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Date

Thursday, May 7, 2026 at 5 p.m. ET

Call participants

  • Chief Executive Officer — Jon Vander Ark
  • Chief Financial Officer — Brian M. DelGhiaccio
  • Vice President, Investor Relations — Aaron Evans

Takeaways

  • Revenue Growth -- 2.6% increase, primarily due to disciplined pricing execution and ongoing investments.
  • Adjusted EBITDA -- Grew 4.3%, with margin expanding by 50 basis points to 32.1%.
  • Adjusted Earnings Per Share -- $1.70, reflecting margin expansion and cost discipline.
  • Adjusted Free Cash Flow -- $984 million, up more than 35% compared to the previous year due to EBITDA growth and working capital timing.
  • Average Yield on Related Revenue -- 4.1%; average yield on total revenue was 3.4%.
  • Core Price on Total Revenue -- 5.7%; core price on related revenue was 6.8% (open market: 8.4%, restricted: 4.4%).
  • Organic Volume Change -- Decreased related revenue by 1% and total revenue by 80 basis points, with sequential improvement in landfill, large, and small container verticals.
  • Special Waste and Landfill Volumes -- MSW volumes up 1.4%; special waste revenue up 9.9%.
  • Commodity Pricing -- Recycling commodity prices averaged $120 per ton, down from $155 per ton, offset by increased polymer center volume; prices currently at $125 per ton.
  • Environmental Solutions Revenue -- Declined $44 million, with $15 million attributed to a nonrecurring 2025 emergency response job; adjusted EBITDA margin was 19.2%.
  • Capital Expenditures -- $249 million year-to-date, representing 12% of projected full-year spend.
  • Debt and Liquidity -- Total debt of $14 billion and liquidity of $1.8 billion; end-of-quarter leverage ratio of 2.6x.
  • Acquisitions -- Over $700 million invested year-to-date ($433 million in the quarter); full-year acquisition investment projected to exceed $1 billion.
  • Digital Investments -- Management said, "We believe that these investments in digital will deliver at least $100 million of annual benefit by 2028."
  • Electric Collection Vehicles -- Over 200 EV trucks in operation; expected to exceed 300 by year-end.
  • Renewable Natural Gas (RNG) Projects -- Nine projects brought online in 2025; four new projects to launch in 2026, targeting a total of 82 active projects; $10 million incremental annual EBITDA contribution expected, ramping to $100 million by 2030.
  • Customer Retention -- Maintained high rate of 94%; Net Promoter Score described as strong.
  • CPI-Linkage -- Roughly 20% of restricted contracts indexed to CPI, 35% to alternative indices; CPI pass-through lag averages 12 months.
  • Share Repurchase -- $314 million returned to shareholders via repurchases in the quarter.

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Risks

  • Weather Impact -- CFO Brian M. DelGhiaccio said, "We estimate severe weather negatively impacted volume performance by approximately $30 million during the quarter, which was reflected in our full-year revenue guidance."
  • Fuel Price Headwinds -- CFO Brian M. DelGhiaccio stated, "The sharp increase in diesel prices in March negatively impacted EBITDA performance by $8 million in the first quarter."
  • Residential Volume Decline -- Residential volume down 5.2%, primarily due to known contract losses; management expects similar trends for the remainder of the year.
  • Environmental Solutions Revenue Pressure -- Revenue in the Environmental Solutions segment declined by 1.3% organically, driven by nonrecurring projects and market factors, with sequential margin below 20%.

Summary

Republic Services (RSG 0.63%) reported moderate revenue and margin expansion on the back of disciplined pricing and digital investments, while flagging near-term exposures to lower commodity pricing, fuel cost inflation, and weather-driven volume impacts. Management reiterated confidence in meeting full-year guidance and outlined expectations for Environmental Solutions and volume momentum to improve in the second half as project deliveries ramp and macro conditions stabilize. New deployment milestones in electric vehicle fleets and substantial acquisition activity signal continued strategic execution across core and adjacent verticals.

  • Management confirmed over $700 million has been deployed in acquisitions year-to-date, with an annual target now exceeding $1 billion as opportunities in recycling and waste accelerate.
  • The company expects $100 million of incremental annual benefit by 2028 from digital initiatives spanning pricing, routing, and customer service, with early returns in pricing emerging first, followed by RISE platform scalability and customer service gains.
  • CFO Brian M. DelGhiaccio detailed future RNG portfolio earnings, stating, "The total contribution that we are expecting from the RNG portfolio is $10 million of incremental revenue and $10 million of EBITDA this year, which is consistent with what we thought at the beginning of the year as well.”
  • Volume headwinds in residential and Environmental Solutions are anticipated to persist near term, but with margin expansion in underlying business lines expected, exclusive of project-based landfill volume effects.
  • EV truck rollout will continue in compliance-supportive markets, with unit economics so far "beating our assumptions in the pro forma," and expansion set to meaningfully influence capital allocation by decade’s end.
  • About 20% of CPI-restricted contracts are indexed to headline CPI, with a typical pass-through delay of 12 months, creating a lagged margin response if inflation trends higher.

Industry glossary

  • Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for nonrecurring items and as defined by the company.
  • RISE Platform: Republic Services' proprietary digital system integrating AI-driven pricing, routing algorithms, and customer engagement tools.
  • Open Market Pricing: Pricing on contracts not governed by fixed or regulated rates, allowing for market-based adjustments.
  • Restricted Pricing: Contractual pricing agreements with limits on periodic price adjustments, often tied to indices like CPI or municipal agreements.
  • RNG (Renewable Natural Gas): Biogas derived from landfill or other organic waste, processed to pipeline-quality fuel, typically used for energy generation or transportation fuel.
  • Special Waste: Waste material requiring specialized handling, such as certain industrial byproducts, that do not qualify as hazardous, but fall outside standard municipal solid waste.
  • MSW (Municipal Solid Waste): Non-hazardous waste from households, businesses, and institutions, typically collected by municipal waste services.
  • Polymer Center: Facilities for processing post-consumer plastics into recyclable raw materials, part of Republic’s circularity and sustainability initiatives.

Full Conference Call Transcript

Aaron Evans: Jon Vander Ark, our CEO, and Brian M. DelGhiaccio, our CFO, are on the call today to discuss our performance. I would like to remind everyone that some information discussed on today's call contains forward-looking statements, including forward-looking financial information, which involve risks and uncertainties and may be materially different from actual results. Our SEC filings discuss factors that could cause actual results to differ materially from expectations. The material that we discuss today is time sensitive. If in the future you listen to a rebroadcast or recording of this conference call, you should be sensitive to the date of the original call, which is 05/07/2026. Please note that this call is the property of Republic Services, Inc.

Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of Republic Services, Inc. is strictly prohibited. Our SEC filings, earnings press release, which includes GAAP reconciliation tables and a discussion of business activities, along with a recording of this call, are available on our website, agropublicservices.com. In addition, Republic’s management team routinely participates in investor conferences. When events are scheduled, the dates, times, and presentations are posted on our investor website. With that, I would like to turn the call over to Jon.

Jon Vander Ark: Thanks, Aaron. Good afternoon, everyone, and thank you for joining us. We are pleased with our first quarter results, which position us well to achieve the full-year guidance that we provided in February. We delivered strong earnings growth and expanded margins, all while overcoming lower commodity prices and the impact of higher fuel during the quarter. Our results reflect our disciplined pricing execution, effective cost management, and the value created from ongoing investments in the business. During the quarter, we achieved revenue growth of 2.6%, generated adjusted EBITDA growth of 4.3%, expanded adjusted EBITDA margin by 50 basis points, delivered adjusted earnings per share of $1.70, and produced $984 million of adjusted free cash flow.

We continue to secure new growth opportunities by leveraging our differentiating capabilities: customer zeal, digital, and sustainability. With respect to customer zeal, our customer retention rate remained high at 94%. Our Net Promoter Score remained strong, reflecting our team's commitment to delivering exceptional customer value. First quarter organic revenue growth was driven by solid pricing across the business. Average yield on related revenue was 4.1%, and average yield on total revenue was 3.4%. Organic volume decreased related revenue by 1% and total revenue by 80 basis points. Volume performance improved sequentially, most notably in the landfill, large container, and small container verticals.

Importantly, we delivered year-over-year revenue growth in the temporary large container business this quarter for the first time in over two years. Combined average yield and volume growth grew 1.2%. Organic revenue in the Environmental Solutions business decreased total revenue by 1.3% in the first quarter, which was in line with our expectations. More than one third of this decrease in the Environmental Solutions business related to an emergency response job in 2025 that did not repeat. Our Environmental Solutions sales pipeline continues to build, with increased activity across multiple end markets. We expect year-over-year revenue growth in this business in the second half of the year.

Turning to digital, our ongoing investments in technology and AI are strengthening how we operate and compete. Over time, these capabilities are expected to drive additional growth, expand margins, and support continued operating leverage. We are actively deploying AI-based predictive technology that supports optimized pricing decisions across markets with varying customer and competitive dynamics. This approach is expected to reinforce price retention and reduce customer attrition over time. Enhancements to our RISE digital platform are progressing, with initial deployment focused on the large container business. The integration of AI and advanced routing algorithms is expected to improve safety outcomes, strengthen service execution, and increase route efficiency.

Activation of digital tools in our call centers is enhancing the customer experience and unlocking value in our business by optimizing the 11 million inbound calls we receive each year. We believe that these investments in digital will deliver at least $100 million of annual benefit by 2028. Within sustainability, we continue to believe that our sustainability innovation investments in plastic circularity and decarbonization position us for growth and long-term value creation. Production volume has increased across our polymer center network as we optimize processing operations. Customer demand for our domestic post-consumer plastic remains strong. We continue to advance renewable natural gas projects with our partners.

We brought nine projects online throughout 2025 and expect four additional RNG projects to begin operations in 2026, which would bring our total landfill gas-to-energy portfolio to 82 projects. We continue to execute against our industry-leading commitment to fleet electrification. We had more than 200 electric collection vehicles in operation at the end of the first quarter. We expect to exit this year with more than 300 EV trucks in our fleet to support the continued growth of this differentiated service offering. We recently celebrated with the City of San Pablo, who partnered with us to become the first city in California to operate an all-electric recycling and waste collection fleet.

As part of our commitment to sustainability, we strive to be the employer where the best people want to work. Our employee engagement score consistently exceeds national benchmarks, and we continue to experience record low turnover rates. Our comprehensive sustainability performance continues to be widely recognized as Republic Services, Inc. was named to Fortune’s World’s Most Admired Companies list and Ethisphere's World's Most Ethical Companies list. Regarding capital allocation, we have invested more than $700 million in value-creating acquisitions to date, which includes $433 million of investment in the first quarter. Our acquisition pipeline remains supportive of continued activity in both the recycling and waste and Environmental Solutions businesses. We expect to exceed $1 billion of acquisition investment this year.

As part of our balanced approach to capital allocation, we returned [inaudible] to shareholders in the quarter, including $314 million of share repurchase. I will now turn the call over to Brian, who will provide additional details on the quarter.

Brian M. DelGhiaccio: Thanks, Jon. Core price on total revenue was 5.7%. Core price on related revenue was 6.8%, which included open market pricing of 8.4% and restricted pricing of 4.4%. The components of core price on related revenue included small container of 8.2%, large container of 7.1%, and residential of 6.5%. Average yield on total revenue was 3.4%, and average yield on related revenue was 4.1%. First quarter volume decreased total revenue by 80 basis points and related revenue by 1%. Volume results on related revenue included a decrease in large container of 2.5%. This represents a sequential improvement of 130 basis points compared to our fourth quarter performance. Volume results also included a decrease in residential of 5.2%.

The sequential change in residential volume was primarily due to known contract losses, which was contemplated in our full-year guidance. Landfill volumes improved during the quarter, as MSW volumes increased 1.4% and special waste revenue increased 9.9%. We estimate severe weather negatively impacted volume performance by approximately $30 million during the quarter, which was reflected in our full-year revenue guidance provided in February. Moving on to recycling, commodity prices were $120 per ton during the first quarter. This compared to $155 per ton in the prior year. Recycling processing and commodity sales were flat compared to the prior year. Increased volumes at our polymer centers offset the revenue impact of lower recycled commodity prices.

Current commodity prices are approximately $125 per ton. Total company adjusted EBITDA margin expanded 50 basis points to 32.1%. Margin performance during the quarter included margin expansion in the underlying business of 90 basis points and a net benefit of 20 basis points from nonrecurring items, primarily due to a favorable legal settlement. This was partially offset by a 20 basis point decrease from net fuel, a 20 basis point decrease from recycled commodity prices, and a 20 basis point decrease from acquisitions. The sharp increase in diesel prices in March negatively impacted EBITDA performance by $8 million in the first quarter. Our fuel recovery fee tends to lag changes in fuel by approximately one month.

We expect fuel recovery fees to offset higher fuel costs beginning in the second quarter. With respect to Environmental Solutions, first quarter revenue decreased $44 million compared to the prior year. Approximately $15 million of this decrease related to an emergency response job in 2025 that did not repeat. Adjusted EBITDA margin in the Environmental Solutions business was 19.2%. Adjusted free cash flow of $984 million increased more than 35% compared to the prior year. This increase was driven by EBITDA growth in the business and the timing of working capital and capital expenditures. Year-to-date capital expenditures of $249 million represent 12% of our projected full-year spend. Total debt was $14 billion and total liquidity was $1.8 billion.

Our leverage ratio at the end of the quarter was approximately 2.6 times. With respect to taxes, our combined tax rate and impact from equity investments in renewable energy resulted in an equivalent tax impact of 24.9% during the first quarter. With that, Operator, I would like to open the call to questions.

Operator: We will now begin the question and answer session. In the interest of time, we ask that you limit yourself to one question and one follow-up question today. If your question has been answered and you would like to withdraw your request, you may do so by pressing star. If you are using a speakerphone, please pick up your handset before pressing the keys. Our first question comes from Noah Kaye.

Noah Kaye: Yes. Good afternoon. Thanks for taking the question. You all are well. Can you hear me?

Jon Vander Ark: Yes. We can hear you.

Noah Kaye: Okay. Great. Thank you. So AI and digital productivity are definitely a strong theme for the sector and for you. This quarter, you called out $100 million of annual benefits from investments by 2028. Can you sort of benchmark where that benefit might be penciling out for 2026 and how to think about it flowing in the next couple of years? And then maybe just to unpack a little bit, the buckets of benefit that you are getting here.

Jon Vander Ark: Yes. On the latter part of your question, we mentioned three areas of benefit: routing, the RISE pricing, and then customer service, and I would list those in terms of the priority of the impact or the scale of the impact over time. Pricing will come first, and we will see some benefit in 2026, and that will build over 2027 and 2028. We are going to see very little—probably no—benefit of that in 2026 on RISE, just because we are doing all the work, and that will scale. You will start to see that benefit come in 2027, and then that will really scale in 2028, and that, again, will be the largest impact.

Then on customer service, I think you will see ratable improvement across the three years. Right now, that is the smallest of the three categories I mentioned. Those are not the only three. We are looking at AI in every area of the business: back office, legal, HR, all kinds of places. These are the three where we see the most immediate benefit to scale, but it will have a profound impact across the business.

Noah Kaye: That is very helpful. Maybe we could talk a little bit about the price-cost performance this quarter. To get 90 basis points underlying expansion when you had the headwinds from weather and some of the cost pressures is impressive. Maybe you can talk a little bit about what you have seen so far on price retention. Was that better than you expected? Did you maybe get a little bit better operating leverage off of cost savings initiatives? Just help us understand the quarter and how you see it trending as we look at margin profile for the next couple of quarters.

Jon Vander Ark: I would lead with cost. Our cost performance has been really strong for a number of years now. Inflation has come down, but we have done a lot of self-help there with the underlying RISE benefits. You are seeing that through labor productivity. You are seeing it in our maintenance costs being very strong. We are doing a good job of balancing pricing, again primarily playing a long game. We want to understand, even in a volume-challenged environment, how to retain customers over time. We have had to find our place in different markets both to retain and to compete for new work given the challenging macro.

The team is doing a great job of finding that right mix to still get that underlying margin expansion.

Operator: Our next question comes from Bryan Nicholas Burgmeier with Citi.

Bryan Nicholas Burgmeier: Hi, good afternoon. Thanks for taking the question. Brian, can you maybe just provide some details on how you are thinking about 2Q? I want to be mindful of the wildfire comps, the fuel impacts, M&A integration, but then conversely, you would have some seasonal step-up, and recycled commodities are doing a little better. We were thinking margins would still probably be down slightly year over year, but any details you can add on that would be helpful.

Brian M. DelGhiaccio: Yes, that is still what we are expecting for the second quarter. I would say, from a margin perspective, somewhat flat to slightly down on a year-over-year basis, largely due to some of the project-related landfill volumes that you mentioned. That is the biggest driver of that. Ex that, we would have anticipated margin expansion—so margin expansion in the underlying business excluding the impact of those volumes. Overall, it is obviously going to have an impact on the top line as well. We think that is going to have a negative impact on volume performance, which is exactly what we thought when we entered the year: negative in both Q2 and Q3, flipping to positive in the fourth quarter.

So largely the same as what we thought when we provided the guidance in February. And again, nothing has really changed based on our performance in the first quarter.

Bryan Nicholas Burgmeier: Got it. Thanks for that detail. One quick follow-up: Are you expecting or forecasting any impact to EBITDA in 2Q from fuel? And then can you help us frame the margin impact as you pursue the surcharges and pricing associated with that?

Brian M. DelGhiaccio: As I mentioned in the prepared remarks, we tend to lag from a fuel recovery fee perspective the increased cost of fuel expense. As prices have been rising, we have been chasing that month on month. We expect the fuel recovery fee to start kicking in the second quarter. Our overall objective is to recover the full cash impact of those rising fuel prices. There are both direct impacts as well as indirect. The sensitivity that we provide in our disclosures is more of a direct-type concept. There are going to be other impacts like potentially increased transportation expenses and increased CapEx as well that goes along with that.

If we achieve recovery from a holistic or comprehensive cash perspective, that is the overall objective.

Operator: Our next question comes from Adam Bubes with Goldman Sachs.

Adam Bubes: Hi. First on the volume line, I think you called out weather as a $30 million headwind in the quarter and then you were lapping maybe $12 million of event-related volumes. If I have it right, that implies volumes are tracking flattish year over year. How did underlying volumes compare with your initial expectations, and can you talk about what you are seeing in volumes in March and April and the expected cadence throughout the year?

Jon Vander Ark: I think we are starting to see some underlying momentum. I would put a word of caution on that given the macro uncertainty we are facing around two wars and oil prices and all the other things that you see and read. But I would say some green shoots are starting to emerge in terms of the underlying demand signal. Special waste has been particularly strong, and we are seeing some momentum month over month in the first quarter. We are going to look for that to build, and again, at what rate that builds we will talk more about in the next quarter.

Versus three months ago, I would say we are slightly more positive on where the macro is.

Adam Bubes: And then I think the spread between core price and yield was a little wider this quarter at 2.7% versus 2% last year. Is that just a mix impact? What is driving that, and how do you think about that spread going forward as you continue to leverage AI to implement more surgical pricing tools?

Brian M. DelGhiaccio: It predominantly is mix. You are spot on there. In part, it is driven by the relatively better performance we are seeing in the temporary large container business, which is predominantly construction-related activity. Sequentially, volume performance improved 500 basis points, and that is where you tend to see that impact because we do not capture price on a temporary unit. You will see it in that churn, mix, and other, which is the difference between core price and average yield. The good news is that as those units return, you are getting that incremental volume, but it is what it ultimately leads to. It is that permanent unit of service.

It is the temporary units leading to household formation, which ultimately leads to small business formation, which is extraordinarily important to us.

Operator: Our next question comes from Kevin Chiang with CIBC.

Kevin Chiang: You are right. I am on mute. Thanks for that. I apologize if I missed this. You called out the $12 million or $50 million headwind in ES in terms of the year-over-year comp. Did weather impact ES as well? And if I think of sequential margin performance, if it did, would we expect to see a more outsized margin cadence from Q1 into Q2 within ES, just given it dipped below 20% in the first quarter here?

Jon Vander Ark: I would say weather was a factor. I would not say it was the dominant factor—more of the year-over-year comp we talked about—but weather was certainly a factor. And I think we talked about this last quarter: you will see momentum in the back half, both in the top line and margin expansion, in the business. We feel really good about the momentum that team has. I think we talked about probably missing the market a bit as volume declined. We were still pretty aggressive on price. I think we found our footing there on a price-volume standpoint.

ES can have a longer sales cycle, so a lot of the great activities we see will not show up in the P&L until the second half.

Kevin Chiang: That is great color. And my second question: just wondering, given where virgin plastic pricing is, does that impact the economics of polymer centers or the Blue Polymer JV?

Jon Vander Ark: There are a lot of moving pieces right now on plastics. Pre–Iran war, we saw global challenges with a glut of virgin PET out of Asia flooding the U.S. market, some of which is coming in as rPET. We are working with our industry stakeholders and the government to address that issue. The war itself has been helpful in that because we are starting to see that production go down as they have had to ration oil supply and get it to primary use versus secondary use, like plastics. The net impact is we are seeing our spreads increase, both in the polymer centers and the Blue Polymer JV.

We feel really good about the demand profile and the momentum we have in that business.

Operator: Our next question comes from Jerry Revich with Wells Fargo.

Jerry Revich: Yes, hi. Good afternoon. I am wondering if we could talk about the electric collection vehicles as you folks are ramping up towards 300. Can you talk about where you are deploying them, what the unit profitability looks like compared to conventional trucks on an all-in basis, and what proportion of your footprint you could ultimately see EVs operating in—how meaningful a part of the fleet could it be in terms of where there is actual availability of power and economics?

Jon Vander Ark: We feel good about the deployment and the rollout. We have had really good partners in that space. It is concentrated in markets that you would expect that have local and state environments that are supportive—places and municipalities that are willing to pay, and states that might have incentives to support that—because it is a different OpEx/CapEx trade-off. The truck is going to be more expensive, but then cheaper to operate. We are beating our assumptions in the pro forma so far. We will learn more every year that we drive those trucks, but we feel good about the operational performance. You are going to see us deploy.

We did lose a little bit in terms of federal incentive with the administration change, and so that has probably slowed the rollout modestly. In residential, this is continuing to be a focus as we buy the trucks, and we are moving to small container next. I do not think large container is in the cards in the short term, but this will end up being a meaningful portion of our buy as we approach the end of the decade.

Jerry Revich: Super. And then on RNG, thank you for the update on the facility counts. Can you talk about the operating performance on the facilities? Are you expecting any equity income this year? What is the profitability cadence as they ramp up, and can you comment on expected royalty contributions this year versus plan?

Brian M. DelGhiaccio: The total contribution that we are expecting from the RNG portfolio is $10 million of incremental revenue and $10 million of EBITDA this year, which is consistent with what we thought at the beginning of the year as well. That is going to ramp up as we move forward. It is kind of $10 million in 2027, $15 million in 2028, $15 million in 2029, and ultimately $20 million by 2030. That is how that ramps up to $100 million of incremental revenue by the end of the decade.

Operator: Our next question comes from Trevor Romeo with William Blair.

Trevor Romeo: Hi, good afternoon. Thank you for taking the questions. I have a couple of quick ones. First, I wanted to ask on your organics processing business. There was some press lately around a couple of new facilities you opened up in California and Colorado. Could you speak to how you are thinking about investing in the organics business, what you are seeing from a regulatory perspective, and the overall growth opportunity there?

Jon Vander Ark: That ends up being very regional or state specific. Where there is support, either from state regulation or a community willingness to pay, we are investors and operators, both on the collection side and then the processing on the back end. The price of that technology needs to come down on the processing side to make it more scalable. Longer term, it is going to be a growth driver. Roughly 25% of what goes through our landfill is organic in some capacity. That ultimately could come out and be processed a different way. We continue to pursue opportunities, and as the regulatory environment evolves, you will see that business scale.

Trevor Romeo: Thank you. And then going back to ES, you talked about the sales pipeline building. Could you give an update on your cross-selling initiatives there and what you are seeing in terms of customer demand for the broader set of solutions across your two segments, and how you are executing on that opportunity?

Jon Vander Ark: Our most profitable customers want an integrated offering, and we are uniquely positioned given that we can offer them a broad suite of services—recycling, waste, special waste, and the various services that are within Environmental Solutions. To unlock the opportunity further, we are working on IT and sales enablement to get the information in the right hands of our sellers so that, at local customers, we can unlock exactly what we offer, including things as tactical as a single contract and a single bill—ways to make it really easy for our customers to do business with us. We are making great progress on that.

You will see that build over the next 18 to 24 months as some of those initiatives get fully deployed.

Operator: Our next question comes from Seth Weber with BNP Paribas.

Seth Weber: Great. Thank you, and good afternoon. Could you give us your updated thoughts on the cadence for the shedding in the residential contracts—how we should think about that potentially moderating through the balance of the year?

Brian M. DelGhiaccio: I think you will see it pretty consistent across the year. The big driver in residential was three larger contracts that we lost—regrettable in the sense that we would love to have those contracts and serve those communities at the right price and cost. But we are going to be very returns focused as we deploy capital and have our people do work in communities. We need to get a fair price for the work that we do. We are still seeing more challenges in that vertical than in others, with some in the market willing to do work for very low returns.

You will see those numbers pretty consistent across the year, with slight improvement in the second half, and then I think a different outlook in 2027.

Seth Weber: Got it. Thank you. And on M&A, it sounds like you are now talking about $1 billion plus, which I think is a little bit stronger than what you mentioned last quarter. Is that a function of feeling better about your free cash flow outlook, or just more deals presenting themselves, or any nuances as to why you are taking that number up at this point?

Jon Vander Ark: It is the opportunities—both what we have already closed and what we have in the pipeline. We are rarely financially constrained; it is always opportunity constrained. A deal has to meet two screens for us: it has to have the right financial returns, and it has to be the right strategic fit. We have to be the right owner and be able to take that asset and do something more productive with it. We are having a really positive year in terms of what we have already locked up and closed and what we see coming forward in the next six to nine months.

Operator: Our next question comes from Toni Kaplan with Morgan Stanley.

Toni Kaplan: Great. Good afternoon. Thank you. I wanted to start on free cash flow—really strong quarter. It sounded like maybe it was because of CapEx timing. You talked about it being roughly 12% of the full-year CapEx spend in the first quarter. Was there a reason CapEx was lower this quarter, and what are you planning to spend it on for the rest of the year?

Brian M. DelGhiaccio: Most of it, from a timing perspective, is really within working capital. You can see that, and much of it has to do with the number of AP payments that were made as well as payroll payments. That is something that will flip over the balance of the year, so we called out that timing piece. On CapEx, it is not abnormal for us to spend below 25% of our full-year spend in the first quarter. You can go back over several years and that is the case. We do expect to spend the full-year CapEx that we guided to at the beginning of the year.

Toni Kaplan: Got it. And on M&A, there was roughly $700 million to date, I believe. Were you trying to strengthen current markets that you are already in or entering new ones? Just trying to understand what opportunities you were able to find and how you are thinking about what targets you are approaching.

Jon Vander Ark: Yes and yes. In recycling and waste, we look both at the markets that we are already in to strengthen those—that is the bread and butter of what we do acquisition-wise—and at expanding into new geographies. Those become great platforms for further tuck-in acquisitions over time. The same applies to Environmental Solutions: strengthening markets we are already in and expanding into new markets. The balance of the spend so far this year—what is already closed and what is signed and going to close—has really been 90% plus recycling and waste. That balance will probably rotate a little throughout the rest of the year, but we feel pretty strong on both ends.

Operator: Our next question comes from Tami Zakaria with JPMorgan.

Tami Zakaria: Hi, good afternoon. Thanks for the time. Question on CPI. The March reading accelerated sequentially. Could you remind us how much of your portfolio is indexed with CPI, should it continue to go higher, and what is the typical lag?

Brian M. DelGhiaccio: Of our portfolio of contracts that we call restricted, which have some sort of pricing restriction embedded in the contract itself, just shy of 20% are directly linked to headline CPI. Thirty-five percent are linked to some sort of alternative index—water, sewer, trash—with the balance, about 45%, at some sort of fixed rate embedded in the contract itself or a rate review. The lag tends to be, on average, 12 months. There is a look-back period, and then the implementation period tends to be about 12 months after the fact.

Tami Zakaria: That is very helpful. And I wanted to double click on residential volumes. I know you are not speaking to 2027 specifically, but do you expect residential volumes to turn positive at some point next year?

Brian M. DelGhiaccio: The rate of decrease will certainly improve. Whether that is flat next year or not—probably still declines—just given some of the rollover effect of those larger contracts that we lost, some of which started on January 1 and some of which are midyear conventions. We are going to continue to put upward pressure on price, be returns focused, and get paid for the work we do. To the extent that customers are not willing to pay, we will put our resources into other verticals and other opportunities.

Operator: Our next question comes from Konark Gupta with Scotia Capital.

Konark Gupta: Thanks. Just following up on the residential business. I understand the volumes are declining and why, but if we can talk about the underlying business, how is it performing from profitability and return standpoints?

Jon Vander Ark: Profitability in that business is improving for a couple of reasons. One, when you have a contract that is underperforming and you look to get it to an acceptable level of return, and if you do not retain that because someone is willing to take it at a relatively lower price, you are going to improve your overall performance. Coupled with the fact that, across the remainder of the portfolio, the level of price in the residential system itself has been very strong and well in excess of our cost inflation. The combination has driven margin expansion in that business. When we bid residential contracts, we never bid them to lose money.

We bid them with assumptions of profitability, but things change over the course of a five-year term—maybe we did not have a good pricing escalator in the contract and our costs inflated faster, or maybe our assumptions on the number of trucks needed to cover the community were not quite right. We are being very disciplined across each contract to ensure we are returns driven and pricing accordingly when the contract comes up.

Konark Gupta: Thanks. And if you can follow up on the employee turnover side of things. Are you seeing any implications, direct or indirect, from the CDL regulations going through in the U.S.? I understand your drivers may not all be CDL necessarily, but do you see any impact from the shortage of drivers in the industry?

Jon Vander Ark: Our drivers do have CDLs, and the impact has been de minimis. There have been a few individual cases, but overall, as we set the turnover record two years in a row—and we may break it again for a third year—the team is doing a great job of finding talent—technicians, drivers, customer service agents, and all of our other frontline colleagues—and retaining those colleagues at increasingly high rates.

Operator: Our next question comes from Shlomo Rosenbaum with Stifel.

Shlomo Rosenbaum: Hi, thank you very much for taking my questions. You mentioned that you are starting to see some green shoots in the solid waste business. Are you seeing similar green shoots in the ES business as well? Are you seeing some of the turnarounds happen a little bit faster? What signs are you seeing over there?

Jon Vander Ark: I would certainly say it is improving, maybe not quite as quickly as we are seeing on the special waste side of the recycling and waste business. There are moving pieces. As oil prices spike and people try to blow out demand, that delays some of the underlying project work, which cannot be delayed forever but can be suspended for three to six months. There are puts and takes, but the trend line is definitely up, and we will see what kind of momentum we build in the second quarter.

Shlomo Rosenbaum: Thank you. And what was driving the volumes down in the C&D business? Was there a tough comp issue?

Jon Vander Ark: It was more of a comp issue. In the prior year, we had some hurricane cleanup efforts in the Southeast.

Operator: Our next question comes from Tobey Sommer with Truist.

Tobey Sommer: Can you hear me?

Jon Vander Ark: Yes, we can hear you.

Tobey Sommer: Great. I wanted to ask about volume in Environmental Solutions. How do you expect the cadence to change throughout the balance of the year?

Jon Vander Ark: We do not report on a specific volume metric in ES because there are so many different product and service lines that it would be really tough given mix. As I mentioned earlier, we see momentum building in the second half of the year. You will see incremental progress quarter to quarter. The year-over-year comp is tougher in the second quarter, but in the second half you will definitely see the volume picture build.

Tobey Sommer: Thank you. And with respect to your acquisition program, are you seeing opportunities on the ES side as readily as you are on a municipal solid waste front?

Jon Vander Ark: Plenty of opportunities. I would say there is a little more momentum right now in recycling and waste—not because of activity on our side, but just timing of market. We know these things ebb and flow. Lots of opportunities we have on the recycling and waste side, we have had discussions with the sellers for over a decade. It is timing and event-driven on their side. In Environmental Solutions, we do not have the relationship profile that long, but still some of the same dynamics. We maintain a significant dialogue. For every acquisition we close, we have probably had several fall out of the system at some point in the pipeline.

We are very discriminating in terms of who we buy, but the activity level there is very strong as well.

Operator: Our next question comes from Stephanie Moore with Jefferies.

Stephanie Moore: Great. Good afternoon. Thank you. I wanted to circle back on some of the commentary you provided on your RISE digital platform. Some of your peers have talked about leveraging technology for more dynamic pricing discussions. Is that an area that you have tackled as of late? And at the same time, you have talked in the past about opportunity with AI and algorithm-based routing. I wanted to get an update there as well. Thank you.

Jon Vander Ark: Both sides. On pricing today, we are using dozens of variables through AI to build bespoke prices to existing customers when we send them our annual price increase. We are trying to get that as surgical as possible to give them a price that maximizes both what they will pay and incents them to stay over a long period of time. That is a game of inches in terms of dialing that in, but small basis points across individual customers add up quickly across the system. That will continue to get better over time and builds in a more linear fashion.

On routing, there is a lot of upfront work, particularly around data accuracy and data management, that you need to have in place so that when you start building dynamic routes through AI—and then routing dynamically through the day—you get it right. We will not sacrifice customer service to pursue short-term gains. We are going to get it right with the customer first and then drive operational efficiency through the system while improving customer service. You will start to see some of that benefit in the second half of next year, but 2028 is when we think we scale.

Operator: Our next question comes from David Manthey with Baird.

David Manthey: Thank you. Good afternoon. How much of the Environmental Solutions weakness is that self-inflicted pricing that you mentioned as opposed to end-market softness? And if some of it is market related, what exposures by service or customer type lead you to your view of an improvement in 2026, just so we can sort of track that?

Jon Vander Ark: To answer the last part of your question, we see the sales pipeline and understand the activities both on our side and work that is contracted and slated to begin. Some of those are longer-term things that happen over many months, and some are shorter, but we know the start dates happen later in the second quarter or into the third quarter. The split between market and our own activity is hard to identify. It was more self-inflicted in the second half of last year. As we go forward, it is more market driven. We think we have market pricing dialed in. We are not going to get it perfect every time, but it is much improved.

Some of this is ER, which is hard to predict. We have had a soft 18 to 24 months on emergency response other than a single job. Going forward, we would expect that to resume to normal levels, but we will see. It is a mixed picture on the underlying verticals. I mentioned petrochemical being a little slower. We are seeing some of biotech being a little slower, whereas some other verticals are moving quicker.

David Manthey: And given that you have visibility on these projects as they are coming down, should we assume these are turnarounds, remediation, hazardous C&D—how should we think about what types of work that is?

Jon Vander Ark: It is a full mix. It can be recurring things where we won the opportunity to take all of the integrated waste out of a plant—a plant produces recycling, solid waste, special waste, hazardous liquids, hazardous water—and we can handle all of that. Or it could be events where we know we are projected to do a big remediation opportunity. That could produce special waste and hazardous waste solids, and that event could be as short as two weeks or could last as long as eight or nine months.

Operator: At this time, there appear to be no further questions. I will turn the call back over to Jon Vander Ark for closing remarks.

Jon Vander Ark: I want to thank the Republic Services, Inc. team for the great start to the year. Their continued focus on safety, sustainability, and exceeding customer expectations positions us for success and another year of strong results. Have a good evening, and be safe.

Operator: Ladies and gentlemen, this concludes the conference call. Thank you for attending. You may now disconnect.