said on the last call, the Q2 acquisitions would temporarily increase leverage 30 basis points before we naturally delever back to the mid-3s by the end of the year. Our M&A pipeline remains robust, and we still think we can deploy an incremental $300 million to $500 million before year-end. With the significant success in the first half, we are raising our full year outlook for the second time this year. Luke will walk through the details, but we are now expecting to deliver over 15% growth in adjusted EBITDA and nearly 20% growth in adjusted free cash flow over the prior year. Although the guide does not currently include any contribution from SECURE, if we were to close the acquisition in Q4, actual adjusted EBITDA growth could be greater than 20%. I'll now pass the call back to Luke, who will walk through the guidance update and the quarter in more detail, and I'll share some closing comments before we open it up for Q&A. Luke Pelosi: Thanks, Patrick. Revenue grew 16.3% in the quarter, inclusive of 6.4% organic growth, which was a 180 basis point acceleration over the first quarter. Continued price strength together with higher surcharge revenue tied to fuel cost recovery more than offset the anticipated headwinds from volume and commodity prices. Price growth in the quarter of 6.1% was 20 basis points better than planned, a result driven largely by accelerated realization of previously identified pricing opportunities, including the implementation of incremental fuel surcharges. Regionally, pricing was 6.2% in Canada and 6.1% in the U.S. Our pricing success in the first half, together with our expectations for the second half of the year, now expect to yield a full year pricing number nearly 50 basis points better than the original guide. Volume in Q2 was almost 100 basis points better than planned with positive transfer station and residential collection volumes offsetting headwinds from landfill and the lapping of transitory MRF processing volume in the prior year. We attribute the positive transfer station volume primarily to catch up from the Q1 winter weather impacts as broader C&D activity remains muted with external C&D and special waste landfill tons being down 10% in the quarter. With the ongoing macro environment, we now expect the C&D-related trends to persist for the balance of the year, and our full year volume outlook is being updated accordingly. The acceleration of commodity prices at the beginning of the year has continued, and we saw market pricing in the second quarter $12 per ton higher than what we had factored into our Q2 guide. Current market pricing is up another $13 over the Q2 average. And if pricing remains at these levels, Q3 pricing should be approximately 20% better than the prior year. While our exposure to commodity price fluctuations has been significantly reduced post transitioning most of our processing activities to relatively fixed fee-for-service contracts, the improvement in market pricing will provide incremental tailwinds to revenue, EBITDA and margins in the back half of the year. As Patrick said, the second quarter saw continued improvement in underlying operating leverage. Cost of sales before depreciation, amortization and integration costs as a percentage of revenue decreased 80 basis points, excluding the impact of elevated fuel costs. Ongoing efficiency and labor costs, supported by continued improvement in voluntary turnover as well as a 90 basis point reduction in repair and maintenance cost intensity more than offset the recent headwind from M&A. Looking specifically at fuel, as anticipated, our direct cost per unit of diesel in the quarter increased nearly 60% year-over-year. The second quarter also saw indirect diesel cost impacts as our third-party transportation providers implemented incremental fuel surcharge, which resulted in a $5 million headwind to our Q2 guide. We are now in a position where our surcharges are generating sufficient incremental revenue to offset the higher cost tied to diesel prices, although until diesel prices once again fall, our results will be burdened by the unrecovered costs associated with the initial inflection in diesel prices at the beginning of the year. SG&A cost intensity, excluding depreciation expense and other costs, improved 50 basis points over the prior year. As expected, we continue to realize operating leverage on our corporate segment as we continue to grow revenues off this relatively fixed cost base. Adjusted EBITDA margins were 30.4% for the quarter, inclusive of 65 basis point headwind from M&A. Adjusted EBITDA margins were 34% in our Canadian segment, up 20 basis points over the prior year despite negative impacts from fuel and commodities, which were headwinds in both of our geographic segments. Excluding the impact of these exogenous factors and M&A, underlying consolidated Q2 margins were up 125 basis points from the prior year despite the mix impact of the lower high-margin landfill volumes and the 40 basis point margin headwind from the recognition of certain rebates in the prior year quarter that we previewed on the Q1 call. Adjusted free cash flow was $237 million for the quarter, ahead of our guide largely on account of the adjusted EBITDA outperformance as incremental investment in working capital was largely offset by lower-than-planned net CapEx and closure costs, all of which are expected to be timing differences that normalize by year-end. In June, we issued USD 750 million of new bonds in preparation for the closing of the SECURE acquisition. The bond offering was significantly oversubscribed and was executed at the tightest interest rate spread ever offered for a bond of this type in our rating category, once again demonstrating the confidence in our credit quality held by the debt markets. By taking advantage of underlying interest rate differentials in Canada and the U.S., we were able to swap the interest payments back to Canadian dollars at a rate of approximately 4.5%, thereby reducing our overall effective borrowing rate. Excluding the translational impact of the FX rate increasing 500 basis points versus our guide and ending the quarter at 1.42, we exited the quarter with net leverage of 3.9x, 30 basis points higher than the Q1 on account of the second quarter acquisitions and exactly in line with the guidance we previously provided. Q3 leverage will remain consistent with Q2, and the business will then naturally delever by year-end. Any rebound of the Canadian dollar against the U.S. dollar will further improve our reported net leverage. Based on the strength of the first half and our positive outlook for the remainder of the year, we are pleased to be able to increase our guidance top to bottom for the second time this year. Assuming the current FX rate, commodity and diesel prices, we now expect the following amounts for the full year 2026. Revenue of $7.52 billion, adjusted EBITDA of $2.29 billion, adjusted free cash flow of $900 million, inclusive of cash interest of $445 million and a net CapEx spend of $850 million. The new guidance assumes full year pricing increases to just over 6% and volume decreases to approximately negative 50 basis points, an outlook we think is conservative yet appropriate given the current macro backdrop. Any improvement to C&D activity will be a source of upside to the guide. Contribution from M&A increases by $10 million on account of the 2 incremental tuck-in acquisitions and FX related to M&A. Adjusted EBITDA margin increases 10 basis points over our previous guide to 30.5% despite the significant headwind from elevated diesel prices, which we now assume to continue for the balance of the year. Absent the run-up in diesel prices, full year margin would have been more than 31%, more than a 100 basis point increase over the prior year despite headwinds from M&A and commodity prices. Any reduction in diesel prices in the second half of the year would be a source of incremental margin expansion. As Patrick mentioned, the updated guidance does not include the contribution from any further M&A in the year. SECURE alone could increase 2026 adjusted EBITDA by another 6%, and we also expect to close other tuck-in acquisitions before the end of the year, which will also be additive. Specifically, as it relates to the third quarter of 2026, we expect consolidated revenue of approximately $1.99 billion at an adjusted EBITDA margin of 31.2%, 60 basis points ahead of the prior year when excluding the anticipated 100 basis point drag from fuel and M&A. Q3 adjusted free cash flow is expected to be approximately $235 million, inclusive of $165 million in cash interest and about $200 million in net CapEx. I will now pass the call back to Patrick, who will provide some closing comments before Q&A. Patrick Dovigi: Thanks, Luke. We believe our consistent financial performance in the face of ongoing macro uncertainty continues to demonstrate the quality of our platform and the effectiveness of our strategic plans. 2026 is shaping up to be another year of industry-leading growth and the setup for the 2027 growth is even greater. Our business and growth prospects have never been better, and we continue to believe that GFL is uniquely positioned for exceptional value creation for all shareholders over the near term. I will now turn the call over to the operator to open the line for Q&A. Operator: [Operator Instructions] Your first question comes from the line of Sabahat Khan with RBC Capital Markets. Sabahat Khan: You mentioned in the release yesterday that the company has received some unsolicited potential take private offers for GFL and some media outlets had headlines earlier as well. To the extent that you can comment, could you maybe share what you're considering, how you're thinking about potential outcomes here? Patrick Dovigi: Yes. I mean, I think, we -- when there's a dislocation in share price versus sort of intrinsic value, I think that affords others the opportunity to sort of potentially look at sort of a take-private transaction. I think from where we sit today, I think we feel slightly vindicated that I think all the intrinsic value we believe we've created has attracted others and who have approached us about taking the company private at a materially higher number than the company is currently trading for today. So as you know, I'm very sort of well versed in the private equity world. I mean, 6 private equity recaps before GFL went public and then last year, recapping the Environmental Services business and the GIP business that sort of all mid-teens type multiples, right? So we know that world very well. I mean I think it's a testament to the business that's being built. And interestingly enough, two of these parties that approached us were doing a significant amount of work on SECURE and believe SECURE was an exceptional acquisition, which, as you know, the first couple of days after announcing that, we had a lot of explaining to do. But that being said, the Board has formed a special committee. The special committee instructed sort of management to explore the art of the possible. I'm less focused personally on the sort of price out of the gate. I think, obviously, it's materially higher than where we're trading for today. But as most of you know on this call, I'm not a seller. I'm not a seller at $40. I'm not a seller at $50. I'm not a seller at $60. I'm not a seller at $70, and I'd be rolling 100% of my equity into whatever is sort of being proposed. I think there's a lot of opportunity here. If you look at sort of the growth for '27, you look at the free cash flow growth, you look at the setup that we have, SECURE is putting up numbers, the best in their history. GFL is performing better than ever had. From my perspective, my motivation is to keep going and the parties that have approached us as a condition would like me to roll 100% of my equity into a new transaction. So what I'm focused on is, listen, there's two paths. One, there's an offer brought to shareholders, which would require sort of a majority of the minority because I would be being treated differently in terms of just I'd be rolling 100% of my stake. And shareholders can have their say in terms of what they want. And if the fast money hedge fund type investors think it's compelling, then they can vote for something like that. If we've had a lot of conversations over the last couple of weeks with our largest holders. They have interesting views and perspectives on what the value is. And I think it's just a moment in time where we were caught up in this weird AI trade and SECURE and some of the arms that have entered the name pre-closing. But that exists today. And the alternative is staying public as well, which, from my perspective, is a great alternative as well. I have no issue staying public as well. The real question is, would shareholders be happy with the price, which is materially higher than where it's trading at today. And as management and sort of insiders, can we create significantly more value in a shorter amount of time inside a private company? And my biggest focus is on not the next year or 2, my focus is on what that looks like in sort of year 5, 6 and 7. How do we -- it's one thing to actually take a business private, and it's another thing to actually realize the value you've created. And I think we just need clarity in terms of how that's going to be realized, whether it's going to stay in perpetual private hands that have created this new marketplace that exists or is the thought to potentially relist the company in 5 or 6 years after we've created a whole bunch of incremental value over the next 5 or 6 years. So that's what's sort of being discussed. But I do think the Board and management does feel vindicated that some of the smartest and largest institutions in the world that have the biggest pockets of capital believe this company is undervalued and can generate mid-teens to 20% IRRs, even paying a premium to where the stock is trading at today. And from our perspective, these are all the things we've been saying for a long period of time and sort of pounding the table. But from where I sit today, those are the two opportunities. So as I said, the special committee has given us instructive to sort of go explore that, and we'll do that. My intent is, obviously, the focus is on getting SECURE closed. We'll run these in sort of parallel paths. There is no situation where we -- I saw some notes and we're paying some things on whether you could try and pay a break fee and walk away from SECURE or something. That is not -- these buyers that have approached us are -- they love the SECURE asset as much as they love the GFL business. So we are -- we'll continue -- my plan is not to sort of make a career of this. We want to get the answers relatively quickly and pick a path. But from my perspective, either path is a good path. And we'll just -- we'll decide what the right path is and whether it makes sense for myself and makes sense to sort of bring it to shareholders in the sort of near to medium term. Sabahat Khan: Great. I appreciate all the color. Maybe just switching over to sort of the kind of the outlook here for the back half of the year, maybe a question more for Luke. What incremental growth CapEx are you assuming in your updated guide? And maybe if you can share some color on how we should think about the cadence for the remainder of the year. Luke Pelosi: Yes. Thanks, Saba. Great question. In Q1, we said we're going to be looking to spend $200 million for the year. I think that number other than a little bit of FX adjustment, I think you got like $5 million higher on that through FX. That's still largely good. If you look in the quarter, we were a little behind on what we wanted to spend. Some of these projects, the exact cadence is a little bit outside of our control. The one thing I'd note is with SECURE, if we get that done in Q4, as you may be aware, SECURE's capital allocation approach has been to deploy excess free cash into sort of growth capital as well. They did some in Q2. They're planning on a big amount in Q3, and there may be some spillover to Q4. So ultimately, at the end of the year, pro forma for SECURE, we may be something a little bit higher than what stand-alone GFL is. But I think if you factor in FX, the $200 million gets a little bit higher, and it's going to be in and around that sort of ZIP code, maybe a little less, maybe a little bit more, but that number holds true. Patrick Dovigi: Maybe just a quick one, if I can sneak in. The pricing commentary across the sector has been pretty positive. Your commentary this morning is pretty positive, pushing higher even through sort of relative to your initial guide. Is it just the customers are accepting that there is an inflationary environment, fuel is running up, and it's been maybe easier to pass through some pricing. Maybe you can just talk about what's happening in the industry with some of this positive pricing that you're seeing and your peers are seeing? And do you think it could continue into '27 from GFL's perspective? Luke Pelosi: Yes. I like the way you frame it at the end, Saba, because it's difficult for me to talk about my peers. But what we have said consistently is that we see an opportunity to continue to price above cost inflation to generate the spread we need to generate return on invested capital. And then in addition to that amount, we have opportunities within our portfolio above and beyond as we just continue to have, I'd call it, mispriced books of business. So we continue to demonstrate that in the quarterly results. I think the spread above cost inflation remains true and dear to everyone's pricing strategies, and I don't see that changing. So the ultimate headline number may change if you look over a 3- to 5-year period, but again, focusing on that spread. And as we said, we had identified, I think we said in Investor Day, $40 million to $80 million of incremental price, probably a price greater than that. And as we keep doing M&A, that number grows. And a significant component of our outperformance is the effective realization of those opportunities. And at the end of the day, when you think about the 3-year outlook that we provided for Investor Day, I think we'll be able to capture a greater amount than what we had put down on the page at that time. Operator: The next question comes from Tyler Brown with Raymond James. Patrick Brown: Luke, Just there's quite a bit moving around in the guidance. I mean you've got FX, M&A volumes, commodities. Just in broad strokes, can you kind of bridge the guide -- the new guide versus the old guide? I'm kind of feeling that maybe FX, fuel, M&A and commodities are all helps, but then second half volume is a drag. But just any color there would be really helpful. Luke Pelosi: Yes, Tyler, great question. I appreciate with the magnitude, the upswing, there are sort of moving pieces. So if you think of the top line, pricing is now going to be just above 6%. So that's sort of 50 basis points up from our original guide. Now saying volume is going to be about negative 50 bps. So that's about a 75 bps decrease from the original guide that contemplated about 25 bps of positive volume. Surcharge is now at 80 bps positive. So that's about 100 bps over the original guide, and that's just a function of the change in the diesel pricing. Commodity, we're now saying about a 10 bps drag year-over-year, and that's a 20 basis point increase over the original guide. So initially thought about minus 30. Now we're about minus 10. Again, recall, our sensitivity, we don't see the upside as much as we used to, but the benefit is we also don't see the downside. And then M&A, obviously, a big one with Frontier and the other, that's now going to be at sort of 770 bps up, so 7.7% coming from M&A. That's about 520 basis points higher than the original guide. And then FX with the meaningful change, that's now considered to be a 40 basis point drag, so minus 0.4% from FX, which is about 170% higher than the original guide. The original guide contemplated 1.36. And now we're doing the first half at whatever it was and now assuming the second half at 1.40. Patrick Brown: Yes. Okay. Perfect. Extremely helpful. The other thing that I think should maybe be highlighted here, unless I'm missing it, but the new guidance, I think, calls for margins to be virtually unchanged. But the old margins didn't include a very sizable headwind from fuel and call it, non-leveraging FX revenues. So could one imply that you are actually raising the underlying implied margins fairly substantially? Or am I misreading that? Luke Pelosi: No, Tyler, you're absolutely right. I mean if you think about the original guide, we were supposed to go to 30.5%, and that reflected 100 basis points of underlying at that time. And in that, we had our assumptions on fuel, commodity, all the externalities. When you look today, as you said, we're maintaining 30.5%, but now inclusive of a 60 to 70 basis point drag from fuel, a 30 to 40 basis point drag from M&A. I mean those 2 things alone is a 100 basis point drag above and beyond from where we started the year. Now there's other moving pieces, obviously. If you think about special waste and C&D landfill volumes, that's net new headwind. I don't want to get into every little piece, but that mix, I mean, if you think about those incremental tons that are missing, that's very high margin flow-through, right? And so if you look at that original 100 basis points underlying, I think you're probably 2x that today, notwithstanding that the headline numbers saying at 30.5%. And that's why I think I'll circle back to Patrick's comment. I mean, I don't think the operation of the business has ever been performing better, and you're seeing that sort of come through in the numbers. Patrick Brown: Yes, exactly. And then just real quickly, Patrick, last one on volume. How does the competitive environment feel? Have you seen any pickup in churn? Is there anything happening on the small hauler side that gives you any pause? Or is there any change in behavior there? Patrick Dovigi: I mean we're in a competitive business as always. And I think there's certain markets that have different competitive dynamics. And of course, there's markets where we have to fight and we have to defend our business and defend churn. But there's a lot of other parts of our business that continue to be strong on ticket, continue to get pricing and churn at sort of all-time lows. Nothing any different than what we've seen in the last 20 years. So I think we just keep chugging along, again, picking the right markets where we want to operate that allows us to continue deploying the strategy. And I think that's what you continue to see from us and you will continue to see from us. So nothing out of the ordinary from my perspective. Operator: The next question comes from the line of Kevin Chiang with CIBC. Kevin Chiang: If I could just dig into the U.S. organic growth in the second quarter. It was up nicely sequentially. And if I just look back outside of the elevated inflation period during the latter innings of the pandemic, I mean, this seems historical or looks historically high. I get pricing is good across the board, you have surcharges there, but are you hitting an inflection point in the U.S. in terms of some of the initiatives that you laid out at the Investor Day that might be driving maybe more outsized organic growth in the U.S. versus maybe what you see in Canada on a rate of change basis, just given Canada is a more mature market for you? Luke Pelosi: Yes. Thanks for the question, Kevin. It's a great one. I think -- if you think about overall organic growth, starting at price, I mean, the U.S. has consistently been a good pricing market for us and continues to be. And I think I said in the prepared remarks, it was both geographies around that sort of 6% level. I think the -- some of our books of business in the U.S. were probably more mature in some of the sort of surcharge initiatives. And so some of that outsized opportunity has been realized more in Canada, although there are net new geographies in the U.S. where that's also been an opportunity. But on balance, I'd say the U.S. pricing is more driven by just strength of underlying core as opposed to the sort of implementation of net new surcharges. I think it really comes down on the volume story. And if you think about what we and some of our industry peers have talked about is this is this idea of intentional shedding post M&A. And so if you look for the period that you're looking at, I mean, the levels of revenue acquired in the U.S. were quite significant from 2020 through 2024, 2025. And following that, you do have the intentional shedding. And again, it's unsafe work. It's work that doesn't meet your return hurdle. It is tangential type ancillary revenue service offerings that we're not going to continue to do. And so I think what's really happened is as the quantum of M&A sort of paused starting late '24 into '25, we had more quieter deployment of capital, you've no longer had the subsequent knock-on effect of that sort of shedding. And it's allowing, therefore, the volume metric to reflect just what's actually happening in the underlying business as opposed to being distorted. And I think it's a great data point and testament to the sort of quality of the market selection and the business that we have because once you remove the M&A-related noise, what you're left with is the normal course volume, which is going to be a plus or minus probably 50 bps type number and doesn't move around very much. Kevin Chiang: That's very helpful color. I mean just a follow-on, just looking at your -- you talked about operating leverage in your prepared remarks. If I look at kind of core cost as a percentage of revenue, you're back down to kind of a low 3% intensity. So maybe what you look like pre the ES spinout. Can you remind us where that can get to? Are you kind of at a level where you've kind of, I'll say, maximize the revenue absorption within that corp cost. So incremental top line growth requires a little bit more investment in corp? Or can you push that below 3%? Luke Pelosi: Yes, it's a great question, Kevin, and an area that we're very excited by because, I mean, again, -- that's a relatively fixed cost component that's derived primarily of sort of people and IT-related costs. Now when you think about the last 3 or 4 years, there was, as we articulated, a meaningful investment as we did a big large-scale lift and shift to cloud-based sort of systems, and we had dollars going through there that were transitory in nature. You've seen those sort of roll off, and now you're sort of left with a more sort of steady state dollars. Now in that unit, if you think about where things like AI is going to bring productivity enhancement, that we anticipate to be an area where that's realizable. But regular way back-end shared services, whether that's HR and payroll, whether that's treasury, whether that's the IT group, efficiencies that should be able to come from sort of more automation and processes should yield the ability of that existing cost structure to take on even larger amounts of revenue. So I don't think we're at a position here today to say exactly where that is going, but I certainly don't think 3% is a floor, and we see a path even pro forma going into next year getting below that level. But certainly, we believe that's going to be, as we've articulated, a meaningful source of operating leverage for the consolidated margin as that cost bucket remains relatively fixed, and we continue to grow revenue and/or EBITDA at materially higher growth rates. Operator: The next question comes from Tobey Sommer with Truist. Tobey Sommer: I wanted to ask a question about prospective M&A over the balance of the year. With the LBO news, is that influencing your conversations with businesses that you expect to be able to acquire over the balance of '26? Patrick Dovigi: No, no impact. I mean, we're running the business normal course. There's no change to sort of strategy or businesses that we're speaking to, and it's irrelevant whether we were -- whether it was private or public and we just continue marching on as if we're running the business as is in the normal course. Luke Pelosi: Tobey, I'd say just to add, Patrick, the one thing I'd say that's most impacting M&A is, again, just our absolute commitment to sort of the leverage philosophies that we sort of talked about. I mean, unfortunately, when the Canadian dollar depreciates as much as it does, it puts this sort of temporary translational impact on our leverage. And so we're 10 to 15 basis points higher than we otherwise would have been, which factors into the amount of capital you can deploy into M&A. So that, I would suggest, is more the sort of balancing act that we're doing. But to Patrick's point, in his initial comments that he made, we're running going full force running our business, whatever the sort of capital structure of the business will be, but it's not going to impact how we're thinking about growth. Tobey Sommer: If I could ask a follow-up on -- you mentioned the tight spread and attractive rates in your recent fixed income offering. What do you think is contributing to that? And how does that dovetail into the potential IRR of an LBO should that come to pass? Patrick Dovigi: Yes. I think -- listen, we've done exactly what we said we were going to do for over 13 years in that market, right? So we have a lot of goodwill in the market and always have and have always punched significantly above our weight on that side because we've always done what we said we're going to do, and we've continued to deliver. Now the beauty of the transaction we're talking about, there's not any material impact sort of on leverage of what's being proposed. So for our debt investors, there's no real risk that this is being treated as a traditional LBO in the sense where you're going to have 6-plus turns of leverage and material rating decreases. So I think we are fortunate from that perspective. But again, you look at the art of the possible. I mean, again, even if we did need more debt capital to affect the transaction, which that's not really being proposed in sort of any material way, that market has supported us with 6 to 6.5 turns of leverage for a long period of time, albeit at slightly higher rates, that's where it sort of stood. But again, that's not -- I wish sometimes our equity investors would understand the business as well as our debt investors, but this is life, and it takes time to sort of mature and understand. But that's not a market I worry about. And again, deep relationships for many, many years of doing the same thing sort of over and over again. Luke Pelosi: And Tobey, just to add to that, if you think the spread on that bond that we did was 134 basis points over the underlying treasury. Our investment-grade peers in the industry would be doing fixed income offerings at sort of 70 to 90 basis points over treasury. So you're looking there, I call it, a 40 to 50 basis point spread, and that's a pretax impact, right? So you roll that all through, and I've made this comment before, the benefit of becoming an investment-grade company is much less on the debt cost of capital. but rather on the perceived perception related to equity cost of capital. The debt markets are effectively already viewing us basically as an investment-grade credit, and we'll continue to march towards that direction. Operator: The next question comes from Trevor Romeo with William Blair. Trevor Romeo: Maybe I'll have another one on kind of M&A. I think, Patrick, you said that the Frontier integration has gone exceptionally well thus far. So maybe you could update us on how that transition is going? What kind of growth opportunities you've identified thus far for that business? And then I appreciate the comments about the leverage that Luke just made, but maybe you could talk a little bit about what types of assets might be in your kind of intermediate term pipeline there for M&A? Patrick Dovigi: Yes. So Frontier, that was well in hand. I mean we had a lot of time between sort of signing and closing on that. So I mean that -- the integration plan for that was well in hand before we hit the ground running day 1, effectively have that business transition over to our platform now. So there's been no -- interestingly enough, they ran a back-office software called Navisoft that we run as well. So the integration was very straightforward. Payroll has been sort of transitioned, health and benefits transitioned. So now looking at that business on our own KPI program. And in terms of new opportunities, similar to what we said on the last call, we have a plan to double the size of the business there over the next 5 years, and that's a combination of organic and inorganic opportunities. There'll be some smaller tuck-in sort of M&A, and then there's some organic opportunities, both on the sort of landfill, recycling, transportation side that we think are highly compelling that is going to sort of bolstering that. So that is sort of well in hand and on plan. No issues, no red flags, all green flags at the moment. So that will continue moving in the same direction. In terms of what the back half of the year look like from an M&A perspective, again, the big focus really is on tuck-in M&A that tucks into existing markets where we already have operating facilities, transfer stations, landfills, recycling facilities where we can internalize incremental volumes in those streams and leverage the fixed cost base facilities that we have. And that will make up the lion's share of the back half M&A. At the same time, the M&A team certainly continues to work on other opportunities for sort of ES and GIP. And both of those divisions are putting up sort of record numbers as well organically. I mean, ES had the best -- they had the best June ever recorded sort of in company's history on sort of a multitude of fronts. And the same goes for sort of GIP, had the best June they've ever had. So you have, basically, GFL, the public company, sort of firing on all cylinders. SECURE, again, posting the biggest and best numbers that they've reported in their history. And then our 2 sort of private businesses where we own the 40% stake and the 30% stake, putting up the best numbers that they've ever put up. So listen, we're feeling very good about sort of where we're sitting today. And I think there's definitely more opportunity than there are times. So we're just using our time wisely and finding the stuff that's going to -- and focusing our time on the stuff that's the most accretive to us as shareholders. Trevor Romeo: And then maybe a quick one for Luke. I think the updated guide, the free cash flow did have, I think, a little bit better conversion than your original guide. So maybe what's driving that? And then just looking beyond this year, I know you have SECURE that will come on at a higher conversion rate, but maybe would just love your latest thoughts on what kind of organic improvements in cash flow conversion you'd be looking for from here, especially as more of your RNG projects come online. Luke Pelosi: Yes, Trevor, great question. Thanks for that. For the current year guide on the free cash flow, obviously, the incremental EBITDA, you have the sort of flow-through of that. With the refinancing or recent financings of our debt, you've effectively taken a portion of interest expense that would have otherwise been associated with the growth and flatten that out. So that's going to roll over into next year. So you're maintaining that $445 million cash interest despite the higher sort of EBITDA. Working capital, you're getting a bit of a benefit from FX, right, just the way the math works and -- because we're in a net liability position, the higher level of FX, while it's a drag, the leverage, as we spoke about, you're getting a little bit of benefit there. But it's really just leveraging that fixed sort of other items of interest, taxes, et cetera, as we keep sort of growing EBITDA. And when you roll that forward into next year, you're absolutely right, pro forma with SECURE, you're going to see this inflection point, bringing that free cash flow conversion of adjusted free cash flow divided by adjusted EBITDA north of 40%. And really, with the incremental free cash flow profile, where the real benefit will come from is, yes, ongoing margin expansion all drops down to the free cash flow conversion line, but it's really being able to leverage a relatively now fixed component of interest as you're able to largely self-finance the growth from your own free cash flow and therefore, the eventual reduction of interest intensity in the free cash flow walk as we articulated at our Investor Day, is going to provide GFL a tailwind to free cash flow growth and conversion growth idiosyncratically because our other folks are already at that sort of lower leverage level. So too early to get into the moving pieces of '27, but certainly, there's going to be a meaningful step-up and an inflection point in all of those numbers, but particularly free cash flow. Operator: The next question comes from James Schumm with TD Cowen. James Schumm: Patrick, you've built the fourth largest solid waste company in North America, and you've done incredibly well financially. You've said that clearly, you're going to roll your stake. But can you just comment on maybe what you want to do in the future, maybe it's 5 or 10 years down the road? So specifically, like how much longer do you want to be the CEO of this company? Patrick Dovigi: As long as I continue to see opportunity, you're going to see me sort of sitting in the seat or if people tell me that it's time to leave. I mean, started over 20 years ago now. I don't think I have a better opportunity than anything I see to continue compounding my own wealth over sort of a long period of time. And again, from where I sit today, and I keep saying it, maybe I sound like a broken record. If you see the condition of the business that it's in today, the shape we're in, where the free cash flow is going for 2027, the opportunities we have going into 2027 and beyond, if I look at the next sort of 5 to 10 years, there is a real opportunity to double the size of this business again. And we have best-in-class operating systems, best-in-class management teams, what I call best-in-class markets. We have -- if you look at our 7 regions, all operating in similar sort of margin profiles in both Canada and the U.S. with a significant amount of opportunity. And by no means are we fully optimized in all these markets as well. So there's significant self-help opportunities in these markets to continue making the businesses better. So where I sit, listen, that's why I keep saying I'm not a seller. So the public markets will move around in terms of what they believe waste companies are valued at or where GFL should be valued at based on things that we've done. But again, sitting in the seat for over 20 years, creating billions of dollars of value for shareholders, I think we have a very sort of proven track record of a model that works. And again, whether that's publicly or privately, it can be done in both. The real question is, privately, can you just do things faster that you couldn't necessarily do in the public markets as quickly? And you're a dynamic management team like ourselves that likes to do things and create value over time. And we've done that, maybe sort of less popular things at times or people perceive to be less popular things at times. But I go back and I look at -- since being public, I look at -- we did a whole bunch of M&A in 2020 and 2021, increased leverage modestly, which, again, wasn't looked as favorably on. But when I go back at those, those are the right decisions to make for the business if you're a long-term shareholder. And you're putting together -- Terrapure together with our ES business in the middle of COVID and bringing up leverage 30 or 40 basis points, which, again, penalized from a bunch of investors at the time. We went out and put those 2 businesses together and sold that for almost 15x, right? So those are the right decisions. I think we know where -- how to create value. We know where to create value, and we do it in a very disciplined fashion that continues to sort of compound. And I think if you look at what's happened to the margin profile, the free cash flow profile of our business, the strategy continues to work. It's worked for 20 years, and it will continue to work for the next 20 years. So I'm here for the long run as long as people will have me. And again, I see a clear path to just materially increasing my own personal sort of equity value, and that's what we're focused on. James Schumm: Great. And as you contemplate -- you guys kind of contemplate these two options, private or public. Maybe you touched on this, but what do you think is driving the discount in your stock today? And how can you address it? So is it free cash flow conversion or some of the things that you laid out was that you're just going to create value. And over time, the market is going to realize that value? Or are you sitting there evaluating, okay, well, if we stay public, if we do X and Y, we can get a more appropriate valuation to our stock? Patrick Dovigi: Yes. I mean, listen, there's been -- I mean we've been public for almost 6 years now, right? And if you look at the math and sort of the dislocation in share price, there was 2 things. In 2022, levered growth became a very bad thing, and we were operating with higher leverage than all of our peers. And that was something that sort of had to be rectified, even though when you think about using an extra half a turn of leverage, again, I cite the example of the ES business. When we put ES together with Terrapure, buying that from a Canadian private equity firm at sort of 8 or 9x at the time and increasing leverage. I think at the time, it was like 30 or 40 basis points and certain investors sort of throwing tomatoes at us saying, why would you do such a thing? Now that created almost $4 billion of equity value for us as shareholders when we recap that business. So again, you're not always going to be popular by doing the things you need to do to sort of create value. The easiest thing to do is sit here and do nothing and just keep compounding and growing at the sort of normal growth algorithm. But that's not our DNA. That's not what we've done. That's not how we built this business. We would have never built the fourth largest environmental services business in North America if we just sat around figuring out all the reasons why not to do things. We generally find the reasons to do things that will work with the overall sort of strategy. So when you sit here today and look at the opportunities, I think this is a unique -- has been a unique period in time where you had the industry sell off around this AI trade. And then you had us our discount widening to the peer group, where we've always been sort of plus or minus a turn less or a turn more than the sort of peer group depending what was happening in the macro thematic theme. And in this environment, what happened is you basically industry traded down 2 to 2.5 turns because waste has been out of favor. And then you had us trade down 2.5 to 3 turns because we're out of favor. Maybe it was a secure transaction, maybe it was just our lack of sort of industry inclusion, but there was a sort of broader sell-off where nobody liked waste, and that sort of -- that creates the opportunity for other people to come in that have significant pockets of capital, and it doesn't happen often, right? So again, it happened in '22. It's happened -- so it's happened twice since we've been public. I always say math is math. We'll continue running the business, build the best business we can build. You'll continue seeing the margin expansion, continue to see us compound free cash flow, continue on the growth trajectory. And then eventually, math is math, the computers, you can't discount the math, right? And eventually, we get there. So -- but in the meantime, you have this dislocation in share price versus what the intrinsic value is versus what other people can generate with these assets and returns they can generate creates this opportunities for other. And again, from my perspective, I feel completely vindicated when the smartest investors in the world with the biggest pockets of capital, the largest financial institutions in the world come back and say, this doesn't make sense. This is the sort of opportunity that we have. And again, from my perspective, these are all the things we've been saying as a Board and as shareholders and management is why it makes sense. So listen, again, I'm focused on the upfront, but I'm also focused on what the path looks like in the future. If it leans towards, hey, we're going to re-IPO this, then we have a decision to make or I have a decision to make about whether that makes sense or not because I'm not sure how happy my public shareholders will be if I go out and take equity at sort of $50 a share and go that to $100 a share and then try and -- and then we're going to have to re-IPO that and they miss that big sort of lift for the big guys that have supported us. And we've had a lot of feedback from some of them. And a lot of them, stay the course and be patient. That being said, you have others sort of banging on the door that see this opportunity. So we're weighing both of them. We're doing the work. But what's for certain is the business is worth significantly more than it's trading for today. So that's what we all know and that's what the conclusion is, and we'll just keep driving forward. Luke Pelosi: And Jim, I'd just add to Patrick's comment that you mentioned free cash flow conversion, that when we first went public in 2020, there was a lot of focus on our EBITDA adjustments. They said, well -- and to be fair, it was complicated. It was a fast-growing business. The structure we went public with was complicated. That at the time was when people said, "Oh, you're getting this complexity discount because of EBITDA adjustments". In time, that subsided and just we grew into it as we said we did, like, hey, this is going to pass and no one ever has really sort of talked about that very much. Then '22, '23 comes along, all of a sudden with leverage, right? Folks are talking about leverage. And as Patrick just alluded to, that was a point in time. Today, yes, I get it with this quarter with translation impact step up, but largely folks aren't sort of talking about that sort of anymore. So free cash flow conversion, I guess you highlighted it because that's an area folks talk to. Okay. The free cash flow conversion is a little bit sort of lower than our industry peers. It is going to grow at a rate faster than our industry peers, full stop, right? And the math, as Patrick said, the math is math. It's very clear to see. It is going to go up from here. And I -- why I give that context and background is I've never heard your initial comment, why is the stock trading discount. I never heard people say it's because of our market selection, it's because of our business, because of any of those sort of fundamentals. It really seems to be about sort of transitory inflection point in the math. Free cash flow conversion, if that's the remaining sort of item, that is going to improve at a rate far greater than the industry average. And so you'll see that in the 2027 guide and then in '28 and beyond. So I think that is a source of the confidence that Patrick has in that it's going to work because you don't need to believe a lot to see the improvement in that one remaining metric. Operator: The next question comes from Bryan Burgmeier with Citigroup. Bryan Burgmeier: Just a couple of quick ones for me. First, you announced an update on a couple of RNG projects during the quarter. I assume those are kind of part of the 7 million MMBtus that were under negotiation during the 2025 Investor Day. Just curious if you can add any kind of details around the timing of those projects? Luke Pelosi: Yes. Thanks for the question, Bryan. Yes, those absolutely were included as part of our remaining sort of sites to come online. The expectation for all this was supposed to be late '27. I think with the pace at which things are moving, if there was some slippage into 2028, that wouldn't sort of surprise me. I think initially, Investor Day contemplated having that RNG price, which we called as now saying around $125 million in hand by 2028. I think it's probably more a run rate level by the end of 2028 as opposed to having it on Jan 1. But yes, those 2 projects with one of our existing partners that we have a great deal of confidence in is all part of the plan. Bryan Burgmeier: Got it. Got it. And then last one, and I'll go ahead and turn it over. Yes, I know the SECURE acquisition hasn't even closed yet, but maybe just from like a high level, do you think about SECURE maybe opening the door for a little more bolt-on M&A going forward. You've talked about organic kind of growth investments. Just curious about the inorganic side as well. Patrick Dovigi: Yes, nothing material, nothing sort of outside the norm in sort of Western Canada. I think there's the ability to -- with the continued investment that you're seeing in Western Canada, both from the federal government level and the provincial levels and just sort of the broader financial community that's creating incremental opportunity from some organic -- incremental organic opportunities that we'll assess -- any way we would assess sort of an M&A transaction or any sort of organic opportunity from sort of return on invested capital perspective. But there'll be a lot of sort of incremental opportunity as you see in the financial results that they put out. That business is firing on all cylinders, putting up sort of best-in-class numbers as well as the sort of biggest and best numbers that they put up in their sort of the company's history. So again, feeling really bullish about it in terms of the timing on the SECURE assets, again, as we said, targeting sort of October 1, plus or minus 30 days on that. But I think from where we sit today, we put in our final information request to the Competition Bureau in the last couple of days, and we'll just continue working that course. But we continue to see no issues in terms of any regulatory sort of hurdles there from -- at least from the seat that we sit in today. So everything is on track and moving in the direction that we all thought it would. Operator: The next question comes from Konark Gupta with Scotia Capital. Konark Gupta: My first question is to follow up on the prior discussion about the go private discussions you might be having. In light of those discussions, are you expecting to do some rationing on any of the usual initiatives like buybacks or dividend growth or even like M&A, including the SECURE deal? Patrick Dovigi: No. Business as usual, no change. . Konark Gupta: Okay. And then just on the ES and GIP minorities. Luke, if you can share your thoughts and outlook for '26 in terms of EBITDA and leverage ratio? Luke Pelosi: Yes, Konark. Thanks for the question. We've said previously, I mean, if you look at ES expectation that sort of $600 million with some M&A, maybe $625 million of EBITDA and we'll probably be in and around sort of 5.5 turns of leverage. On the GIP business, roughly $360 million to $380 million of EBITDA, and there'll be a sort of 4.5 turns leverage. In terms of the ES call option -- someone had e-mailed the question in, that initial valuation of that done in December 2025 was so close to the ES recapitalization. We just used the equity value at the recap at that time. As a result, you're now just going to have that call option, the sort of time decay value being amortized every sort of quarter until you sort of revalue the equity as a whole. And we're going to do that sort of annually. As Patrick said, the direction of travel of both of those businesses has never been better. And with some accretive strategic bolt-on M&A, there's some equity value creation coming out of those as well. So we would anticipate sort of revisiting both of the marks at year-end. Operator: The next question comes from Stephanie Moore with Jefferies. Stephanie Benjamin Moore: Just one for me. I think you called out that underlying margin is running maybe 2x your original expectations. So we'd love to get a little bit more color there on what's running better than you originally expected. Is it labor? I think we all see pricing is quite strong, but we'd love to get just a little bit more color there and then kind of your expectations on underlying margin expansion for the remainder of the year? Luke Pelosi: Yes. Great question, Stephanie. I'd say where we take a great deal of comfort is the fact that it's not any one thing, but it's all of the things that we've been talking about. You start at the top line, obviously, pricing 20 bps better or 50 bps better than guide for the year, 20 bps for the quarter. That all flows through down to bottom line. So that's the sort of starting point. Obviously, volume and the nature of the volume is a headwind versus the original plan because those landfill tons that are missing, although C&D is a small component of our business, it is sort of accretive. So that's a sort of headwind. When you look at the cost of sales bucket as a whole, the efficiency we continue to see across the major cost categories, whether that's transportation, whether it's labor is a function of both the optimization and densification of the business that we've done as well as the self-help initiatives that we sort of outlined. And it's all of those sort of pieces coming together when modeling for that, there's a pro forma of the way it's supposed to look, and you want to obviously bake in a degree of conservatism in that. And I think what we're very pleasantly surprised with is the rate at which we're actually being able to realize that. As a part of it is that synergy capture from post M&A, right? And as we've said, the business has initially come in at mid-20s. And then as you do rerouting, as you do integration, you get that up to an accretive margin. And it's all of that sort of coming through. And so we are very optimistic about our ability to hit the targets and exceed that we had previously sort of set out. And the prior caller had asked next year, when you think about RNG as being another meaningful incremental sort of margin tailwind, you're really not even sort of getting that sort of benefit yet, and when we put that all together, together with the SECURE business, we were incrementally optimistic as to what the ultimate sort of margin profile of the business can be because of the effectiveness we're seeing in these sort of self-help initiatives that we had laid out. Operator: The next question comes from Chris Murray with ATB Cormark Capital Markets. Chris Murray: Maybe turning back to that margin question and just maybe extending it into the 2027 or longer time frame. You sort of talked about the fact that I think it was a number of things, but you did talk about labor, you did talk about maintenance. Is this the best that it's going to get now we're just sort of moving into a being able to leverage the organization. You talked about densification, you talked about different things. But is there any additional opportunities on the self-help? Or are we kind of running to the end of those opportunities and now it's going to be just scale and leverage that you'll be able to drive margins off of? Luke Pelosi: Well, Chris, I think it's the opposite. I think we're just really getting started with the self-help. And Patrick sort of alluded to this. You got to remember, I mean, I think in that Investor Day presentation, we put 5 items. right? There's a team of people here working on 50 items or more at any given time, all of which could sort of be incremental and above. And then I think it's just the quantum of the items. I mean, I don't have the list in front of me, but I think like the procurement fleet-related bucket in that self-help was $30 million to $50 million. Like early days, just looking at SECURE, we're seeing sort of meaningful incremental procurement opportunities for them, just leveraging our existing plan, not to mention what we might be able to do when we go to market with now that broader sort of spend as a result of the size and scale. So I think the earliness of the maturation of this profile gives us a lot of optimism as to how much more incremental benefit there can be. And then you think about AI and/or sort of technology-related things that would be net new to the industry, we're just scratching the surface of that. So we take a great deal of comfort that we see a lot of runway pulling on the levers that the industry has already demonstrated to be highly effective and tried and true. And then as this sort of age of sort of technological enhancements is playing out so rapidly, undoubtedly, there's going to be meaningful incremental opportunity coming from that as well. So I would say we feel very well advanced and in hand in achieving the self-help that we set out. But I think the next time we come and do an Investor Day, we're going to have a whole host of incremental opportunities that will continue to be tailwind to outsized margin expansion above and beyond the normal course industry algorithm. Operator: The next question comes from Shlomo Rosenbaum with Stifel . Shlomo Rosenbaum: I actually want to expand a little bit on the last question and the comment that you made, Luke, about some of the incremental opportunities that are out there with AI and some of the technology. It seems like there's a playbook that you guys are implementing that others have already implemented that gives you kind of some runway. But some of the other ones that are in the industry have already pulled those levers are talking more about some of the dynamic routing that they could do with AI that they're working on, some of the dynamic pricing by customer. I was wondering if you could just kind of drill down, give us a little bit of insight as to, is that something that you guys are working on concurrently right now as well with what you're seeing? And are there other examples that we should be thinking about? Or is this a matter of like, hey, we have so much in front of us with the levers that others have pulled, we're primarily focused on those levers? Luke Pelosi: Yes, it's a great question, Shlomo. What I'd say is, and you articulate, we have a lot of opportunity low-hanging fruit right in front of us before having to sort of reinvent the wheel. And as you're seeing quarter after quarter, those are the opportunities we are sort of executing on and capturing. Now obviously, we are very invested and engaged in AI-related technologies as well. But I do think we have a unique advantage where we're allowing some others to experiment and find some of those benefits, and we don't necessarily need to be the early adopter as we have so many other opportunities in our sort of pipeline. Certainly, we're using AI in multiple facets of our business. But I'd say it is more in the early stages, and therefore, the financial benefits of that are not yet really flowing through in your margin. But from HR and recruiting, to pricing, to FP&A broader analysis, preventative maintenance, we have AI installations in all of these various sort of things, I'd say it's just sort of early days and where I take great comfort is if you extrapolate what the margin and cost savings implications of some of those applications could be, they're very large numbers. And so going back to the prior caller's comment, we're focusing on the sort of nuts and bolts of the self-help that we had articulated at Investor Day currently, while we are tangentially laying the groundwork for what will eventually be a much larger full-scale implementation of some of those AI automation initiatives. Shlomo Rosenbaum: Okay. And just as a follow-up, one of the themes we're just seeing in the earnings for solid waste is really higher pricing, and it seems like the first 3 companies have all talked about that. And then just the volumes just not being where people thought they were going to be for various reasons. And I don't know, Patrick, maybe you could talk a little bit. Is that just, hey, the macro we thought was going to get better. There's the Iran war that just kind of upset things and it's going on longer. Is there anything else going on? Just what's your take on what's going on with volumes? Patrick Dovigi: I mean nothing specific. Like we said in the bad market, volumes down 1%, good market volumes plus 1% like that's the range. I mean, again, C&D, special waste volumes are soft. They get higher interest rates for longer. I mean you're looking at homebuilders and other ones, like just things are slower. And I mean, we've been calling that out for the last sort of 12 to 18 months that we saw that perpetually getting slower. And I think on the C&D project, not necessarily felt at the same time because generally, those projects still have to finish and that volume sort of last to go and then last to come back as well. But there's nothing structurally any sort of issues in the market. And at the end of the day, we are pricing at the appropriate levels for the level of cost inflation that exists in the market. No one is charging egregious numbers or egregious pricing. It's just like we know what our internal cost inflation are, we know what headline price needs to be to sort of maintain that spread. And that's what you're seeing. And I think the industry -- that's the beauty of this industry is it's very disciplined and everyone is focused on the returns on invested capital, look at it in similar ways. And I think that's how people are pricing and the market is supporting that. And again, when you look at the average check size of our bills, on sort of a residential home, your average check size is sort of $25 to $40 a month. And if you're a commercial customer, average check size is $250 a month, whether that customer is taking 5% price, 4% price or 6% price, it's not a material amount in the grand scheme of things on a monthly basis. So I just -- I don't see any disruption coming from that side of the business either. Operator: The next question comes from Adam Bubes from Goldman Sachs. Adam Bubes: On the volume front, just a follow-up there. Are you able to parse out the performance this quarter between EPR-related volumes and underlying core volume growth? And then within the core volume growth, I think you did mention residential outperforming your expectations. So just any more color on volume performance by collection lines of business would be great. Luke Pelosi: Yes. Great questions. It's Luke here. So volume of 100 basis points better than planned, sort of negative 0.7% versus sort of negative 1.5% in and around there. It was supposed to be negative on a tough EPR comp, right? Last year's EPR ramped, we had some transitional volumes that we were sort of falling over. And then C&D softness obviously sort of persists and continues. As I said, the C&D and special waste tons were down sort of 10%, 11% year-over-year. And if you look at it in terms of actual dollars, volume was minus $11 million, right? And if you look at that, landfill was about $9 million of those dollars and MRF processing, which really relates to sort of transitional contract I signed was about sort of $2 million on that. So it's really suggesting all else is flat, right? Now there's puts and takes in that. IC&I collection was sort of slightly down as residential collection was sort of slightly up, sort of offsetting it. But it's really that sort of C&D ending up at the landfill as well as some of that lapping sort of EPR, that was really the majority of it. Within Canada, the positive volumes of Canada, some of that residential growth is EPR driven. So again, I think in terms of dollars, the Canadian segment was plus 0.5% up on volume growth, so positive volume growth. And in there was EPR. I think EPR had a smaller contribution of sort of $5 million to $7 million of that growth was EPR related and sort of EPR tangential really related to the collection contract side of EPR. But those are sort of the moving pieces. If you peel it all back, you really have the normal course business sort of being flat with some headwinds coming from those 2 items. Adam Bubes: Very helpful. And then it might be too early to talk 2027, but just conceptually, can you help us think about growth CapEx next year and the trajectory on the EPR and landfill gas side? Luke Pelosi: Yes. So I think a little early for the '27 guide. Just conceptually, what we had said is GFL's growth CapEx is going to step down materially again next year, and that's going to be more in the sort of $75 million or $100 million, I think is what we had said sort of half of this year's number. Now what I'd just sort of reserve comment for is SECURE's model has been to deploy excess capital into organic growth opportunities in their book of business. So we'll have to evaluate that in totality. But growth CapEx is going to come meaningfully down, as we said, '25 was the peak. '26 is sort of going to be half '25. Yes, there'll be some R&D dollars required in '26. Some of that manifests in the investment line as opposed to CapEx just by virtue of us actually making contributions into joint ventures. You will have some of that, but we'll have to get later in the year before we articulate. What I would just say is even inclusive of growth CapEx, the overall sort of free cash flow number is going to inflect meaningfully going into '27. Operator: The next question comes from Jake Kooyman from Wells Fargo. Jake Kooyman: I'm on for Jerry this morning. So corporate costs were roughly $62 million in the quarter, which is roughly $250 million annualized. And you pointed to intensity going below 3% pro forma next year. So on the roughly $9 billion of pro forma revenue, that implies corporate costs under $270 million, essentially flat to today while absorbing SECURE's head office and 2,000 employees. So does that mean you're essentially assuming SECURE's corporate functions are substantially eliminated? Or is that saving already inside the pro forma framework you published? Any comments on that would be helpful. Luke Pelosi: Thanks for the question. I haven't looked at the math in that degree of rigor. What I would just say conceptually is our corporate costs really represent the centralized head office functions that support all of our business and geographies. So when we do acquisitions, something like SECURE, the field level support for those acquisitions is actually burdened within our segments, right? So if you think about our reported U.S. and Canada segment, there's a meaningful amount of overhead costs in those buckets that doesn't actually sit in the sort of corporate offices. So SECURE will be similar. The vast majority of those sort of secure support costs are actually just going to be in the field as opposed to certainly in the corporate. I think the math suggesting -- I mean, Kevin just asked directionally, there's going to be more M&A into next year that you have to factor in as well. But I would think about your corporate cost bucket ex sort of step changes from sort of a large acquisition or something is going to grow at a low to mid-single-digit number, while our top line is growing at a mid- to high single-digit number. And that is the basis on which you're going to get operating leverage. I'm not prepared to sort of commit to the actual dollars of corporate cost in '27 where we sit today. Operator: There are no further questions. We have reached the end of the Q&A session. I will now turn the call back to Mr. Dovigi for closing remarks. Patrick Dovigi: Thank you, everyone, and we look forward to speaking with everyone after we report our Q3 results. Operator: This concludes today's call. Thank you for attending. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends GFL Environmental. The Motley Fool has a disclosure policy. GFL (GFL) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. GFL Environmental Inc (NYSE:GFL) raised its full-year guidance for the second time this year, now expecting over 15% growth in adjusted EBITDA and nearly 20% growth in adjusted free cash flow. Pricing growth remains strong at 6.1% in Q2, with full-year pricing expected to exceed 6%, driven by successful implementation of incremental fuel surcharges and disciplined pricing strategies. The Canadian segment achieved its highest-ever adjusted EBITDA margin of 34%, and consolidated underlying margins expanded by 125 basis points year-over-year, excluding exogenous factors and M&A. The company is making significant progress on the Secure acquisition, with integration planning on track and a target to close by the beginning of Q4, which could boost adjusted EBITDA growth to over 20%. Operational efficiency initiatives are yielding results, with cost of sales and SG&A intensity improving for the sixth consecutive quarter, driven by lower labor costs and a 90 basis point reduction in repair and maintenance cost intensity. The company successfully issued US$750 million in bonds at the tightest interest rate spread ever for its rating category, demonstrating strong credit market confidence and reducing its effective borrowing rate to approximately 4.5%. Elevated diesel prices have negatively impacted margins due to the inherent lag in the fuel surcharge mechanism, with direct diesel costs up nearly 60% year-over-year and an additional $5 million headwind from third-party transportation providers. Broader economic uncertainty continues to drag on C&D volumes, with external C&D and special waste landfill tons down 10% in the quarter, and this trend is expected to persist for the balance of the year. The company's full-year volume outlook has been revised to a decrease of approximately 50 basis points, reflecting continued softness in C&D activity and special waste volumes. Net leverage increased to 3.9 times at the end of Q2, 30 basis points higher than Q1, due to second-quarter acquisitions and the translational impact of a weaker Canadian dollar. The company has received unsolicited take-private offers, creating uncertainty and potential distraction, with management exploring strategic alternatives that could lead to a change in the company's public status. M&A activity is temporarily increasing leverage by 30 basis points, and the company faces headwinds from lower high-margin landfill volumes and a 40 basis point margin drag from prior-year rebate recognition. Warning! GuruFocus has detected 5 Warning Signs with GFL. Is GFL fairly valued? Test your thesis with our free DCF calculator. Q: Can you comment on the unsolicited potential take-private offers for GFL and how you're thinking about potential outcomes?A: Patrick Dovigi, Founder and CEO, confirmed the company received unsolicited approaches to take the company private at a price "materially higher" than the current trading price. He stated he is "not a seller" at current levels and would roll 100% of his equity into any new transaction. The board has formed a special committee to explore "the art of the possible." He outlined two paths: bringing an offer to shareholders or staying public. He emphasized that the parties interested in the deal also view the Secure acquisition favorably, and there is no scenario where they walk away from it. He noted the focus is on getting Secure closed while running these discussions in parallel. Q: Can you bridge the new full-year guidance versus the old guidance, given the moving pieces like FX, M&A, volumes, and commodities?A: Luke Pelosi, CFO, provided a detailed bridge. Pricing is now expected to be just above 6%, up 50 basis points from the original guide. Volume is now expected to be negative 50 basis points, a decrease from the original positive 25 basis points. Surcharge revenue is now expected to be a positive 80 basis points, up 100 basis points from the original guide due to diesel price changes. Commodity is now a 10 basis point drag, an improvement from the original 30 basis point drag. M&A contribution is now 7.7%, up 520 basis points from the original guide, primarily due to Frontier. FX is now a 40 basis point drag, which is 170 basis points higher than the original guide, which had assumed a rate of 1.36. Q: The new guidance calls for margins to be virtually unchanged, but the old margins didn't include the sizable headwind from fuel. Does this imply you are actually raising the underlying implied margins substantially?A: Luke Pelosi, CFO, confirmed this interpretation. The original guide reflected 100 basis points of underlying margin expansion. The new guide maintains the 30.5% margin but now includes a 60-70 basis point drag from fuel and a 30-40 basis point drag from M&A, which together are a 100 basis point drag above the original starting point. He added that the missing high-margin C&D landfill volumes are a net new headwind. He stated the underlying margin expansion is likely "2X" the original 100 basis points, highlighting that the operational performance of the business has never been better. Q: What is driving the strong pricing commentary, and do you think it can continue into 2027?A: Luke Pelosi, CFO, stated the company's strategy is to price above cost inflation to generate a return on invested capital. He noted there are still "mispriced books of business" within the portfolio that offer incremental pricing opportunities beyond the standard inflation spread. He reiterated the $40 million to $80 million of incremental price opportunities identified at Investor Day, noting the actual prize is likely greater. He expressed confidence that the company will capture more than the three-year outlook originally provided at Investor Day. Q: How is the Frontier integration going, and what growth opportunities have you identified for that business?A: Patrick Dovigi, Founder and CEO, stated the integration has gone "exceptionally well" because the integration plan was well-prepared before closing. He noted Frontier uses the same back-office software (Navisoft) as GFL, making the transition straightforward. The company has a plan to double the size of the business in the Texas market over the next five years through a combination of organic growth and smaller tuck-in M&A opportunities in landfill, recycling, and transportation. Q: What is driving the improvement in free cash flow conversion, and what should we expect looking forward?A: Luke Pelosi, CFO, explained that the current year's free cash flow benefits from incremental EBITDA flowing through, while recent refinancing has flattened out a portion of interest expense. Working capital also benefits from FX due to the company's net liability position. Looking ahead, he stated that pro forma for Secure, the free cash flow conversion (adjusted free cash flow divided by adjusted EBITDA) will inflect north of 40%. The key driver will be leveraging a relatively fixed interest component while self-financing growth, which will be an idiosyncratic tailwind to free cash flow growth. Q: How much longer do you want to be the CEO of this company?A: Patrick Dovigi, Founder and CEO, stated he will remain as long as he sees opportunity and people want him. He emphasized he sees a clear path to double the size of the business again over the next 5-10 years, citing best-in-class operating systems, management teams, and market positions. He reiterated he is "not a seller" and believes the company's proven track record of creating value can continue whether it is public or private, but noted that being private could allow the team to execute faster. Q: What do you think is driving the discount in your stock today, and how can you address it?A: Patrick Dovigi, Founder and CEO, attributed the discount to a broader industry sell-off related to the "AI trade" and a widening discount to peers. He noted the company has traded at a discount during transitory periods, such as the 2022 leverage concerns. He feels vindicated that large institutional investors see the value and can generate mid-teens to 20% IRRs. Luke Pelosi, CFO, added that the remaining concern is free cash flow conversion, which is lower than peers but is set to grow at a faster rate. He believes this metric will improve significantly, and "the math is math," which will eventually close the valuation gap. Q: Can you provide more color on what is running better than expected on underlying margins, and what are your expectations for the remainder of the year?A: Luke Pelosi, CFO, stated the outperformance is not from any single item but from the combination of all self-help initiatives. Pricing is a starting point, flowing directly to the bottom line. Cost efficiencies in transportation and labor are being driven by optimization, densification, and self-help initiatives. He noted the company is pleasantly surprised by the rate of realization of these synergies, particularly from post-M&A integration. He added that RNG projects, which are not yet contributing, will be a meaningful incremental margin tailwind next year. Q: Are you seeing any impact on M&A conversations or your For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in GFL Environmental Inc.? Here are five stocks we like better. GFL raised its 2026 outlook for the second time, now targeting C$7.52 billion in revenue, C$2.29 billion in adjusted EBITDA and C$900 million in adjusted free cash flow, supported by pricing, acquisitions and efficiency gains. Second-quarter revenue rose 16.3%, with 6.4% organic growth and 6.1% pricing gains. Margin expansion continued despite diesel-cost pressure, although construction and demolition volumes fell 10% and full-year volume expectations were reduced to a roughly 0.5% decline. The company closed seven acquisitions and expects to deploy another C$300 million to C$500 million before year-end, while its board reviews unsolicited potential take-private offers through a special committee; GFL says it will continue pursuing the pending SECURE acquisition. These 3 Little-Known Stocks Are Analyst Favorites GFL Environmental (NYSE:GFL) raised its full-year 2026 outlook for the second time after reporting second-quarter results that management said exceeded expectations, supported by pricing gains, acquisition activity and operating efficiencies despite softer construction and demolition volumes and elevated diesel costs. Founder and CEO Patrick Dovigi said the company’s first-half performance demonstrated the resilience of its business model amid a mixed macroeconomic environment. “Our strong start to the year continued through the second quarter, yielding financial results ahead of expectations,” Dovigi said. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Second-quarter revenue increased 16.3% from the prior year, including 6.4% organic growth, Chief Financial Officer Luke Pelosi said. Organic growth accelerated by 180 basis points from the first quarter as pricing and fuel-related surcharge revenue more than offset volume and commodity-related pressures. GFL reported price growth of 6.1% in the quarter, exceeding its plan by 20 basis points. Pricing increased 6.2% in Canada and 6.1% in the U.S. Pelosi said the company now expects full-year pricing to finish above 6%, nearly 50 basis points ahead of its original forecast. → Microsoft Just Flipped the AI Spending Narrative Overnight The company attributed the outperformance partly to the continued realization of previously identified pricing opportunities, including additional fuel surcharges. Management said it expects to continue pursuing pricing above cost inflation in order to maintain returns on invested capital. Volume trends were better than anticipated in the quarter, though certain categories remained weak. Transfer-station and residential-collection volumes benefited from a recovery following winter weather disruptions in the first quarter and from extended producer responsibility, or EPR, activity. However, external construction and demolition and special-waste landfill tons declined 10% year over year. → Carrier Earnings Could Send the Stock to a New All-Time High Pelosi said the company expects those construction-related trends to persist for the remainder of the year, leading GFL to update its full-year volume outlook to a decline of about 50 basis points. Management said any recovery in construction and demolition activity would provide upside to its outlook. Commodity pricing provided a modest offset. Market prices in the second quarter were about C$12 per ton higher than GFL had included in its quarterly forecast, Pelosi said. If current pricing levels persist, third-quarter commodity pricing would be approximately 20% above the prior year, he added. Adjusted EBITDA margin was 30.4% in the second quarter, including a 65-basis-point drag from acquisitions. The Canadian segment posted a 34% adjusted EBITDA margin, its highest level to date, according to Dovigi. GFL said operating and selling, general and administrative cost intensity improved excluding the effect of elevated fuel prices. Cost of sales as a percentage of revenue declined 80 basis points excluding fuel effects, while SG&A cost intensity improved 50 basis points. Diesel costs remained a significant headwind. GFL’s direct cost per unit of diesel increased nearly 60% year over year in the quarter, while third-party transportation providers’ fuel surcharges created a C$5 million headwind to its second-quarter guidance. Pelosi said the company’s surcharge revenue is now sufficient to offset higher ongoing fuel costs, but results remain affected by costs incurred during the initial surge in diesel prices before surcharge mechanisms caught up. Excluding fuel, commodity and acquisition effects, GFL said underlying consolidated second-quarter margin increased 125 basis points from a year earlier. Management cited pricing, labor improvements, lower repair and maintenance cost intensity, route optimization, acquisition integration and other self-help initiatives. GFL now forecasts for 2026: Revenue of C$7.52 billion; Adjusted EBITDA of C$2.29 billion; Adjusted free cash flow of C$900 million; Cash interest expense of C$445 million; and Net capital expenditures of C$850 million. The company’s revised forecast calls for a 30.5% adjusted EBITDA margin, 10 basis points above its previous outlook. Pelosi said that, without elevated diesel prices, full-year margin would be above 31%, representing more than 100 basis points of expansion from the prior year despite acquisition and commodity headwinds. GFL expects third-quarter revenue of approximately C$1.99 billion, adjusted EBITDA margin of 31.2% and adjusted free cash flow of about C$235 million. The company closed seven acquisitions during the quarter, including Frontier Waste Solutions and six tuck-in deals. Dovigi said Frontier’s initial performance under GFL ownership had been “exceptionally” strong, with the company targeting a doubling of that Texas business over five years through organic and inorganic growth. GFL continues to expect C$300 million to C$500 million of additional acquisition deployment before year-end. Its updated guidance does not include contributions from the pending acquisition of SECURE, which management expects to close around the beginning of the fourth quarter following a Competition Bureau review. Dovigi said SECURE could lift 2026 adjusted EBITDA growth above 20% if the transaction closes in the fourth quarter. During the question-and-answer session, Dovigi confirmed that GFL had received unsolicited potential take-private approaches. He said the board has formed a special committee and instructed management to explore potential alternatives. Dovigi said he would roll all of his equity into any proposed transaction and emphasized that he is not seeking to exit the business. He said the company could remain public or potentially pursue a transaction, depending on what the special committee determines is in shareholders’ interests. “Either path is a good path,” Dovigi said, adding that GFL would continue to operate normally and pursue the SECURE acquisition in parallel. He said the company does not plan to alter its ordinary-course strategy, including M&A activity, because of the review. GFL Environmental Inc is a leading North American provider of diversified environmental services, offering comprehensive solutions across solid waste management, liquid waste management, soil remediation and infrastructure services. The company's core business activities include residential, commercial and industrial waste collection, recycling, composting and landfill management. In addition to traditional waste services, GFL provides specialized liquid waste hauling, treatment and disposal services as well as environmental consulting to support industrial and municipal clients in meeting regulatory and sustainability goals. Founded in 2007 by entrepreneur Patrick Dovigi, GFL Environmental has pursued an aggressive growth strategy driven by strategic acquisitions and organic expansion. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "GFL Environmental Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

GFL Environmental Inc. (GFL) came out with quarterly earnings of $0.14 per share, missing the Zacks Consensus Estimate of $0.17 per share. This compares to earnings of $0.19 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -17.65%. A quarter ago, it was expected that this company would post earnings of $0.05 per share when it actually produced earnings of $0.06, delivering a surprise of +20%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. GFL Environmental, which belongs to the Zacks Waste Removal Services industry, posted revenues of $1.41 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.28%. This compares to year-ago revenues of $1.21 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. GFL Environmental shares have lost about 8.9% since the beginning of the year versus the S&P 500's gain of 8.5%. While GFL Environmental has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for GFL Environmental was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.20 on $1.39 billion in revenues for the coming quarter and $0.56 on $5.32 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Waste Removal Services is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Select Water Solutions, Inc. (WTTR), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This company is expected to post quarterly earnings of $0.11 per share in its upcoming report, which represents a year-over-year change of +10%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Select Water Solutions, Inc.'s revenues are expected to be $365.9 million, up 0.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GFL Environmental Inc. (GFL) : Free Stock Analysis Report Select Water Solutions, Inc. (WTTR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Revenue, Adjusted EBITDA1 and Adjusted Free Cash Flow1 all ahead of expectations Underlying Adjusted EBITDA margin1 expansion of 125 basis points, excluding the impacts of M&A, commodities and diesel prices 6.4% organic revenue growth, accelerating sequentially by 180 basis points Adjusted EBITDA1 of $591.2 million, increase of 14.8%; Adjusted Net Income from continuing operations1 of $67.8 million; Net loss from continuing operations of $162.6 million Year-to-date completed acquisitions generating approximately $435.0 million to $460.0 million in annualized revenue Raised full year 2026 guidance for the second time this year; now expecting mid-to-high teens growth across key financial metrics before considering significant likely upside from SECURE MIAMI BEACH, FL, July 29, 2026 /CNW/ -- GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) ("GFL", "we", "our", or the "Company") today announced its results for the second quarter of 2026. "Our exceptional start to the year continued into the second quarter, driven by the hard work and commitment of our over 15,000 employees," said Patrick Dovigi, Founder and Chief Executive Officer of GFL. "We again delivered industry-leading top-line growth of 16.3%, including 6.1% from core pricing. The consistency of our execution across multiple quarters, even against a backdrop of macroeconomic uncertainty, reflects the durability of our platform and the discipline of our team. Given the continued strength in our base business, we are once again raising our full-year guidance. Our organic growth trends, pricing discipline, and the contribution from acquisitions completed to date give us confidence in the increased outlook, and we remain well positioned to build on this momentum through the balance of the year." Mr. Dovigi continued, "On our proposed acquisition of SECURE Waste, SECURE shareholders approved the transaction in May and the transaction is now progressing through regulatory review. We are still targeting closing for the latter part of 2026. We continue to believe that the acquisition of SECURE will create significant long-term value for both GFL and SECURE shareholders as we meaningfully accelerate the multi-year financial targets outlined at our 2025 Investor Day. We look forward to providing an updated outlook as we approach closing later this year." Mr. Dovigi concluded, "We have recently received unsolicited preliminary expressions of interest from multiple parties to take the company private, as is often the case when there is a valuation disconnect. The Board has formed a special committee of independent directors to oversee any discussions that might ensue. There can be no guarantee that any expressions of interest will result in a transaction." Second Quarter Results Revenue of $1,947.8 million in the second quarter of 2026, an increase of 16.3%, including 6.1% from core pricing. Adjusted EBITDA1 increased by 14.8% to $591.2 million in the second quarter of 2026, compared to $515.1 million in the second quarter of 2025. Adjusted EBITDA margin1 was 30.4% in the second quarter of 2026, compared to 30.7% in the second quarter of 2025, reflecting 125 basis points of underlying margin expansion when excluding the impacts of M&A, commodities and diesel prices. Net loss from continuing operations was $162.6 million in the second quarter of 2026, compared to net income from continuing operations of $259.7 million in the second quarter of 2025. Adjusted Free Cash Flow1 was $236.7 million in the second quarter of 2026, compared to $137.1 million in the second quarter of 2025. During the second quarter of 2026, we repurchased 300,000 subordinate voting shares under our normal course issuer bid. We intend to continue to be opportunistic on further share repurchases going forward. Year to Date Results Revenue of $3,591.6 million for the six months ended June 30, 2026, an increase of 11.0%, including 6.5% from core pricing. Adjusted EBITDA1 increased by 13.7% to $1,069.7 million for the six months ended June 30, 2026, compared to $941.2 million for the six months ended June 30, 2025. Adjusted EBITDA margin1 was 29.8% for the six months ended June 30, 2026, compared to 29.1% for the six months ended June 30, 2025. Net loss from continuing operations was $381.8 million for the six months ended June 30, 2026, compared to net income from continuing operations of $33.1 million for the six months ended June 30, 2025. Adjusted Free Cash Flow1 was $212.4 million for the six months ended June 30, 2026, compared to $150.8 million for the six months ended June 30, 2025. Updated Full Year 2026 Guidance2 GFL also provided its updated guidance for 2026 assuming a USD/CAD exchange rate of 1.40 for the remainder of the year (compared to 1.36 provided in our original guidance on February 11, 2026). Revenue is estimated to be approximately $7,510 million to $7,530 million, compared to the prior guidance of approximately $7,320 million to $7,340 million. Adjusted EBITDA2 is estimated to be approximately $2,290 million, compared to the prior guidance of approximately $2,230 million. Adjusted Free Cash Flow2 is estimated to be approximately $900 million, compared to the prior guidance of approximately $850 million. Net Leverage2 is estimated to be in the mid 3s by the end of 2026. The 2026 updated guidance includes the expected contribution of acquisitions completed as of July 1, 2026, net of divestitures completed to date, but excludes any impact from acquisitions not yet completed. Implicit in forward-looking information in respect of our expectations for 2026 are certain current assumptions, including, among others, no changes to the current economic environment, including fuel and commodities. The 2026 updated guidance assumes GFL will continue to execute on our strategy of organically growing our business, leveraging our scalable network to attract and retain customers across multiple service lines, realizing operational efficiencies and extracting procurement and cost synergies. See "Forward-Looking Information". Q2 2026 Earnings Call GFL will host a conference call related to our second quarter earnings on July 30, 2026 at 8:30 am Eastern Time. A live audio webcast of the conference call can be accessed by logging onto our Investors page at investors.gflenv.com or by clicking here. Listeners may access the call toll-free by dialing 1-833-769-6440 in Canada or 1-833-461-5787 in the United States (meeting ID: 884 908 323) approximately 15 minutes prior to the scheduled start time. We encourage participants who will be dialing in to pre-register for the conference call using the following link: https://events.q4inc.com/analyst/884908323?pwd=PWAeME8n. Callers who pre-register will be given a conference access code and PIN to gain immediate access to the call and bypass the live operator on the day of the call. Participants may pre-register at any time, including up to and after the call start time. For those unable to listen live, an audio replay of the call will be available by using the following link: https://events.q4inc.com/attendee/884908323. About GFL GFL is the fourth largest diversified environmental services company in North America, providing comprehensive solid waste management services from its platform of facilities throughout Canada and 18 U.S. states. GFL has a workforce of more than 15,500 employees across its organization. For more information, visit the GFL web site at gflenv.com. To subscribe for investor email alerts please visit investors.gflenv.com or click here. Forward-Looking Information This release includes certain "forward-looking statements" and "forward-looking information" (collectively, "forward-looking information") within the meaning of applicable U.S. and Canadian securities laws, respectively. Forward-looking information includes all statements that do not relate solely to historical or current facts and may relate to our future outlook, financial guidance and anticipated events or results and may include statements regarding our financial performance, financial condition or results, business strategy, growth strategies, budgets, operations and services. Particularly, statements regarding our expectations of future results, performance, achievements, prospects or opportunities, the markets in which we operate or potential share repurchases are forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "budget", "scheduled", "estimates", "outlook", "forecasts", "projection", "prospects", "strategy", "intends", "anticipates", "does not anticipate", "believes", or "potential" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved", although not all forward-looking information includes those words or phrases. In addition, any statements that refer to expectations, intentions, projections, guidance, potential or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts nor assurances of future performance but instead represent management's expectations, estimates and projections regarding future events or circumstances. Forward-looking information is based on our opinions, estimates and assumptions that we considered appropriate and reasonable as of the date such information is stated, is subject to known and unknown risks, uncertainties, assumptions and other important factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to certain assumptions set out herein in the section titled "Updated Full Year 2026 Guidance"; our ability to obtain and maintain existing financing on acceptable terms; our ability to source and execute on acquisitions on terms acceptable to us; currency exchange and interest rates; commodity price fluctuations; our ability to implement price increases and surcharges; changes in waste volumes; labour, supply chain and transportation constraints; inflationary cost pressures; fuel supply and fuel price fluctuations; our ability to maintain a favourable working capital position; the impact of competition; the changes and trends in our industry or the global economy; changes to trade agreements, restrictions on trade, including sanctions, export controls, import duties, quotas, treaties, tariffs, trade wars, changes to trade and investment policies and other governmental actions; and changes in laws, rules, regulations, and global standards. Other important factors that could materially affect our forward-looking information can be found in the "Risk Factors" section of GFL's annual information form for the year ended December 31, 2025 and GFL's other periodic filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. Shareholders, potential investors and other readers are urged to consider these risks carefully in evaluating our forward-looking information and are cautioned not to place undue reliance on such information. There can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors not currently known to us or that we currently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. The forward-looking information contained in this release represents our expectations as of the date of this release (or as the date it is otherwise stated to be made), and is subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable U.S. or Canadian securities laws. The purpose of disclosing our financial outlook set out in this release is to provide investors with more information concerning the financial impact of our business initiatives and growth strategies. While the Company has and may from time to time in the future receive expressions of interest in relation to possible material transactions, there can be no assurance that any such expression of interest will result in an agreement to pursue any such transaction or, if any such agreements are entered into that the transactions contemplated thereby will be completed and if so on what terms and conditions; and the Company undertakes no responsibility to make any public statements or to update any prior public statements with respect thereto except as may be required by applicable law. Non-IFRS Measures This release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Rather, these non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. EBITDA represents, for the applicable period, net income (loss) from continuing operations plus (a) interest and other finance costs, plus (b) depreciation and amortization of property and equipment, landfill assets and intangible assets, plus (less) (c) the provision (recovery) for income taxes, in each case to the extent deducted or added to/from net income (loss) from continuing operations. We present EBITDA to assist readers in understanding the mathematical development of Adjusted EBITDA. Management does not use EBITDA as a financial performance metric. Adjusted EBITDA is a supplemental measure used by management and other users of our financial statements including, our lenders and investors, to assess the financial performance of our business without regard to financing methods or capital structure. Adjusted EBITDA is also a key metric that management uses prior to execution of any strategic investing or financing opportunity. For example, management uses Adjusted EBITDA as a measure in determining the value of acquisitions, expansion opportunities, and dispositions. In addition, Adjusted EBITDA is utilized by financial institutions to measure borrowing capacity. Adjusted EBITDA is calculated by adding and deducting, as applicable from EBITDA, certain expenses, costs, charges or benefits incurred in such period which in management's view are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including: (a) (gain) loss on foreign exchange, (b) (gain) loss on sale of property and equipment, (c) change in value on Call Option, (d) share of net (income) loss of investments accounted for using the equity method, (e) share-based payments, (f) transaction costs, (g) acquisition, rebranding and other integration costs (included in cost of sales related to acquisition activity), (h) Founder/CEO remuneration and (i) other. For the three and six months ended June 30, 2026, change in value on Call Option has been added back to EBITDA. We use Adjusted EBITDA to facilitate a comparison of our operating performance on a consistent basis reflecting factors and trends affecting our business. As we continue to grow our business, we may be faced with new events or circumstances that are not indicative of our underlying business performance or that impact the ability to assess our operating performance. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue. Management and other users of our financial statements including our lenders and investors use Adjusted EBITDA margin to facilitate a comparison of the operating performance of each of our operating segments on a consistent basis reflecting factors and trends affecting our business. Acquisition EBITDA represents, for the applicable period, management's estimates of the annual Adjusted EBITDA of an acquired business, based on its most recently available historical financial information at the time of acquisition, as adjusted to give effect to (a) the elimination of expenses related to the prior owners and certain other costs and expenses that are not indicative of the underlying business performance, if any, as if such business had been acquired on the first day of such period and (b) contract and acquisition annualization for contracts entered into and acquisitions completed by such acquired business prior to our acquisition (collectively, "Acquisition EBITDA Adjustments"). Further adjustments are made to such annual Adjusted EBITDA to reflect estimated operating cost savings and synergies, if any, anticipated to be realized upon acquisition and integration of the business into our operations. Acquisition EBITDA is calculated net of divestitures. We use Acquisition EBITDA for the acquired businesses to adjust our Adjusted EBITDA to include a proportional amount of the Acquisition EBITDA of the acquired businesses based upon the respective number of months of operation for such period prior to the date of our acquisition of each such business. Adjusted Cash Flows from Operating Activities represents cash flows from operating activities adjusted for (a) operating cash flows from discontinued operations, (b) transaction costs, (c) acquisition, rebranding and other integration costs, (d) Founder/CEO remuneration, (e) cash payments related to GFL Environmental Services transition services agreement, (f) cash interest paid on early termination of long-term debt, (g) distribution received from joint ventures and (h) other. Adjusted Cash Flows from Operating Activities is a supplemental measure used by investors as a valuation and liquidity measure in our industry. For the three and six months ended June 30, 2026, cash payments related to GFL Environmental Services transition services agreement and other have been added back to Adjusted Cash Flows from Operating Activities. These amounts were not paid in the prior period. Adjusted Cash Flows from Operating Activities is a supplemental measure used by management to evaluate and monitor liquidity and the ongoing financial performance of GFL. Adjusted Free Cash Flow represents Adjusted Cash Flows from Operating Activities adjusted for (a) proceeds on disposal of assets and other, (b) purchase of property and equipment and (c) incremental growth investments. Adjusted Free Cash Flow is a supplemental measure used by investors as a valuation and liquidity measure in our industry. Adjusted Free Cash Flow is a supplemental measure used by management to evaluate and monitor liquidity and the ongoing financial performance of GFL. Adjusted Net Income (Loss) from continuing operations represents net income (loss) from continuing operations adjusted for (a) amortization of intangible assets, (b) amortization of deferred financing costs, (c) (gain) loss on foreign exchange, (d) change in value on Call Option, (e) share of net (income) loss of investments accounted for using the equity method, (f) loss on termination of hedged arrangements, (g) transaction costs, (h) acquisition, rebranding and other integration costs, (i) Founder/CEO remuneration, (j) other and (k) the tax impact of the foregoing. Adjusted income (loss) per share from continuing operations is defined as Adjusted Net Income (Loss) from continuing operations divided by the weighted average shares in the period. For the three and six months ended June 30, 2026, change in value on Call Option has been added back to net income (loss) from continuing operations. We believe that Adjusted income (loss) per share from continuing operations provides a meaningful comparison of current results to prior periods' results by excluding items that GFL does not believe reflect its fundamental business performance. Net Leverage is a supplemental measure used by management to evaluate borrowing capacity and capital allocation strategies. Net Leverage is equal to our total long-term debt, as adjusted for fair value, deferred financings and other adjustments and reduced by our cash, divided by Run-Rate EBITDA. Run-Rate EBITDA represents Adjusted EBITDA for the applicable period as adjusted to give effect to management's estimates of (a) Acquisition EBITDA Adjustments (as defined above) and (b) the impact of annualization of certain new municipal and disposal contracts and cost savings initiatives, entered into, commenced or implemented, as applicable, in such period, as if such contracts or costs savings initiatives had been entered into, commenced or implemented, as applicable, on the first day of such period ((a) and (b), collectively, "Run-Rate EBITDA Adjustments"). Run-Rate EBITDA has not been adjusted to take into account the impact of the cancellation of contracts and cost increases associated with these contracts. These adjustments reflect monthly allocations of Acquisition EBITDA for the acquired businesses based on straight line proration. As a result, these estimates do not take into account the seasonality of a particular acquired business. While we do not believe the seasonality of any one acquired business is material when aggregated with other acquired businesses, the estimates may result in a higher or lower adjustment to our Run-Rate EBITDA than would have resulted had we adjusted for the actual results of each of the acquired businesses for the period prior to our acquisition. We primarily use Run-Rate EBITDA to show how GFL would have performed if each of the acquired businesses had been consummated at the start of the period as well as to show the impact of the annualization of certain new municipal and disposal contracts and cost savings initiatives. We also believe that Run-Rate EBITDA is useful to investors and creditors to monitor and evaluate our borrowing capacity and compliance with certain of our debt covenants. Run-Rate EBITDA as presented herein is calculated in accordance with the terms of our revolving credit agreement. All references to "$" in this press release are to Canadian dollars, unless otherwise noted. For further information:Patrick Dovigi, Founder and Chief Executive Officer+1 [email protected] GFL Environmental Inc.Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (In millions of dollars except per share amounts) GFL Environmental Inc.Unaudited Interim Condensed Consolidated Statements of Financial Position (In millions of dollars) GFL Environmental Inc.Unaudited Interim Condensed Consolidated Statements of Cash Flows (In millions of dollars) SUPPLEMENTAL DATA You should read the following information in conjunction with our audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025, as well as our Unaudited Interim Financial Statements and notes thereto for the three and six months ended June 30, 2026. Revenue Growth The following tables summarize the revenue growth in our segments for the periods indicated: Detail of Organic Growth The following table summarizes the components of our organic growth for the periods indicated: Operating Segment Results The following tables summarize our operating segment results for the periods indicated: Net Leverage The following table presents the calculation of Net Leverage as at the dates indicated: Shares Outstanding The following table presents the total shares outstanding as at the date indicated: NON-IFRS RECONCILIATION SCHEDULE Adjusted EBITDA The following tables provide a reconciliation of our net (loss) income from continuing operations to EBITDA and Adjusted EBITDA for the periods indicated: Adjusted Net Income from Continuing Operations The following tables provide a reconciliation of our net (loss) income from continuing operations to Adjusted Net Income from continuing operations for the periods indicated: Adjusted Cash Flows from Operating Activities and Adjusted Free Cash Flow The following tables provide a reconciliation of our cash flows from operating activities to Adjusted Cash Flows from Operating Activities and Adjusted Free Cash Flow for the periods indicated: View original content to download multimedia:https://www.prnewswire.com/news-releases/gfl-environmental-reports-second-quarter-2026-results-and-raises-full-year-2026-guidance-302838259.html View original content to download multimedia: http://www.newswire.ca/en/releases/archive/July2026/29/c6385.html

The market expects GFL Environmental Inc. (GFL) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 29. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This company is expected to post quarterly earnings of $0.17 per share in its upcoming report, which represents a year-over-year change of -10.5%. Revenues are expected to be $1.38 billion, up 13.6% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 5.15% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For GFL Environmental, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -45.78%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that GFL Environmental will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that GFL Environmental would post earnings of $0.05 per share when it actually produced earnings of $0.06, delivering a surprise of +20.00%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. GFL Environmental doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Veralto (VLTO), another stock in the Zacks Waste Removal Services industry, is expected to report earnings per share of $1 for the quarter ended June 2026. This estimate points to a year-over-year change of +7.5%. Revenues for the quarter are expected to be $1.44 billion, up 4.9% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Veralto has been revised 0.2% up to the current level. Nevertheless, the company now has an Earnings ESP of +0.77%, reflecting a higher Most Accurate Estimate. This Earnings ESP, combined with its Zacks Rank #3 (Hold), suggests that Veralto will most likely beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GFL Environmental Inc. (GFL) : Free Stock Analysis Report Veralto Corporation (VLTO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research