REPUBLIC SERVICES, INC. — Call Transcript 2026

Thank you, everybody. We're moving on to our next company panel. I want to welcome Republic Services, Jon Vander Ark and Brian DelGhiaccio, the CEO and CFO, respectively. Thank you very much for joining. Good to be here. Really appreciate it. I'm going to just ask you some general industry questions, topical questions, and some specific questions for Republic. I think you guys are veterans at this, so it shouldn't be anything that you haven't probably heard from a lot of people, but I thought that it'd be very interesting to just frame the dialogue for today. I was going to start out, just what's your view on the current state of solid waste? Where are we? What inning are we in within the whole industry in terms of maturity and, in general, in terms of the ability to enhance the business, both externally with acquisitions and internally in terms of moving the margins forward? Where do you think we're at? Yeah, I'd say we're mid-innings. I think the industry has made a ton of progress over the last 25, 30 years. Think about what was true 30 years ago, right? Vertical integration wasn't common knowledge or well understood to be how to drive returns and value. Hauling companies and landfills used to be largely separate. Recycling was a side project 30 years ago. Now it's become very core to the business. You think about from a returns standpoint. EBITDA margins have gone from the high teens into the low 30s. Better industry structure, substantially better industry conduct. Lots of positives, but I'd say it's only mid-innings because I think about technology, and this is an industry that by and large has been a laggard, not a leader, in applying technology to their business. I think we've made a lot of progress. You think about AI coming down the pike and going to be transformational, I think, almost every aspect of the business. I think there is more room to improve in terms of performance of the business, safety, customer service delivery. Industry structure will continue to get better through acquisitions. Ultimately, I think returns have plenty of room to go up, not down. Okay. Maybe we could just double-click on that a little bit more in terms of the technology. Where are we today versus where you think we're going to be in the future, say, three to five years from now, just in terms of what you're doing with AI now, what are some of the initiatives? How should Republic look different or incrementally different in several years from now? I think that we've done a really good job of automating the business. AI allows us to, in many ways, transform the business. Customer service, take 11 million calls. I think we're going to be taking half or less of those calls over the next three to four to five years at the longest. Because we're going to serve up information in our customers' hands. It doesn't mean they can't call us, it's just we're going to get them the information in their hands and the way they want to get it, faster, better, cheaper on that front. How we route the business. Today, we have very talented logistics analysts who build and manage routes throughout the day. [But] there is no way that somebody can optimize routes across 15,000+ routes we're going to run today to understand the exact sequence we should run those routes. Disposal optimization. Every day, we make the decision, do we go to one of our competitors' transfer stations, or do we drive directly to our recycling center landfill? The trade-off, obviously, if you get more route time, if you go to the competitor's transfer station, that's a higher-cost disposal option. Again, we make good decisions, the human mind has limitations, that's where AI, we think, is going to be hugely transformative. How we price customers. Understanding the unique fingerprint of each customer, their service history, their relationship with us, sending out a bespoke price that gets them to pay a lot, but stay, ultimately to stay. Lots of headroom there as well. [So] within that kind of vision, where are you right now? Of the things you're discussing in terms of route automation and customer service, are you in the beginning portion of that, or are you like, "Hey, we're already starting to roll this out with AI"? How is that working? Yeah. We've obviously gone through RISE and we've automated all of our routes and digitized them. We're in the design phase, really, and moving quickly into the pilot phase around AI for routing, and you'll see that scale next year, and then you'll see that roll out in a big way or be mostly rolled out by 2028 on that front. Pricing, we're already there, we're already using it, and that has just a compounding benefit, too, to that. Customer service, and really all of the back-office functions, we're still pretty early days, but we're starting to take out some heads and automate the work, but we've got plenty of room in front of us as well. Just, this is a little more of a numbers question, I guess, but this may be Brian, then I'll end up with you. The company talked about getting about $100 million of EBITDA benefit by 2028 from AI, increased AI usage. You said routing, pricing, customer service. Could you talk a little bit more, is this proportionally the same kind of opportunity both in the legacy U.S. Ecology business and the solid waste business? In terms of when I think about it, is routing really the biggest bucket you could get opportunity and then pricing and then customer service? Or could you just order, maybe rank them in terms of materiality and how much materiality? Yeah. Ranked, it would start with routing. That is our largest opportunity, followed by pricing and then the customer service center. More broadly, when you think about where this is going to impact, this is almost exclusively in Recycling and Waste to begin. Okay? The opportunity exists in Environmental Solutions. It's just there's some foundational work that we need to do before we can then move to that next step, and we are now on a common platform within that business. There are other portions of technology that we're going to bring to that business, which is going to unlock value. We can move to that next phase, which will be AI, there's plenty of opportunity on that side of the business. Okay, to make sure I understand it right. For right now, we're talking about the solid waste business. We're going to have certain investments that you're going to be making in the industrial waste business, after which you feel like you're going to be able to bring AI over to that. Absolutely. Yeah, I would say this is where we're investing at scale. We're already using it in plenty of places around the Environmental Solutions business as well. Think about how we do waste profiling. Today, that's a pretty manual process back and forth with customers. AI is transformative in terms of how we evaluate the profile. We help customers fill in information. We can flag safety issues on materials that might be challenging to put together, we're getting a faster, better product out with customers. It just doesn't have the same scale benefits that Recycling and Waste will have yet. Because of Brian's point, we're doing the foundational work in that business. Okay. These are big buckets you talked about in terms of the AI aspect of benefits, a lot of times companies, you think of large buckets, there tends to be small projects where you can go ahead and enhance the overall efficiencies of the business. Are there some of those that, what gets the air time on earnings calls? which is where most of the investors here are like, "We're going to get routing and customer service and pricing." Are there other things that are like, hey, back office-wise, there's other stuff that's over here that are pretty cool that over the next few years, you actually might hear someone talk about that more because they're going to add up. Are there other things you want to point out, [Jon]? Yeah, we have a T-shaped strategy. The vertical portion are the big projects that we talked about, and there'll be more, but those are things at scale that we're putting in tons of resources across both our field-based teams and our central teams to get that done. There's a horizontal aspect to the strategy, which is put the tools in the hands of people and let them innovate. A good example is our head of internal audit has Copilot. No one asked her to do it, but she's built a series of agents and taken heads out of her organization that are doing the work that internal auditors would have done a year ago. Again, there was no mandate, there was just innovation. We're trying to get the tools in the hands of our people, and we're going to find great ideas, some of which will make us incrementally better and more efficient, and some of which will probably be bigger ideas that we end up scaling. I would say there have been opportunities, and there will continue to be opportunities that are broader than AI, just simple automation. Very quietly in the background, we've completely replaced all of our core systems, our entire ERP platform, which has really allowed us to automate, leading to standardization, ultimately centralization of certain tasks and functions. We've already driven out about 20 basis points of revenue from a cost perspective, somewhat ratably and in a phased approach. We'll continue to sit there and execute and monetize those opportunities. When you think about it, I guess from a hiring perspective, when you think just operationally, as you start to implement more of this, do you think of it as just, hey, we don't necessarily replace attrition so quickly? Or is this a matter of we see buckets of, hey, just straight out reduction? How do you approach that? There'll be some of both. I'd say my broader vision with technology is not to replace people, it's to empower them. We are a frontline workforce that gets out every day and largest labor force are drivers, and they're not just driving, they're operating. They're getting out and doing gates, locks, lids. I want technology to help empower them. I want to be more efficient and then ultimately, I need fewer drivers. Most of that will come out through attrition. We will have opportunities in the back office where there's just activities or functions that we don't need any longer, and hope many of those colleagues will try to get into new opportunities, and others maybe won't be a right fit for the enterprise. We're not going to be in a mass layoff zone. We're going to be in a, we're driving efficiency and empowering our people and hopefully growing the business. That allows us to do more with less. Okay. I just want to step back to that baseball analogy. You said we're in the mid-innings. Would you say the beginning of the mid-innings, the middle of the mid-innings, or the later mid-innings? I'd say there's more upside than downside. I think, listen, people talk about the pricing element of the business, and it's getting expensive and everything else. Think about what the industry does. We drive a truck in the residential side of the business 10 times a month across somebody's home, and we pick up the container, and we either take it to a recycling center, which is $60 million, $70 million, $80 million, and we repurpose that material, or we take it to a very modern landfill where oftentimes we're going to produce energy out of that. By the way, we're renting you a piece of real estate forever, and we're doing all that for less than your Starbucks bill a month. There is tremendous upside in the business for the value that we deliver, and I think, again, because the industry's been a relatively late adopter of technology, a lot of these AI tools are going to be things that have very transformational effect on the business. Mm-hmm. Okay. I want to pivot a little bit to your Environmental Solutions business. Very timely, we're following up a little on, we had a PFAS panel earlier on, but I thought maybe you could just discuss for investors how investors should think of the PFAS opportunity specifically for Republic. Maybe go over the various categories of services that you provide that would capitalize on that PFAS opportunity. Where do you see the demand? When you think of it for yourself, is there a way with what we do in PFAS today, with all the numbers getting bandied about, how do you think about that market? I thought the panel did a good job of covering the opportunity. I think it's a very meaningful opportunity that is going to play out over the course of two to three decades minimum. I think the pace at which we kind of get to peak run rate is going to be regulatory driven. Right now, you're seeing, you heard Clean Harbors talk and ourselves, we're going to do $100 million of PFAS work this year. Some of that shows up in our Environmental Solutions P&L, and some of that shows up in our Recycling and Waste P&L because we take low-level PFAS as special waste, and we really believe in a range of solutions or outcomes for our customers. There's things that absolutely have a home in incineration, and low level has a home in a solid waste landfill, and there's a lot of opportunities in between in terms of hazardous waste landfill, deep well, et cetera. We're in the all of the above solution mode. Is there one area there that, given where you are with landfills, do you feel like, "We will probably have the most dominant position specifically here," or in treatment? Is there somewhere where you think about it that you think that you will shine unusually within the industry? I think for a large volume of jobs of low level, we've got a unique solution because we have both Subtitle D and Subtitle C landfills. We can be very solution agnostic and figure out the right home. Again, I think most of the material is going to have a right home. If you want complete assurance of destruction, incineration is the right option for you, and we have some of those capabilities. If you think about larger scale, lower level projects, if you're going to incinerate everything, it's not even feasible. It's going to take us 300 years to clean up the problem across society. You're going to need to use other assets to address this environmental problem. Okay. Growth as far as the eye can see in your. Yeah, I think we're kind of in the mindset of we're going to see 15%-20% annual growth, which could accelerate with a regulatory environment that puts more constraints on people. Okay. I think you talked about this in the last earnings call about expectations for that environmental services business to turn up in the second half of the year. Maybe you could talk a little bit about what are you seeing that gives you that confidence, and what are you seeing in the market? Just some of the other players talked about, hey, these turnarounds are not happening. They're not happening for a better reason because the clients are actually busy now as opposed to not being busy. How much visibility do you have to some of that, and what's your confidence that we come out here in a couple of quarters and be like, "Hey, yeah, we've turned the corner on that, and we're getting growth? Yeah. Some of it is the sales pipeline, and we know some jobs happen in a matter of days or weeks, but many jobs happen over the course of months. They get confirmed, then it gets scheduled to be treated. We see that sales pipeline building. Listen, we have a billion and a half plus position in the Recycling and Waste business in the manufacturing sector. We get really good view of demand there. We're starting to see service level increases. We're starting to see special waste move. Last year was a pretty tough year, and I think some of it was self-inflicted based on trade policy. You saw a lot of industrial companies just being paralyzed or putting all of their attention to their own supply chains, figuring out where do they re-domicile product, or how do they think about getting around the tariff regime. While I don't think we have perfect policy yet, I think we have more clarity, you're seeing jobs start to move, people making capital investment decisions on new factories and new plants. We start to see that momentum in the business, and that gives us confidence. Yeah. If you combine that with, if you take a look at some of the early signs of strength in the current year, by the time we get to the second half of 2025, we get into an easier comp. Last year, when you take a look at where we started to see the decline in that business really started in May. Q, the second half of 2025, easier comp than what we saw in the first half of 2025. Okay. Are you seeing from your client base the impact, like you talked about the supply chains? Are you seeing some of that reshoring happening and some of the investment in manufacturing and like, hey, this is starting, we're seeing in our client base, they're starting up, it's building, and from a macro perspective? Yeah, I think it's happening. I think we're still more in the planning and commitment phase than we are shovels in the ground phase. I think there's a lot of that work to come. Even think about things like fabs. Now people are thinking about reshoring those operations, which putting a foundry back in the United States 10 years ago would have been almost unthinkable. You're starting to think of people make real decisions just in terms of geopolitics and how much of that semiconductor industry is tied up in Taiwan. Those are all going to be good things for our business. Okay. One of the other things that came out last year was a discussion about the approach in the Environmental Solutions business to applying the solid waste playbook in terms of certain pricing and your efforts over there. How do you feel you are right now in terms of your approach to the market, in terms of matching the pricing with the demand and the competition and how that's played out? Yeah, I think if you go back to US Ecology closed at a 14% EBITDA margin, the last quarter before we took over in May of 2022, we've gotten that up to 25% EBITDA margin. Tremendous improvement. Team did an amazing job of grinding out some cost synergies, certainly improving the customer mix, and a lot of that was pricing because, again, we believe those assets have a ton of value, impossible to replicate. No amount of time or energy could get those assets re-permitted. That waste oftentimes moves and is priced in an ounce or a pound versus a yard or a ton. We believe, again, returns should be high in that business. The end of 2024, I think we hit a demand air pocket and the industry really turned. Listen, we missed it. We kept pricing at the same level. It's not that we were going to cut price, it's that we needed to rotate and modulate our expectations given the time and place in the market. We've lost a little bit of share. The team, we've worked through that in terms of controls and understanding that. We're not perfect yet. We're newer in that business, and we're going to get better and more sophisticated on making the right price-volume trade-off. We finally feel like in the first half here, we're finding the bottom, again, momentum in the second half. Listen, progress never is a straight line. It's always going to be a sawtooth, and there's going to be points of acceleration and points of pullback. I think if you look at the overall trend line, investors are going to be really satisfied with that outcome. The good news is, while there's plenty of pricing opportunities remaining in that business, it's not going to take price to get that margin back. You saw as the units exited our system. A good portion of which was economic driven. It falls through at a relatively high incremental margin because it's a higher fixed cost business. Conversely, as we see that economic activity improve and those units come back into the system, we would expect them to come back at a relatively higher incremental margin as well. That dovetails to the next question I was going to ask you specifically, is at the time that you bought this, you expected to be able to get it at some point to a 25% EBITDA margin business. What will it take to get to that point from where we are today, is it just volume? Maybe you could discuss about how that, do you have a vision of a timeframe when you think that's going to happen? Yeah, I think further volume from it. Listen, a lot of it is market recovery. As you start to see some volume in the system, I think you'll see continued momentum in that space. We'll look to think about 80-100 basis points of margin expansion in that business, if we can get there quicker, we will. Again, we're not trying to just change ourselves. We're trying to change an industry and get the mindset, just like solid waste and recycling was 25, 30 years ago. These assets deserve more and should have a high return because the regulatory challenges aren't getting easier. It's safety sensitive. We provide tremendous value, we're going to continue to put upward pressure on price. Got it. How do you think of a normalized growth rate for that part of the business right now? Obviously I understand that there's cycles. Maybe bottom of cycle, top of cycle, average of cycle. How do you think of that? Yeah. If you go back 40, 50 years, recycling solid waste has been a 50-100 basis point underlying unit growth business. Population growth over the same period has been 0.7%, it's very much of a population-driven environment. Where you think about the more industrial waste side, more like a 2%-3% more of GDP from underlying unit growth. Over the next 5-10 years, I like the upside on that number because of the reshoring and some of the activity, PFAS and some of the other drivers in that business, that I think it takes it to a higher underlying growth rate over that period. I'm going to step back a little bit from a macro perspective as we're talking like industrial is obviously a little bit more of a gauge on the macro. You've also, on the solid waste business, it sounded like you're starting to see a little bit more of a turn is what it sounded like from the first quarter. Your management, you guys tend to be a little bit more conservative, and I pay attention to the tone, and it sounded like the tone was a little bit better last quarter. Did I misread you? Or is that really what you're feeling like we're starting to see a turn macro-wise that's manifesting in the solid waste as well, for some of maybe the C&D or other things? We're really in our fourth year across the industry in Recycling and Waste of a negative demand environment, it's been driven by construction and manufacturing. Those have been the holes in the menu. For us, those are both high single digits as a percentage of revenue. I think that manufacturing piece I talked about, we are starting to see some momentum, you're starting to see, again, the large container. We've got a great position with our manufacturers, we just saw over the last three or four years, plants going down from five pulls a week to four pulls a week to three pulls a week, you're starting to see those service levels come up, which is a great sign. Special waste is a good barometer, you're starting to see momentum on that front. Even commercial construction, in addition to the data center craze, which is a whole different kettle of fish. Commercial construction, I think, is showing some good momentum, more west of the Mississippi than east of the Mississippi. The hole in the menu is still residential construction, which I think we now probably have three to four million homes of pent-up demand beyond the normal 1.4, 1.5 million we should be building as a society. I'm hugely bullish in the long term on residential housing. I'm very bearish in the short term because until the 10-year comes down and mortgage rates change, it's just the pragmatism of somebody who's in a 3% or 4% mortgage is not going to upgrade their home and jump into a 7% mortgage. We need some material movement there over time. Again, I think that will be a growth driver for the business. It will be good, we're going to have to be a little more patient on that one. Yeah. If you take a look just at the momentum in the business, when you take a look at volume performance by line of business, every single line of business improves sequentially with the exception of residential. Landfill's positive. Small container is essentially flat with visibility to turning positive by the end of the year. That's what gives us some optimism about the fact that we are on an upward trajectory. Okay, great. I want to jump back to that margin discussion. I think you're targeting something like 60-70 basis points of margin, I think, in general. First quarter was better than that underlying. 2025 was better than that. We're looking more like 90, I think, recently. Can you really outperform that more on a regular basis with everything that you're seeing in front of you and some of the levers that you're seeing? Are you just, "Hey, we think this is a comfortable baseline, but we see room to improve on that? Yeah. We talk about 30-50 basis points of margin expansion a year across the cycle. This year, we're facing some headwinds of pretty tough comps of some very profitable one-time cleanup jobs last year on the fire and the hurricane. The underlying business is delivering that this year, and that's going to be our expectation. Could we do a little better than that going forward with AI and some of the other things we talked about? Potentially. Now, the business isn't getting easier either. Landfills are not getting cheaper to manage and operate. We want to be mindful that there's also cost headwinds are going to be taken on. We're staying there at 30-50, and if we can beat that, we will. Okay, great. Maybe touch a little on the polymer facilities and where we are with that as I think there was one more that you guys took a pause on in terms of construction. Is that waiting for the pricing in the industry to come back for the end market or can you describe what's going on over there? We have two operating today, one in Las Vegas and one in Indianapolis, and then a third that's going to open in Allentown, Pennsylvania. We talked about four over time. We're pausing on the fourth. I ultimately think we'll get there. One of the reasons we're pausing is we think that the capacity of the current three is actually bigger than we thought. We're actually able to operate at peak, past the nameplate capacity of the assets. If we can get most of the same work done in three sites versus four sites, that's certainly going to be good from a return standpoint. The spread has really held up, even though plastics has been a very challenged environment, because we're providing something that nobody else can do, which is a domestically sourced, curbside, circular solution where this water bottle you could buy in L.A. or Las Vegas, and 120 days later, the exact same molecules could be back on a shelf in a water bottle. We could sell out each of the three facilities three or four times over. From a demand standpoint, it's the supply side we'll want to be sure we get, because what we don't want to do is build a facility and then be subject to third-party supply, and that's the risk. That's why most of these recyclers have gotten into trouble. It's not really on the technology side, it's the supply side. That's what we're mindful of. Okay, great. Thank you for clarifying that. Maybe you could talk a little bit about M&A and opportunities and compare what you're seeing out there in your pipeline for solid waste versus Environmental Solutions. Do you equally have an equal appetite for both sides of the business in terms of M&A, or how do you think of that? Yeah. I get this question all the time. If you got a dollar, where do you put it? It's like, which one of my kids do I love more? I love both. We're going to invest in both, and we're not capital constrained. Really, we think about two things. One, does it meet our strategic filter? Are we the natural owner of this? Can we create value? Our financial filter, double-digit cash on cash on levered returns. That's how we think about it. We might constrain ourselves for a period. Environmental Solutions, we've probably foregone a few small opportunities over the last couple of years as we've done a lot of this internal integration work that Del talked about. Where in Recycling and Waste, that is a well-oiled, well-running machine where we can buy a company, tuck it in, and it's 30 days later, you don't even know we bought it. We're really, really good at that playbook because we're going to do 30 deals this year. We're very good at M&A and good at the integration portion. I'd say if you look over the next five years, it's probably an 80/20 mix of Recycling and Waste, and then 20% Environmental Solutions because we have opportunities on both fronts. I think you did $1.1 billion in acquisitions in 2025. Is that right? Is the pipeline there for that level to continue into the future? Just in general. Yes. We feel good about it. Now, we'll probably set a boring target next year of another $500 million and try to beat it. The risk, obviously, with setting a target at M&A is you could get that number tomorrow. It's just are you going to create value or not when you buy it? The pipeline looks robust, and I think what's happened over the last really three to five years is the moat in this business has always been post-collection infrastructure. It's been the recycling centers and landfills, which are hard to permit, expensive to build. Digital has become the second moat. I mentioned, we started talking about AI and routing. We're building all these routes. Whether I roll that technology across 150 routes, 1,500 routes, or 15,000 routes, it's the same underlying fixed cost. When we buy companies, we roll them right into Workday, we roll them right into Salesforce, right into all of these investments that we've already made. That's a scale play, and that's where we think we have an advantage, and that's what's supporting our M&A pipeline. Okay. We're coming towards the end of this session. I just wanted to ask you, when you think out 5-10 years in this industry, what do you think this is going to look like 5-10 years from now? We're sitting here, you and I are in the same seats, a little grayer, a little older in 2036. What's going to be different about the industry that maybe we wouldn't have thought of or the average person wouldn't have thought of at this point? Well, I hope we are dramatically safer. I think the industry, back to technology, one of my big disappointments has been how relatively poor the safety technology has been in this industry. Now, I think there's been huge advancements in the last five years, but things that you would find a table stakes in a Honda Civic or a Toyota Camry don't show up on a $400,000 truck. For me, that's completely unacceptable. I think you're going to see far more innovation on the safety side from an equipment standpoint, which is going to be great for our frontline colleagues. I think from a structure standpoint, I think you're going to see more concentration, but there's still going to be plenty of small, medium-sized businesses. There's many very well-run, privately held businesses that I expect to stay independent for a long period of time. I think you're going to see returns in the business continue to go up and not down because, again, the value of our work is very, very important, and I think we're going to continue to price for that value. Okay, great. Thank you very much. I appreciate it. Thank you.

Speaker 3: Thank you, everybody. We're moving on to our next company panel. I want to welcome Republic Services, Jon Vander Ark and Brian DelGhiaccio, the CEO and CFO, respectively. Thank you very much for joining. Thank you, everybody. thank you everybody We're moving on to our next company panel. we're moving on to our next company panel I want to welcome Republic Services, Jon Vander Ark and Brian DelGhiaccio, the CEO and CFO, respectively. i want to welcome republic services jon vander ark and brian delghiaccio the ceo and cfo respectively Thank you very much for joining. thank you very much for joining

Speaker 2: Good to be here. Good to be here. good to be here

Speaker 3: Really appreciate it. I'm going to just ask you some general industry questions, topical questions, and some specific questions for Republic. I think you guys are veterans at this, so it shouldn't be anything that you haven't probably heard from a lot of people, but I thought that it'd be very interesting to just frame the dialogue for today. Really appreciate it. really appreciate it I'm going to just ask you some general industry questions, topical questions, and some specific questions for Republic. i'm going to just ask you some general industry questions topical questions and some specific questions for republic I think you guys are veterans at this, so it shouldn't be anything that you haven't probably heard from a lot of people, but I thought that it'd be very interesting to just frame the dialogue for today. i think you guys are veterans at this so it shouldn't be anything that you haven't probably heard from a lot of people but i thought that it'd be very interesting to just frame the dialogue for today I was going to start out, just what's your view on the current state of solid waste? Where are we? What inning are we in within the whole industry in terms of maturity and, in general, in terms of the ability to enhance the business, both externally with acquisitions and internally in terms of moving the margins forward? Where do you think we're at? I was going to start out, just what's your view on the current state of solid waste? i was going to start out just what's your view on the current state of solid waste Where are we? where are we What inning are we in within the whole industry in terms of maturity and, in general, in terms of the ability to enhance the business, both externally with acquisitions and internally in terms of moving the margins forward? what inning are we in within the whole industry in terms of maturity and in general in terms of the ability to enhance the business both externally with acquisitions and internally in terms of moving the margins forward Where do you think we're at? where do you think we're at

Speaker 2: Yeah, I'd say we're mid-innings. I think the industry has made a ton of progress over the last 25, 30 years. Think about what was true 30 years ago, right? Vertical integration wasn't common knowledge or well understood to be how to drive returns and value. Hauling companies and landfills used to be largely separate. Recycling was a side project 30 years ago. Now it's become very core to the business. You think about from a returns standpoint. EBITDA margins have gone from the high teens into the low 30s. Yeah, I'd say we're mid-innings. yeah i'd say we're mid-innings I think the industry has made a ton of progress over the last 25, 30 years. i think the industry has made a ton of progress over the last 25 30 years Think about what was true 30 years ago, right? think about what was true 30 years ago right Vertical integration wasn't common knowledge or well understood to be how to drive returns and value. vertical integration wasn't common knowledge or well understood to be how to drive returns and value Hauling companies and landfills used to be largely separate. hauling companies and landfills used to be largely separate Recycling was a side project 30 years ago. recycling was a side project 30 years ago Now it's become very core to the business. now it's become very core to the business You think about from a returns standpoint. you think about from a returns standpoint EBITDA margins have gone from the high teens into the low 30s. ebitda margins have gone from the high teens into the low 30s Better industry structure, substantially better industry conduct. Lots of positives, but I'd say it's only mid-innings because I think about technology, and this is an industry that by and large has been a laggard, not a leader, in applying technology to their business. I think we've made a lot of progress. You think about AI coming down the pike and going to be transformational, I think, almost every aspect of the business. I think there is more room to improve in terms of performance of the business, safety, customer service delivery. Industry structure will continue to get better through acquisitions. Ultimately, I think returns have plenty of room to go up, not down. Better industry structure, substantially better industry conduct. better industry structure substantially better industry conduct Lots of positives, but I'd say it's only mid-innings because I think about technology, and this is an industry that by and large has been a laggard, not a leader, in applying technology to their business. lots of positives but i'd say it's only mid-innings because i think about technology and this is an industry that by and large has been a laggard not a leader in applying technology to their business I think we've made a lot of progress. i think we've made a lot of progress You think about AI coming down the pike and going to be transformational, I think, almost every aspect of the business. you think about ai coming down the pike and going to be transformational i think almost every aspect of the business I think there is more room to improve in terms of performance of the business, safety, customer service delivery. i think there is more room to improve in terms of performance of the business safety customer service delivery Industry structure will continue to get better through acquisitions. industry structure will continue to get better through acquisitions Ultimately, I think returns have plenty of room to go up, not down. ultimately i think returns have plenty of room to go up not down

Speaker 3: Okay. Maybe we could just double-click on that a little bit more in terms of the technology. Where are we today versus where you think we're going to be in the future, say, three to five years from now, just in terms of what you're doing with AI now, what are some of the initiatives? How should Republic look different or incrementally different in several years from now? Okay. okay Maybe we could just double-click on that a little bit more in terms of the technology. maybe we could just double-click on that a little bit more in terms of the technology Where are we today versus where you think we're going to be in the future, say, three to five years from now, just in terms of what you're doing with AI now, what are some of the initiatives? where are we today versus where you think we're going to be in the future say three to five years from now just in terms of what you're doing with ai now what are some of the initiatives How should Republic look different or incrementally different in several years from now? how should republic look different or incrementally different in several years from now

Speaker 2: I think that we've done a really good job of automating the business. AI allows us to, in many ways, transform the business. Customer service, take 11 million calls. I think we're going to be taking half or less of those calls over the next three to four to five years at the longest. Because we're going to serve up information in our customers' hands. I think that we've done a really good job of automating the business. i think that we've done a really good job of automating the business AI allows us to, in many ways, transform the business. ai allows us to in many ways transform the business Customer service, take 11 million calls. customer service take 11 million calls I think we're going to be taking half or less of those calls over the next three to four to five years at the longest. i think we're going to be taking half or less of those calls over the next three to four to five years at the longest Because we're going to serve up information in our customers' hands. because we're going to serve up information in our customers' hands It doesn't mean they can't call us, it's just we're going to get them the information in their hands and the way they want to get it, faster, better, cheaper on that front. How we route the business. Today, we have very talented logistics analysts who build and manage routes throughout the day. [But] there is no way that somebody can optimize routes across 15,000+ routes we're going to run today to understand the exact sequence we should run those routes. It doesn't mean they can't call us, it's just we're going to get them the information in their hands and the way they want to get it, faster, better, cheaper on that front. it doesn't mean they can't call us it's just we're going to get them the information in their hands and the way they want to get it faster better cheaper on that front How we route the business. how we route the business Today, we have very talented logistics analysts who build and manage routes throughout the day. today we have very talented logistics analysts who build and manage routes throughout the day [But] there is no way that somebody can optimize routes across 15,000+ routes we're going to run today to understand the exact sequence we should run those routes. [but] there is no way that somebody can optimize routes across 15,000+ routes we're going to run today to understand the exact sequence we should run those routes Disposal optimization. Every day, we make the decision, do we go to one of our competitors' transfer stations, or do we drive directly to our recycling center landfill? The trade-off, obviously, if you get more route time, if you go to the competitor's transfer station, that's a higher-cost disposal option. Again, we make good decisions, the human mind has limitations, that's where AI, we think, is going to be hugely transformative. How we price customers. Understanding the unique fingerprint of each customer, their service history, their relationship with us, sending out a bespoke price that gets them to pay a lot, but stay, ultimately to stay. Lots of headroom there as well. Disposal optimization. disposal optimization Every day, we make the decision, do we go to one of our competitors' transfer stations, or do we drive directly to our recycling center landfill? every day we make the decision do we go to one of our competitors' transfer stations or do we drive directly to our recycling center landfill The trade-off, obviously, if you get more route time, if you go to the competitor's transfer station, that's a higher-cost disposal option. the trade-off obviously if you get more route time if you go to the competitor's transfer station that's a higher-cost disposal option Again, we make good decisions, the human mind has limitations, that's where AI, we think, is going to be hugely transformative. again we make good decisions the human mind has limitations that's where ai we think is going to be hugely transformative How we price customers. how we price customers Understanding the unique fingerprint of each customer, their service history, their relationship with us, sending out a bespoke price that gets them to pay a lot, but stay, ultimately to stay. understanding the unique fingerprint of each customer their service history their relationship with us sending out a bespoke price that gets them to pay a lot but stay ultimately to stay Lots of headroom there as well. lots of headroom there as well

Speaker 3: [So] within that kind of vision, where are you right now? Of the things you're discussing in terms of route automation and customer service, are you in the beginning portion of that, or are you like, "Hey, we're already starting to roll this out with AI"? How is that working? [So] within that kind of vision, where are you right now? [so] within that kind of vision where are you right now Of the things you're discussing in terms of route automation and customer service, are you in the beginning portion of that, or are you like, "Hey, we're already starting to roll this out with AI"? of the things you're discussing in terms of route automation and customer service are you in the beginning portion of that or are you like "hey we're already starting to roll this out with ai" How is that working? how is that working

Speaker 2: Yeah. We've obviously gone through RISE and we've automated all of our routes and digitized them. We're in the design phase, really, and moving quickly into the pilot phase around AI for routing, and you'll see that scale next year, and then you'll see that roll out in a big way or be mostly rolled out by 2028 on that front. Pricing, we're already there, we're already using it, and that has just a compounding benefit, too, to that. Customer service, and really all of the back-office functions, we're still pretty early days, but we're starting to take out some heads and automate the work, but we've got plenty of room in front of us as well. Yeah. yeah We've obviously gone through RISE and we've automated all of our routes and digitized them. we've obviously gone through rise and we've automated all of our routes and digitized them We're in the design phase, really, and moving quickly into the pilot phase around AI for routing, and you'll see that scale next year, and then you'll see that roll out in a big way or be mostly rolled out by 2028 on that front. we're in the design phase really and moving quickly into the pilot phase around ai for routing and you'll see that scale next year and then you'll see that roll out in a big way or be mostly rolled out by 2028 on that front Pricing, we're already there, we're already using it, and that has just a compounding benefit, too, to that. pricing we're already there we're already using it and that has just a compounding benefit too to that Customer service, and really all of the back-office functions, we're still pretty early days, but we're starting to take out some heads and automate the work, but we've got plenty of room in front of us as well. customer service and really all of the back-office functions we're still pretty early days but we're starting to take out some heads and automate the work but we've got plenty of room in front of us as well

Speaker 3: Just, this is a little more of a numbers question, I guess, but this may be Brian, then I'll end up with you. The company talked about getting about $100 million of EBITDA benefit by 2028 from AI, increased AI usage. You said routing, pricing, customer service. Could you talk a little bit more, is this proportionally the same kind of opportunity both in the legacy U.S. Ecology business and the solid waste business? In terms of when I think about it, is routing really the biggest bucket you could get opportunity and then pricing and then customer service? Or could you just order, maybe rank them in terms of materiality and how much materiality? Just, this is a little more of a numbers question, I guess, but this may be Brian, then I'll end up with you. just this is a little more of a numbers question i guess but this may be brian then i'll end up with you The company talked about getting about $100 million of EBITDA benefit by 2028 from AI, increased AI usage. the company talked about getting about $100 million of ebitda benefit by 2028 from ai increased ai usage You said routing, pricing, customer service. you said routing pricing customer service Could you talk a little bit more, is this proportionally the same kind of opportunity both in the legacy U.S. could you talk a little bit more is this proportionally the same kind of opportunity both in the legacy u.s Ecology business and the solid waste business? ecology business and the solid waste business In terms of when I think about it, is routing really the biggest bucket you could get opportunity and then pricing and then customer service? in terms of when i think about it is routing really the biggest bucket you could get opportunity and then pricing and then customer service Or could you just order, maybe rank them in terms of materiality and how much materiality? or could you just order maybe rank them in terms of materiality and how much materiality

Speaker 1: Yeah. Ranked, it would start with routing. That is our largest opportunity, followed by pricing and then the customer service center. More broadly, when you think about where this is going to impact, this is almost exclusively in Recycling and Waste to begin. Okay? The opportunity exists in Environmental Solutions. It's just there's some foundational work that we need to do before we can then move to that next step, and we are now on a common platform within that business. There are other portions of technology that we're going to bring to that business, which is going to unlock value. We can move to that next phase, which will be AI, there's plenty of opportunity on that side of the business. Yeah. yeah Ranked, it would start with routing. ranked it would start with routing That is our largest opportunity, followed by pricing and then the customer service center. that is our largest opportunity followed by pricing and then the customer service center More broadly, when you think about where this is going to impact, this is almost exclusively in Recycling and Waste to begin. more broadly when you think about where this is going to impact this is almost exclusively in recycling and waste to begin Okay? okay The opportunity exists in Environmental Solutions. the opportunity exists in environmental solutions It's just there's some foundational work that we need to do before we can then move to that next step, and we are now on a common platform within that business. it's just there's some foundational work that we need to do before we can then move to that next step and we are now on a common platform within that business There are other portions of technology that we're going to bring to that business, which is going to unlock value. there are other portions of technology that we're going to bring to that business which is going to unlock value We can move to that next phase, which will be AI, there's plenty of opportunity on that side of the business. we can move to that next phase which will be ai there's plenty of opportunity on that side of the business

Speaker 3: Okay, to make sure I understand it right. For right now, we're talking about the solid waste business. Okay, to make sure I understand it right. okay to make sure i understand it right For right now, we're talking about the solid waste business. for right now we're talking about the solid waste business We're going to have certain investments that you're going to be making in the industrial waste business, after which you feel like you're going to be able to bring AI over to that. We're going to have certain investments that you're going to be making in the industrial waste business, after which you feel like you're going to be able to bring AI over to that. we're going to have certain investments that you're going to be making in the industrial waste business after which you feel like you're going to be able to bring ai over to that

Speaker 2: Absolutely. Yeah, I would say this is where we're investing at scale. We're already using it in plenty of places around the Environmental Solutions business as well. Think about how we do waste profiling. Today, that's a pretty manual process back and forth with customers. AI is transformative in terms of how we evaluate the profile. We help customers fill in information. We can flag safety issues on materials that might be challenging to put together, we're getting a faster, better product out with customers. It just doesn't have the same scale benefits that Recycling and Waste will have yet. Because of Brian's point, we're doing the foundational work in that business. Absolutely. absolutely Yeah, I would say this is where we're investing at scale. yeah i would say this is where we're investing at scale We're already using it in plenty of places around the Environmental Solutions business as well. we're already using it in plenty of places around the environmental solutions business as well Think about how we do waste profiling. think about how we do waste profiling Today, that's a pretty manual process back and forth with customers. today that's a pretty manual process back and forth with customers AI is transformative in terms of how we evaluate the profile. ai is transformative in terms of how we evaluate the profile We help customers fill in information. we help customers fill in information We can flag safety issues on materials that might be challenging to put together, we're getting a faster, better product out with customers. we can flag safety issues on materials that might be challenging to put together we're getting a faster better product out with customers It just doesn't have the same scale benefits that Recycling and Waste will have yet. it just doesn't have the same scale benefits that recycling and waste will have yet Because of Brian's point, we're doing the foundational work in that business. because of brian's point we're doing the foundational work in that business

Speaker 3: Okay. These are big buckets you talked about in terms of the AI aspect of benefits, a lot of times companies, you think of large buckets, there tends to be small projects where you can go ahead and enhance the overall efficiencies of the business. Are there some of those that, what gets the air time on earnings calls? Okay. okay These are big buckets you talked about in terms of the AI aspect of benefits, a lot of times companies, you think of large buckets, there tends to be small projects where you can go ahead and enhance the overall efficiencies of the business. these are big buckets you talked about in terms of the ai aspect of benefits a lot of times companies you think of large buckets there tends to be small projects where you can go ahead and enhance the overall efficiencies of the business Are there some of those that, what gets the air time on earnings calls? are there some of those that what gets the air time on earnings calls which is where most of the investors here are like, "We're going to get routing and customer service and pricing." Are there other things that are like, hey, back office-wise, there's other stuff that's over here that are pretty cool that over the next few years, you actually might hear someone talk about that more because they're going to add up. Are there other things you want to point out, [Jon]? which is where most of the investors here are like, "We're going to get routing and customer service and pricing." Are there other things that are like, hey, back office-wise, there's other stuff that's over here that are pretty cool that over the next few years, you actually might hear someone talk about that more because they're going to add up. which is where most of the investors here are like "we're going to get routing and customer service and pricing." are there other things that are like hey back office-wise there's other stuff that's over here that are pretty cool that over the next few years you actually might hear someone talk about that more because they're going to add up Are there other things you want to point out, [Jon]? are there other things you want to point out [jon]

Speaker 2: Yeah, we have a T-shaped strategy. The vertical portion are the big projects that we talked about, and there'll be more, but those are things at scale that we're putting in tons of resources across both our field-based teams and our central teams to get that done. There's a horizontal aspect to the strategy, which is put the tools in the hands of people and let them innovate. Yeah, we have a T-shaped strategy. yeah we have a t-shaped strategy The vertical portion are the big projects that we talked about, and there'll be more, but those are things at scale that we're putting in tons of resources across both our field-based teams and our central teams to get that done. the vertical portion are the big projects that we talked about and there'll be more but those are things at scale that we're putting in tons of resources across both our field-based teams and our central teams to get that done There's a horizontal aspect to the strategy, which is put the tools in the hands of people and let them innovate. there's a horizontal aspect to the strategy which is put the tools in the hands of people and let them innovate A good example is our head of internal audit has Copilot. No one asked her to do it, but she's built a series of agents and taken heads out of her organization that are doing the work that internal auditors would have done a year ago. Again, there was no mandate, there was just innovation. We're trying to get the tools in the hands of our people, and we're going to find great ideas, some of which will make us incrementally better and more efficient, and some of which will probably be bigger ideas that we end up scaling. A good example is our head of internal audit has Copilot. a good example is our head of internal audit has copilot No one asked her to do it, but she's built a series of agents and taken heads out of her organization that are doing the work that internal auditors would have done a year ago. no one asked her to do it but she's built a series of agents and taken heads out of her organization that are doing the work that internal auditors would have done a year ago Again, there was no mandate, there was just innovation. again there was no mandate there was just innovation We're trying to get the tools in the hands of our people, and we're going to find great ideas, some of which will make us incrementally better and more efficient, and some of which will probably be bigger ideas that we end up scaling. we're trying to get the tools in the hands of our people and we're going to find great ideas some of which will make us incrementally better and more efficient and some of which will probably be bigger ideas that we end up scaling

Speaker 1: I would say there have been opportunities, and there will continue to be opportunities that are broader than AI, just simple automation. Very quietly in the background, we've completely replaced all of our core systems, our entire ERP platform, which has really allowed us to automate, leading to standardization, ultimately centralization of certain tasks and functions. We've already driven out about 20 basis points of revenue from a cost perspective, somewhat ratably and in a phased approach. We'll continue to sit there and execute and monetize those opportunities. I would say there have been opportunities, and there will continue to be opportunities that are broader than AI, just simple automation. i would say there have been opportunities and there will continue to be opportunities that are broader than ai just simple automation Very quietly in the background, we've completely replaced all of our core systems, our entire ERP platform, which has really allowed us to automate, leading to standardization, ultimately centralization of certain tasks and functions. very quietly in the background we've completely replaced all of our core systems our entire erp platform which has really allowed us to automate leading to standardization ultimately centralization of certain tasks and functions We've already driven out about 20 basis points of revenue from a cost perspective, somewhat ratably and in a phased approach. we've already driven out about 20 basis points of revenue from a cost perspective somewhat ratably and in a phased approach We'll continue to sit there and execute and monetize those opportunities. we'll continue to sit there and execute and monetize those opportunities

Speaker 3: When you think about it, I guess from a hiring perspective, when you think just operationally, as you start to implement more of this, do you think of it as just, hey, we don't necessarily replace attrition so quickly? Or is this a matter of we see buckets of, hey, just straight out reduction? How do you approach that? When you think about it, I guess from a hiring perspective, when you think just operationally, as you start to implement more of this, do you think of it as just, hey, we don't necessarily replace attrition so quickly? when you think about it i guess from a hiring perspective when you think just operationally as you start to implement more of this do you think of it as just hey we don't necessarily replace attrition so quickly Or is this a matter of we see buckets of, hey, just straight out reduction? or is this a matter of we see buckets of hey just straight out reduction How do you approach that? how do you approach that

Speaker 2: There'll be some of both. I'd say my broader vision with technology is not to replace people, it's to empower them. We are a frontline workforce that gets out every day and largest labor force are drivers, and they're not just driving, they're operating. They're getting out and doing gates, locks, lids. I want technology to help empower them. I want to be more efficient and then ultimately, I need fewer drivers. Most of that will come out through attrition. There'll be some of both. there'll be some of both I'd say my broader vision with technology is not to replace people, it's to empower them. i'd say my broader vision with technology is not to replace people it's to empower them We are a frontline workforce that gets out every day and largest labor force are drivers, and they're not just driving, they're operating. we are a frontline workforce that gets out every day and largest labor force are drivers and they're not just driving they're operating They're getting out and doing gates, locks, lids. they're getting out and doing gates locks lids I want technology to help empower them. i want technology to help empower them I want to be more efficient and then ultimately, I need fewer drivers. i want to be more efficient and then ultimately i need fewer drivers Most of that will come out through attrition. most of that will come out through attrition We will have opportunities in the back office where there's just activities or functions that we don't need any longer, and hope many of those colleagues will try to get into new opportunities, and others maybe won't be a right fit for the enterprise. We're not going to be in a mass layoff zone. We're going to be in a, we're driving efficiency and empowering our people and hopefully growing the business. That allows us to do more with less. We will have opportunities in the back office where there's just activities or functions that we don't need any longer, and hope many of those colleagues will try to get into new opportunities, and others maybe won't be a right fit for the enterprise. we will have opportunities in the back office where there's just activities or functions that we don't need any longer and hope many of those colleagues will try to get into new opportunities and others maybe won't be a right fit for the enterprise We're not going to be in a mass layoff zone. we're not going to be in a mass layoff zone We're going to be in a, we're driving efficiency and empowering our people and hopefully growing the business. we're going to be in a we're driving efficiency and empowering our people and hopefully growing the business That allows us to do more with less. that allows us to do more with less

Speaker 3: Okay. I just want to step back to that baseball analogy. You said we're in the mid-innings. Would you say the beginning of the mid-innings, the middle of the mid-innings, or the later mid-innings? Okay. okay I just want to step back to that baseball analogy. i just want to step back to that baseball analogy You said we're in the mid-innings. you said we're in the mid-innings Would you say the beginning of the mid-innings, the middle of the mid-innings, or the later mid-innings? would you say the beginning of the mid-innings the middle of the mid-innings or the later mid-innings

Speaker 2: I'd say there's more upside than downside. I think, listen, people talk about the pricing element of the business, and it's getting expensive and everything else. Think about what the industry does. We drive a truck in the residential side of the business 10 times a month across somebody's home, and we pick up the container, and we either take it to a recycling center, which is $60 million, $70 million, $80 million, and we repurpose that material, or we take it to a very modern landfill where oftentimes we're going to produce energy out of that. I'd say there's more upside than downside. i'd say there's more upside than downside I think, listen, people talk about the pricing element of the business, and it's getting expensive and everything else. i think listen people talk about the pricing element of the business and it's getting expensive and everything else Think about what the industry does. think about what the industry does We drive a truck in the residential side of the business 10 times a month across somebody's home, and we pick up the container, and we either take it to a recycling center, which is $60 million, $70 million, $80 million, and we repurpose that material, or we take it to a very modern landfill where oftentimes we're going to produce energy out of that. we drive a truck in the residential side of the business 10 times a month across somebody's home and we pick up the container and we either take it to a recycling center which is $60 million, $70 million $80 million and we repurpose that material or we take it to a very modern landfill where oftentimes we're going to produce energy out of that By the way, we're renting you a piece of real estate forever, and we're doing all that for less than your Starbucks bill a month. There is tremendous upside in the business for the value that we deliver, and I think, again, because the industry's been a relatively late adopter of technology, a lot of these AI tools are going to be things that have very transformational effect on the business. By the way, we're renting you a piece of real estate forever, and we're doing all that for less than your Starbucks bill a month. by the way we're renting you a piece of real estate forever and we're doing all that for less than your starbucks bill a month There is tremendous upside in the business for the value that we deliver, and I think, again, because the industry's been a relatively late adopter of technology, a lot of these AI tools are going to be things that have very transformational effect on the business. there is tremendous upside in the business for the value that we deliver and i think again because the industry's been a relatively late adopter of technology a lot of these ai tools are going to be things that have very transformational effect on the business

Speaker 3: Mm-hmm. Okay. I want to pivot a little bit to your Environmental Solutions business. Very timely, we're following up a little on, we had a PFAS panel earlier on, but I thought maybe you could just discuss for investors how investors should think of the PFAS opportunity specifically for Republic. Maybe go over the various categories of services that you provide that would capitalize on that PFAS opportunity. Where do you see the demand? When you think of it for yourself, is there a way with what we do in PFAS today, with all the numbers getting bandied about, how do you think about that market? Mm-hmm. mm-hmm Okay. okay I want to pivot a little bit to your Environmental Solutions business. i want to pivot a little bit to your environmental solutions business Very timely, we're following up a little on, we had a PFAS panel earlier on, but I thought maybe you could just discuss for investors how investors should think of the PFAS opportunity specifically for Republic. very timely we're following up a little on we had a pfas panel earlier on but i thought maybe you could just discuss for investors how investors should think of the pfas opportunity specifically for republic Maybe go over the various categories of services that you provide that would capitalize on that PFAS opportunity. maybe go over the various categories of services that you provide that would capitalize on that pfas opportunity Where do you see the demand? where do you see the demand When you think of it for yourself, is there a way with what we do in PFAS today, with all the numbers getting bandied about, how do you think about that market? when you think of it for yourself is there a way with what we do in pfas today with all the numbers getting bandied about how do you think about that market

Speaker 2: I thought the panel did a good job of covering the opportunity. I think it's a very meaningful opportunity that is going to play out over the course of two to three decades minimum. I think the pace at which we kind of get to peak run rate is going to be regulatory driven. Right now, you're seeing, you heard Clean Harbors talk and ourselves, we're going to do $100 million of PFAS work this year. I thought the panel did a good job of covering the opportunity. i thought the panel did a good job of covering the opportunity I think it's a very meaningful opportunity that is going to play out over the course of two to three decades minimum. i think it's a very meaningful opportunity that is going to play out over the course of two to three decades minimum I think the pace at which we kind of get to peak run rate is going to be regulatory driven. i think the pace at which we kind of get to peak run rate is going to be regulatory driven Right now, you're seeing, you heard Clean Harbors talk and ourselves, we're going to do $100 million of PFAS work this year. right now you're seeing you heard clean harbors talk and ourselves we're going to do $100 million of pfas work this year Some of that shows up in our Environmental Solutions P&L, and some of that shows up in our Recycling and Waste P&L because we take low-level PFAS as special waste, and we really believe in a range of solutions or outcomes for our customers. There's things that absolutely have a home in incineration, and low level has a home in a solid waste landfill, and there's a lot of opportunities in between in terms of hazardous waste landfill, deep well, et cetera. We're in the all of the above solution mode. Some of that shows up in our Environmental Solutions P&L, and some of that shows up in our Recycling and Waste P&L because we take low-level PFAS as special waste, and we really believe in a range of solutions or outcomes for our customers. some of that shows up in our environmental solutions p&l and some of that shows up in our recycling and waste p&l because we take low-level pfas as special waste and we really believe in a range of solutions or outcomes for our customers There's things that absolutely have a home in incineration, and low level has a home in a solid waste landfill, and there's a lot of opportunities in between in terms of hazardous waste landfill, deep well, et cetera. there's things that absolutely have a home in incineration and low level has a home in a solid waste landfill and there's a lot of opportunities in between in terms of hazardous waste landfill deep well et cetera We're in the all of the above solution mode. we're in the all of the above solution mode

Speaker 3: Is there one area there that, given where you are with landfills, do you feel like, "We will probably have the most dominant position specifically here," or in treatment? Is there somewhere where you think about it that you think that you will shine unusually within the industry? Is there one area there that, given where you are with landfills, do you feel like, "We will probably have the most dominant position specifically here," or in treatment? is there one area there that given where you are with landfills do you feel like "we will probably have the most dominant position specifically here," or in treatment Is there somewhere where you think about it that you think that you will shine unusually within the industry? is there somewhere where you think about it that you think that you will shine unusually within the industry

Speaker 2: I think for a large volume of jobs of low level, we've got a unique solution because we have both Subtitle D and Subtitle C landfills. We can be very solution agnostic and figure out the right home. Again, I think most of the material is going to have a right home. If you want complete assurance of destruction, incineration is the right option for you, and we have some of those capabilities. If you think about larger scale, lower level projects, if you're going to incinerate everything, it's not even feasible. It's going to take us 300 years to clean up the problem across society. You're going to need to use other assets to address this environmental problem. I think for a large volume of jobs of low level, we've got a unique solution because we have both Subtitle D and Subtitle C landfills. i think for a large volume of jobs of low level we've got a unique solution because we have both subtitle d and subtitle c landfills We can be very solution agnostic and figure out the right home. we can be very solution agnostic and figure out the right home Again, I think most of the material is going to have a right home. again i think most of the material is going to have a right home If you want complete assurance of destruction, incineration is the right option for you, and we have some of those capabilities. if you want complete assurance of destruction incineration is the right option for you and we have some of those capabilities If you think about larger scale, lower level projects, if you're going to incinerate everything, it's not even feasible. if you think about larger scale lower level projects if you're going to incinerate everything it's not even feasible It's going to take us 300 years to clean up the problem across society. it's going to take us 300 years to clean up the problem across society You're going to need to use other assets to address this environmental problem. you're going to need to use other assets to address this environmental problem

Speaker 3: Okay. Growth as far as the eye can see in your. Okay. okay Growth as far as the eye can see in your. growth as far as the eye can see in your

Speaker 2: Yeah, I think we're kind of in the mindset of we're going to see 15%-20% annual growth, which could accelerate with a regulatory environment that puts more constraints on people. Yeah, I think we're kind of in the mindset of we're going to see 15%-20% annual growth, which could accelerate with a regulatory environment that puts more constraints on people. yeah i think we're kind of in the mindset of we're going to see 15%-20% annual growth which could accelerate with a regulatory environment that puts more constraints on people

Speaker 3: Okay. I think you talked about this in the last earnings call about expectations for that environmental services business to turn up in the second half of the year. Maybe you could talk a little bit about what are you seeing that gives you that confidence, and what are you seeing in the market? Just some of the other players talked about, hey, these turnarounds are not happening. They're not happening for a better reason because the clients are actually busy now as opposed to not being busy. How much visibility do you have to some of that, and what's your confidence that we come out here in a couple of quarters and be like, "Hey, yeah, we've turned the corner on that, and we're getting growth? Okay. okay I think you talked about this in the last earnings call about expectations for that environmental services business to turn up in the second half of the year. i think you talked about this in the last earnings call about expectations for that environmental services business to turn up in the second half of the year Maybe you could talk a little bit about what are you seeing that gives you that confidence, and what are you seeing in the market? maybe you could talk a little bit about what are you seeing that gives you that confidence and what are you seeing in the market Just some of the other players talked about, hey, these turnarounds are not happening. just some of the other players talked about hey these turnarounds are not happening They're not happening for a better reason because the clients are actually busy now as opposed to not being busy. they're not happening for a better reason because the clients are actually busy now as opposed to not being busy How much visibility do you have to some of that, and what's your confidence that we come out here in a couple of quarters and be like, "Hey, yeah, we've turned the corner on that, and we're getting growth? how much visibility do you have to some of that and what's your confidence that we come out here in a couple of quarters and be like "hey yeah we've turned the corner on that and we're getting growth

Speaker 2: Yeah. Some of it is the sales pipeline, and we know some jobs happen in a matter of days or weeks, but many jobs happen over the course of months. They get confirmed, then it gets scheduled to be treated. We see that sales pipeline building. Listen, we have a billion and a half plus position in the Recycling and Waste business in the manufacturing sector. We get really good view of demand there. We're starting to see service level increases. We're starting to see special waste move. Last year was a pretty tough year, and I think some of it was self-inflicted based on trade policy. Yeah. yeah Some of it is the sales pipeline, and we know some jobs happen in a matter of days or weeks, but many jobs happen over the course of months. some of it is the sales pipeline and we know some jobs happen in a matter of days or weeks but many jobs happen over the course of months They get confirmed, then it gets scheduled to be treated. they get confirmed then it gets scheduled to be treated We see that sales pipeline building. we see that sales pipeline building Listen, we have a billion and a half plus position in the Recycling and Waste business in the manufacturing sector. listen we have a billion and a half plus position in the recycling and waste business in the manufacturing sector We get really good view of demand there. we get really good view of demand there We're starting to see service level increases. we're starting to see service level increases We're starting to see special waste move. we're starting to see special waste move Last year was a pretty tough year, and I think some of it was self-inflicted based on trade policy. last year was a pretty tough year and i think some of it was self-inflicted based on trade policy You saw a lot of industrial companies just being paralyzed or putting all of their attention to their own supply chains, figuring out where do they re-domicile product, or how do they think about getting around the tariff regime. While I don't think we have perfect policy yet, I think we have more clarity, you're seeing jobs start to move, people making capital investment decisions on new factories and new plants. We start to see that momentum in the business, and that gives us confidence. You saw a lot of industrial companies just being paralyzed or putting all of their attention to their own supply chains, figuring out where do they re-domicile product, or how do they think about getting around the tariff regime. you saw a lot of industrial companies just being paralyzed or putting all of their attention to their own supply chains figuring out where do they re-domicile product or how do they think about getting around the tariff regime While I don't think we have perfect policy yet, I think we have more clarity, you're seeing jobs start to move, people making capital investment decisions on new factories and new plants. while i don't think we have perfect policy yet i think we have more clarity you're seeing jobs start to move people making capital investment decisions on new factories and new plants We start to see that momentum in the business, and that gives us confidence. we start to see that momentum in the business and that gives us confidence

Speaker 1: Yeah. If you combine that with, if you take a look at some of the early signs of strength in the current year, by the time we get to the second half of 2025, we get into an easier comp. Last year, when you take a look at where we started to see the decline in that business really started in May. Q, the second half of 2025, easier comp than what we saw in the first half of 2025. Yeah. yeah If you combine that with, if you take a look at some of the early signs of strength in the current year, by the time we get to the second half of 2025, we get into an easier comp. if you combine that with if you take a look at some of the early signs of strength in the current year by the time we get to the second half of 2025 we get into an easier comp Last year, when you take a look at where we started to see the decline in that business really started in May. last year when you take a look at where we started to see the decline in that business really started in may Q, the second half of 2025, easier comp than what we saw in the first half of 2025. q the second half of 2025 easier comp than what we saw in the first half of 2025

Speaker 3: Okay. Are you seeing from your client base the impact, like you talked about the supply chains? Are you seeing some of that reshoring happening and some of the investment in manufacturing and like, hey, this is starting, we're seeing in our client base, they're starting up, it's building, and from a macro perspective? Okay. okay Are you seeing from your client base the impact, like you talked about the supply chains? are you seeing from your client base the impact like you talked about the supply chains Are you seeing some of that reshoring happening and some of the investment in manufacturing and like, hey, this is starting, we're seeing in our client base, they're starting up, it's building, and from a macro perspective? are you seeing some of that reshoring happening and some of the investment in manufacturing and like hey this is starting we're seeing in our client base they're starting up it's building and from a macro perspective

Speaker 2: Yeah, I think it's happening. I think we're still more in the planning and commitment phase than we are shovels in the ground phase. I think there's a lot of that work to come. Even think about things like fabs. Now people are thinking about reshoring those operations, which putting a foundry back in the United States 10 years ago would have been almost unthinkable. You're starting to think of people make real decisions just in terms of geopolitics and how much of that semiconductor industry is tied up in Taiwan. Those are all going to be good things for our business. Yeah, I think it's happening. yeah i think it's happening I think we're still more in the planning and commitment phase than we are shovels in the ground phase. i think we're still more in the planning and commitment phase than we are shovels in the ground phase I think there's a lot of that work to come. i think there's a lot of that work to come Even think about things like fabs. even think about things like fabs Now people are thinking about reshoring those operations, which putting a foundry back in the United States 10 years ago would have been almost unthinkable. now people are thinking about reshoring those operations which putting a foundry back in the united states 10 years ago would have been almost unthinkable You're starting to think of people make real decisions just in terms of geopolitics and how much of that semiconductor industry is tied up in Taiwan. you're starting to think of people make real decisions just in terms of geopolitics and how much of that semiconductor industry is tied up in taiwan Those are all going to be good things for our business. those are all going to be good things for our business

Speaker 3: Okay. One of the other things that came out last year was a discussion about the approach in the Environmental Solutions business to applying the solid waste playbook in terms of certain pricing and your efforts over there. How do you feel you are right now in terms of your approach to the market, in terms of matching the pricing with the demand and the competition and how that's played out? Okay. okay One of the other things that came out last year was a discussion about the approach in the Environmental Solutions business to applying the solid waste playbook in terms of certain pricing and your efforts over there. one of the other things that came out last year was a discussion about the approach in the environmental solutions business to applying the solid waste playbook in terms of certain pricing and your efforts over there How do you feel you are right now in terms of your approach to the market, in terms of matching the pricing with the demand and the competition and how that's played out? how do you feel you are right now in terms of your approach to the market in terms of matching the pricing with the demand and the competition and how that's played out

Speaker 2: Yeah, I think if you go back to US Ecology closed at a 14% EBITDA margin, the last quarter before we took over in May of 2022, we've gotten that up to 25% EBITDA margin. Tremendous improvement. Team did an amazing job of grinding out some cost synergies, certainly improving the customer mix, and a lot of that was pricing because, again, we believe those assets have a ton of value, impossible to replicate. No amount of time or energy could get those assets re-permitted. That waste oftentimes moves and is priced in an ounce or a pound versus a yard or a ton. Yeah, I think if you go back to US Ecology closed at a 14% EBITDA margin, the last quarter before we took over in May of 2022, we've gotten that up to 25% EBITDA margin. yeah i think if you go back to us ecology closed at a 14% ebitda margin the last quarter before we took over in may of 2022 we've gotten that up to 25% ebitda margin Tremendous improvement. tremendous improvement Team did an amazing job of grinding out some cost synergies, certainly improving the customer mix, and a lot of that was pricing because, again, we believe those assets have a ton of value, impossible to replicate. team did an amazing job of grinding out some cost synergies certainly improving the customer mix and a lot of that was pricing because again we believe those assets have a ton of value impossible to replicate No amount of time or energy could get those assets re-permitted. no amount of time or energy could get those assets re-permitted That waste oftentimes moves and is priced in an ounce or a pound versus a yard or a ton. that waste oftentimes moves and is priced in an ounce or a pound versus a yard or a ton We believe, again, returns should be high in that business. The end of 2024, I think we hit a demand air pocket and the industry really turned. Listen, we missed it. We kept pricing at the same level. It's not that we were going to cut price, it's that we needed to rotate and modulate our expectations given the time and place in the market. We've lost a little bit of share. The team, we've worked through that in terms of controls and understanding that. We're not perfect yet. We're newer in that business, and we're going to get better and more sophisticated on making the right price-volume trade-off. We believe, again, returns should be high in that business. we believe again returns should be high in that business The end of 2024, I think we hit a demand air pocket and the industry really turned. the end of 2024 i think we hit a demand air pocket and the industry really turned Listen, we missed it. listen we missed it We kept pricing at the same level. we kept pricing at the same level It's not that we were going to cut price, it's that we needed to rotate and modulate our expectations given the time and place in the market. it's not that we were going to cut price it's that we needed to rotate and modulate our expectations given the time and place in the market We've lost a little bit of share. we've lost a little bit of share The team, we've worked through that in terms of controls and understanding that. the team we've worked through that in terms of controls and understanding that We're not perfect yet. we're not perfect yet We're newer in that business, and we're going to get better and more sophisticated on making the right price-volume trade-off. we're newer in that business and we're going to get better and more sophisticated on making the right price-volume trade-off We finally feel like in the first half here, we're finding the bottom, again, momentum in the second half. Listen, progress never is a straight line. It's always going to be a sawtooth, and there's going to be points of acceleration and points of pullback. I think if you look at the overall trend line, investors are going to be really satisfied with that outcome. We finally feel like in the first half here, we're finding the bottom, again, momentum in the second half. we finally feel like in the first half here we're finding the bottom again momentum in the second half Listen, progress never is a straight line. listen progress never is a straight line It's always going to be a sawtooth, and there's going to be points of acceleration and points of pullback. it's always going to be a sawtooth and there's going to be points of acceleration and points of pullback I think if you look at the overall trend line, investors are going to be really satisfied with that outcome. i think if you look at the overall trend line investors are going to be really satisfied with that outcome

Speaker 1: The good news is, while there's plenty of pricing opportunities remaining in that business, it's not going to take price to get that margin back. You saw as the units exited our system. A good portion of which was economic driven. It falls through at a relatively high incremental margin because it's a higher fixed cost business. Conversely, as we see that economic activity improve and those units come back into the system, we would expect them to come back at a relatively higher incremental margin as well. The good news is, while there's plenty of pricing opportunities remaining in that business, it's not going to take price to get that margin back. the good news is while there's plenty of pricing opportunities remaining in that business it's not going to take price to get that margin back You saw as the units exited our system. you saw as the units exited our system A good portion of which was economic driven. a good portion of which was economic driven It falls through at a relatively high incremental margin because it's a higher fixed cost business. it falls through at a relatively high incremental margin because it's a higher fixed cost business Conversely, as we see that economic activity improve and those units come back into the system, we would expect them to come back at a relatively higher incremental margin as well. conversely as we see that economic activity improve and those units come back into the system we would expect them to come back at a relatively higher incremental margin as well

Speaker 3: That dovetails to the next question I was going to ask you specifically, is at the time that you bought this, you expected to be able to get it at some point to a 25% EBITDA margin business. What will it take to get to that point from where we are today, is it just volume? Maybe you could discuss about how that, do you have a vision of a timeframe when you think that's going to happen? That dovetails to the next question I was going to ask you specifically, is at the time that you bought this, you expected to be able to get it at some point to a 25% EBITDA margin business. that dovetails to the next question i was going to ask you specifically is at the time that you bought this you expected to be able to get it at some point to a 25% ebitda margin business What will it take to get to that point from where we are today, is it just volume? what will it take to get to that point from where we are today is it just volume Maybe you could discuss about how that, do you have a vision of a timeframe when you think that's going to happen? maybe you could discuss about how that do you have a vision of a timeframe when you think that's going to happen

Speaker 2: Yeah, I think further volume from it. Listen, a lot of it is market recovery. As you start to see some volume in the system, I think you'll see continued momentum in that space. We'll look to think about 80-100 basis points of margin expansion in that business, if we can get there quicker, we will. Again, we're not trying to just change ourselves. We're trying to change an industry and get the mindset, just like solid waste and recycling was 25, 30 years ago. These assets deserve more and should have a high return because the regulatory challenges aren't getting easier. It's safety sensitive. We provide tremendous value, we're going to continue to put upward pressure on price. Yeah, I think further volume from it. yeah i think further volume from it Listen, a lot of it is market recovery. listen a lot of it is market recovery As you start to see some volume in the system, I think you'll see continued momentum in that space. as you start to see some volume in the system i think you'll see continued momentum in that space We'll look to think about 80- 100 basis points of margin expansion in that business, if we can get there quicker, we will. we'll look to think about 80- 100 basis points of margin expansion in that business if we can get there quicker we will Again, we're not trying to just change ourselves. again we're not trying to just change ourselves We're trying to change an industry and get the mindset, just like solid waste and recycling was 25, 30 years ago. we're trying to change an industry and get the mindset just like solid waste and recycling was 25 30 years ago These assets deserve more and should have a high return because the regulatory challenges aren't getting easier. these assets deserve more and should have a high return because the regulatory challenges aren't getting easier It's safety sensitive. it's safety sensitive We provide tremendous value, we're going to continue to put upward pressure on price. we provide tremendous value we're going to continue to put upward pressure on price

Speaker 3: Got it. How do you think of a normalized growth rate for that part of the business right now? Obviously I understand that there's cycles. Maybe bottom of cycle, top of cycle, average of cycle. How do you think of that? Got it. got it How do you think of a normalized growth rate for that part of the business right now? how do you think of a normalized growth rate for that part of the business right now Obviously I understand that there's cycles. obviously i understand that there's cycles Maybe bottom of cycle, top of cycle, average of cycle. maybe bottom of cycle top of cycle average of cycle How do you think of that? how do you think of that

Speaker 2: Yeah. If you go back 40, 50 years, recycling solid waste has been a 50-100 basis point underlying unit growth business. Population growth over the same period has been 0.7%, it's very much of a population-driven environment. Where you think about the more industrial waste side, more like a 2%-3% more of GDP from underlying unit growth. Over the next 5-10 years, I like the upside on that number because of the reshoring and some of the activity, PFAS and some of the other drivers in that business, that I think it takes it to a higher underlying growth rate over that period. Yeah. yeah If you go back 40, 50 years, recycling solid waste has been a 50- 100 basis point underlying unit growth business. if you go back 40 50 years recycling solid waste has been a 50- 100 basis point underlying unit growth business Population growth over the same period has been 0.7%, it's very much of a population-driven environment. population growth over the same period has been 0.7% it's very much of a population-driven environment Where you think about the more industrial waste side, more like a 2%-3% more of GDP from underlying unit growth. where you think about the more industrial waste side more like a 2%-3% more of gdp from underlying unit growth Over the next 5-10 years, I like the upside on that number because of the reshoring and some of the activity, PFAS and some of the other drivers in that business, that I think it takes it to a higher underlying growth rate over that period. over the next 5-10 years i like the upside on that number because of the reshoring and some of the activity pfas and some of the other drivers in that business that i think it takes it to a higher underlying growth rate over that period

Speaker 3: I'm going to step back a little bit from a macro perspective as we're talking like industrial is obviously a little bit more of a gauge on the macro. You've also, on the solid waste business, it sounded like you're starting to see a little bit more of a turn is what it sounded like from the first quarter. Your management, you guys tend to be a little bit more conservative, and I pay attention to the tone, and it sounded like the tone was a little bit better last quarter. Did I misread you? Or is that really what you're feeling like we're starting to see a turn macro-wise that's manifesting in the solid waste as well, for some of maybe the C&D or other things? I'm going to step back a little bit from a macro perspective as we're talking like industrial is obviously a little bit more of a gauge on the macro. i'm going to step back a little bit from a macro perspective as we're talking like industrial is obviously a little bit more of a gauge on the macro You've also, on the solid waste business, it sounded like you're starting to see a little bit more of a turn is what it sounded like from the first quarter. you've also on the solid waste business it sounded like you're starting to see a little bit more of a turn is what it sounded like from the first quarter Your management, you guys tend to be a little bit more conservative, and I pay attention to the tone, and it sounded like the tone was a little bit better last quarter. your management you guys tend to be a little bit more conservative and i pay attention to the tone and it sounded like the tone was a little bit better last quarter Did I misread you? did i misread you Or is that really what you're feeling like we're starting to see a turn macro-wise that's manifesting in the solid waste as well, for some of maybe the C&D or other things? or is that really what you're feeling like we're starting to see a turn macro-wise that's manifesting in the solid waste as well for some of maybe the c&d or other things

Speaker 2: We're really in our fourth year across the industry in Recycling and Waste of a negative demand environment, it's been driven by construction and manufacturing. Those have been the holes in the menu. For us, those are both high single digits as a percentage of revenue. I think that manufacturing piece I talked about, we are starting to see some momentum, you're starting to see, again, the large container. We've got a great position with our manufacturers, we just saw over the last three or four years, plants going down from five pulls a week to four pulls a week to three pulls a week, you're starting to see those service levels come up, which is a great sign. Special waste is a good barometer, you're starting to see momentum on that front. We're really in our fourth year across the industry in Recycling and Waste of a negative demand environment, it's been driven by construction and manufacturing. we're really in our fourth year across the industry in recycling and waste of a negative demand environment it's been driven by construction and manufacturing Those have been the holes in the menu. those have been the holes in the menu For us, those are both high single digits as a percentage of revenue. for us those are both high single digits as a percentage of revenue I think that manufacturing piece I talked about, we are starting to see some momentum, you're starting to see, again, the large container. i think that manufacturing piece i talked about we are starting to see some momentum you're starting to see again the large container We've got a great position with our manufacturers, we just saw over the last three or four years, plants going down from five pulls a week to four pulls a week to three pulls a week, you're starting to see those service levels come up, which is a great sign. we've got a great position with our manufacturers we just saw over the last three or four years plants going down from five pulls a week to four pulls a week to three pulls a week you're starting to see those service levels come up which is a great sign Special waste is a good barometer, you're starting to see momentum on that front. special waste is a good barometer you're starting to see momentum on that front Even commercial construction, in addition to the data center craze, which is a whole different kettle of fish. Commercial construction, I think, is showing some good momentum, more west of the Mississippi than east of the Mississippi. The hole in the menu is still residential construction, which I think we now probably have three to four million homes of pent-up demand beyond the normal 1.4, 1.5 million we should be building as a society. Even commercial construction, in addition to the data center craze, which is a whole different kettle of fish. even commercial construction in addition to the data center craze which is a whole different kettle of fish Commercial construction, I think, is showing some good momentum, more west of the Mississippi than east of the Mississippi. commercial construction i think is showing some good momentum more west of the mississippi than east of the mississippi The hole in the menu is still residential construction, which I think we now probably have three to four million homes of pent-up demand beyond the normal 1.4, 1.5 million we should be building as a society. the hole in the menu is still residential construction which i think we now probably have three to four million homes of pent-up demand beyond the normal 1.4 1.5 million we should be building as a society I'm hugely bullish in the long term on residential housing. I'm very bearish in the short term because until the 10-year comes down and mortgage rates change, it's just the pragmatism of somebody who's in a 3% or 4% mortgage is not going to upgrade their home and jump into a 7% mortgage. We need some material movement there over time. Again, I think that will be a growth driver for the business. It will be good, we're going to have to be a little more patient on that one. I'm hugely bullish in the long term on residential housing. i'm hugely bullish in the long term on residential housing I'm very bearish in the short term because until the 10-year comes down and mortgage rates change, it's just the pragmatism of somebody who's in a 3% or 4% mortgage is not going to upgrade their home and jump into a 7% mortgage. i'm very bearish in the short term because until the 10-year comes down and mortgage rates change it's just the pragmatism of somebody who's in a 3% or 4% mortgage is not going to upgrade their home and jump into a 7% mortgage We need some material movement there over time. we need some material movement there over time Again, I think that will be a growth driver for the business. again i think that will be a growth driver for the business It will be good, we're going to have to be a little more patient on that one. it will be good we're going to have to be a little more patient on that one

Speaker 1: Yeah. If you take a look just at the momentum in the business, when you take a look at volume performance by line of business, every single line of business improves sequentially with the exception of residential. Landfill's positive. Small container is essentially flat with visibility to turning positive by the end of the year. That's what gives us some optimism about the fact that we are on an upward trajectory. Yeah. yeah If you take a look just at the momentum in the business, when you take a look at volume performance by line of business, every single line of business improves sequentially with the exception of residential. if you take a look just at the momentum in the business when you take a look at volume performance by line of business every single line of business improves sequentially with the exception of residential Landfill's positive. landfill's positive Small container is essentially flat with visibility to turning positive by the end of the year. small container is essentially flat with visibility to turning positive by the end of the year That's what gives us some optimism about the fact that we are on an upward trajectory. that's what gives us some optimism about the fact that we are on an upward trajectory

Speaker 3: Okay, great. I want to jump back to that margin discussion. I think you're targeting something like 60-70 basis points of margin, I think, in general. First quarter was better than that underlying. 2025 was better than that. We're looking more like 90, I think, recently. Can you really outperform that more on a regular basis with everything that you're seeing in front of you and some of the levers that you're seeing? Are you just, "Hey, we think this is a comfortable baseline, but we see room to improve on that? Okay, great. okay great I want to jump back to that margin discussion. i want to jump back to that margin discussion I think you're targeting something like 60- 70 basis points of margin, I think, in general. i think you're targeting something like 60- 70 basis points of margin i think in general First quarter was better than that underlying. 2025 was better than that. first quarter was better than that underlying 2025 was better than that We're looking more like 90, I think, recently. we're looking more like 90 i think recently Can you really outperform that more on a regular basis with everything that you're seeing in front of you and some of the levers that you're seeing? can you really outperform that more on a regular basis with everything that you're seeing in front of you and some of the levers that you're seeing Are you just, "Hey, we think this is a comfortable baseline, but we see room to improve on that? are you just "hey we think this is a comfortable baseline but we see room to improve on that

Speaker 2: Yeah. We talk about 30-50 basis points of margin expansion a year across the cycle. This year, we're facing some headwinds of pretty tough comps of some very profitable one-time cleanup jobs last year on the fire and the hurricane. The underlying business is delivering that this year, and that's going to be our expectation. Could we do a little better than that going forward with AI and some of the other things we talked about? Potentially. Now, the business isn't getting easier either. Landfills are not getting cheaper to manage and operate. We want to be mindful that there's also cost headwinds are going to be taken on. We're staying there at 30-50, and if we can beat that, we will. Yeah. yeah We talk about 30- 50 basis points of margin expansion a year across the cycle. we talk about 30- 50 basis points of margin expansion a year across the cycle This year, we're facing some headwinds of pretty tough comps of some very profitable one-time cleanup jobs last year on the fire and the hurricane. this year we're facing some headwinds of pretty tough comps of some very profitable one-time cleanup jobs last year on the fire and the hurricane The underlying business is delivering that this year, and that's going to be our expectation. the underlying business is delivering that this year and that's going to be our expectation Could we do a little better than that going forward with AI and some of the other things we talked about? could we do a little better than that going forward with ai and some of the other things we talked about Potentially. potentially Now, the business isn't getting easier either. now the business isn't getting easier either Landfills are not getting cheaper to manage and operate. landfills are not getting cheaper to manage and operate We want to be mindful that there's also cost headwinds are going to be taken on. we want to be mindful that there's also cost headwinds are going to be taken on We're staying there at 30- 50, and if we can beat that, we will. we're staying there at 30- 50 and if we can beat that we will

Speaker 3: Okay, great. Maybe touch a little on the polymer facilities and where we are with that as I think there was one more that you guys took a pause on in terms of construction. Is that waiting for the pricing in the industry to come back for the end market or can you describe what's going on over there? Okay, great. okay great Maybe touch a little on the polymer facilities and where we are with that as I think there was one more that you guys took a pause on in terms of construction. maybe touch a little on the polymer facilities and where we are with that as i think there was one more that you guys took a pause on in terms of construction Is that waiting for the pricing in the industry to come back for the end market or can you describe what's going on over there? is that waiting for the pricing in the industry to come back for the end market or can you describe what's going on over there

Speaker 2: We have two operating today, one in Las Vegas and one in Indianapolis, and then a third that's going to open in Allentown, Pennsylvania. We talked about four over time. We're pausing on the fourth. I ultimately think we'll get there. One of the reasons we're pausing is we think that the capacity of the current three is actually bigger than we thought. We're actually able to operate at peak, past the nameplate capacity of the assets. If we can get most of the same work done in three sites versus four sites, that's certainly going to be good from a return standpoint. We have two operating today, one in Las Vegas and one in Indianapolis, and then a third that's going to open in Allentown, Pennsylvania. we have two operating today one in las vegas and one in indianapolis and then a third that's going to open in allentown pennsylvania We talked about four over time. we talked about four over time We're pausing on the fourth. we're pausing on the fourth I ultimately think we'll get there. i ultimately think we'll get there One of the reasons we're pausing is we think that the capacity of the current three is actually bigger than we thought. one of the reasons we're pausing is we think that the capacity of the current three is actually bigger than we thought We're actually able to operate at peak, past the nameplate capacity of the assets. we're actually able to operate at peak past the nameplate capacity of the assets If we can get most of the same work done in three sites versus four sites, that's certainly going to be good from a return standpoint. if we can get most of the same work done in three sites versus four sites that's certainly going to be good from a return standpoint The spread has really held up, even though plastics has been a very challenged environment, because we're providing something that nobody else can do, which is a domestically sourced, curbside, circular solution where this water bottle you could buy in L.A. or Las Vegas, and 120 days later, the exact same molecules could be back on a shelf in a water bottle. The spread has really held up, even though plastics has been a very challenged environment, because we're providing something that nobody else can do, which is a domestically sourced, curbside, circular solution where this water bottle you could buy in L.A. or Las Vegas, and 120 days later, the exact same molecules could be back on a shelf in a water bottle. the spread has really held up even though plastics has been a very challenged environment because we're providing something that nobody else can do which is a domestically sourced curbside circular solution where this water bottle you could buy in l.a or las vegas and 120 days later the exact same molecules could be back on a shelf in a water bottle We could sell out each of the three facilities three or four times over. From a demand standpoint, it's the supply side we'll want to be sure we get, because what we don't want to do is build a facility and then be subject to third-party supply, and that's the risk. That's why most of these recyclers have gotten into trouble. It's not really on the technology side, it's the supply side. That's what we're mindful of. We could sell out each of the three facilities three or four times over. we could sell out each of the three facilities three or four times over From a demand standpoint, it's the supply side we'll want to be sure we get, because what we don't want to do is build a facility and then be subject to third-party supply, and that's the risk. from a demand standpoint it's the supply side we'll want to be sure we get because what we don't want to do is build a facility and then be subject to third-party supply and that's the risk That's why most of these recyclers have gotten into trouble. that's why most of these recyclers have gotten into trouble It's not really on the technology side, it's the supply side. it's not really on the technology side it's the supply side That's what we're mindful of. that's what we're mindful of

Speaker 3: Okay, great. Thank you for clarifying that. Maybe you could talk a little bit about M&A and opportunities and compare what you're seeing out there in your pipeline for solid waste versus Environmental Solutions. Do you equally have an equal appetite for both sides of the business in terms of M&A, or how do you think of that? Okay, great. okay great Thank you for clarifying that. thank you for clarifying that Maybe you could talk a little bit about M&A and opportunities and compare what you're seeing out there in your pipeline for solid waste versus Environmental Solutions. maybe you could talk a little bit about m&a and opportunities and compare what you're seeing out there in your pipeline for solid waste versus environmental solutions Do you equally have an equal appetite for both sides of the business in terms of M&A, or how do you think of that? do you equally have an equal appetite for both sides of the business in terms of m&a or how do you think of that

Speaker 2: Yeah. I get this question all the time. If you got a dollar, where do you put it? It's like, which one of my kids do I love more? I love both. We're going to invest in both, and we're not capital constrained. Really, we think about two things. One, does it meet our strategic filter? Are we the natural owner of this? Can we create value? Our financial filter, double-digit cash on cash on levered returns. That's how we think about it. We might constrain ourselves for a period. Environmental Solutions, we've probably foregone a few small opportunities over the last couple of years as we've done a lot of this internal integration work that Del talked about. Yeah. yeah I get this question all the time. i get this question all the time If you got a dollar, where do you put it? if you got a dollar where do you put it It's like, which one of my kids do I love more? it's like which one of my kids do i love more I love both. i love both We're going to invest in both, and we're not capital constrained. we're going to invest in both and we're not capital constrained Really, we think about two things. really we think about two things One, does it meet our strategic filter? one does it meet our strategic filter Are we the natural owner of this? are we the natural owner of this Can we create value? can we create value Our financial filter, double-digit cash on cash on levered returns. our financial filter double-digit cash on cash on levered returns That's how we think about it. that's how we think about it We might constrain ourselves for a period. we might constrain ourselves for a period Environmental Solutions, we've probably foregone a few small opportunities over the last couple of years as we've done a lot of this internal integration work that Del talked about. environmental solutions we've probably foregone a few small opportunities over the last couple of years as we've done a lot of this internal integration work that del talked about Where in Recycling and Waste, that is a well-oiled, well-running machine where we can buy a company, tuck it in, and it's 30 days later, you don't even know we bought it. We're really, really good at that playbook because we're going to do 30 deals this year. We're very good at M&A and good at the integration portion. I'd say if you look over the next five years, it's probably an 80/20 mix of Recycling and Waste, and then 20% Environmental Solutions because we have opportunities on both fronts. Where in Recycling and Waste, that is a well-oiled, well-running machine where we can buy a company, tuck it in, and it's 30 days later, you don't even know we bought it. where in recycling and waste that is a well-oiled well-running machine where we can buy a company tuck it in and it's 30 days later you don't even know we bought it We're really, really good at that playbook because we're going to do 30 deals this year. we're really really good at that playbook because we're going to do 30 deals this year We're very good at M&A and good at the integration portion. we're very good at m&a and good at the integration portion I'd say if you look over the next five years, it's probably an 80/20 mix of Recycling and Waste, and then 20% Environmental Solutions because we have opportunities on both fronts. i'd say if you look over the next five years it's probably an 80/20 mix of recycling and waste and then 20% environmental solutions because we have opportunities on both fronts

Speaker 3: I think you did $1.1 billion in acquisitions in 2025. Is that right? Is the pipeline there for that level to continue into the future? Just in general. I think you did $1.1 billion in acquisitions in 2025. i think you did $1.1 billion in acquisitions in 2025 Is that right? is that right Is the pipeline there for that level to continue into the future? is the pipeline there for that level to continue into the future Just in general. just in general

Speaker 2: Yes. We feel good about it. Now, we'll probably set a boring target next year of another $500 million and try to beat it. The risk, obviously, with setting a target at M&A is you could get that number tomorrow. It's just are you going to create value or not when you buy it? The pipeline looks robust, and I think what's happened over the last really three to five years is the moat in this business has always been post-collection infrastructure. It's been the recycling centers and landfills, which are hard to permit, expensive to build. Digital has become the second moat. Yes. yes We feel good about it. we feel good about it Now, we'll probably set a boring target next year of another $500 million and try to beat it. now we'll probably set a boring target next year of another $500 million and try to beat it The risk, obviously, with setting a target at M&A is you could get that number tomorrow. the risk obviously with setting a target at m&a is you could get that number tomorrow It's just are you going to create value or not when you buy it? it's just are you going to create value or not when you buy it The pipeline looks robust, and I think what's happened over the last really three to five years is the moat in this business has always been post-collection infrastructure. the pipeline looks robust and i think what's happened over the last really three to five years is the moat in this business has always been post-collection infrastructure It's been the recycling centers and landfills, which are hard to permit, expensive to build. it's been the recycling centers and landfills which are hard to permit expensive to build Digital has become the second moat. digital has become the second moat I mentioned, we started talking about AI and routing. We're building all these routes. Whether I roll that technology across 150 routes, 1,500 routes, or 15,000 routes, it's the same underlying fixed cost. When we buy companies, we roll them right into Workday, we roll them right into Salesforce, right into all of these investments that we've already made. That's a scale play, and that's where we think we have an advantage, and that's what's supporting our M&A pipeline. I mentioned, we started talking about AI and routing. i mentioned we started talking about ai and routing We're building all these routes. we're building all these routes Whether I roll that technology across 150 routes, 1,500 routes, or 15,000 routes, it's the same underlying fixed cost. whether i roll that technology across 150 routes 1,500 routes or 15,000 routes it's the same underlying fixed cost When we buy companies, we roll them right into Workday, we roll them right into Salesforce, right into all of these investments that we've already made. when we buy companies we roll them right into workday we roll them right into salesforce right into all of these investments that we've already made That's a scale play, and that's where we think we have an advantage, and that's what's supporting our M&A pipeline. that's a scale play and that's where we think we have an advantage and that's what's supporting our m&a pipeline

Speaker 3: Okay. We're coming towards the end of this session. I just wanted to ask you, when you think out 5-10 years in this industry, what do you think this is going to look like 5-10 years from now? We're sitting here, you and I are in the same seats, a little grayer, a little older in 2036. What's going to be different about the industry that maybe we wouldn't have thought of or the average person wouldn't have thought of at this point? Okay. okay We're coming towards the end of this session. we're coming towards the end of this session I just wanted to ask you, when you think out 5- 10 years in this industry, what do you think this is going to look like 5- 10 years from now? i just wanted to ask you when you think out 5- 10 years in this industry what do you think this is going to look like 5- 10 years from now We're sitting here, you and I are in the same seats, a little grayer, a little older in 2036. we're sitting here you and i are in the same seats a little grayer a little older in 2036 What's going to be different about the industry that maybe we wouldn't have thought of or the average person wouldn't have thought of at this point? what's going to be different about the industry that maybe we wouldn't have thought of or the average person wouldn't have thought of at this point

Speaker 2: Well, I hope we are dramatically safer. I think the industry, back to technology, one of my big disappointments has been how relatively poor the safety technology has been in this industry. Now, I think there's been huge advancements in the last five years, but things that you would find a table stakes in a Honda Civic or a Toyota Camry don't show up on a $400,000 truck. For me, that's completely unacceptable. I think you're going to see far more innovation on the safety side from an equipment standpoint, which is going to be great for our frontline colleagues. Well, I hope we are dramatically safer. well i hope we are dramatically safer I think the industry, back to technology, one of my big disappointments has been how relatively poor the safety technology has been in this industry. i think the industry back to technology one of my big disappointments has been how relatively poor the safety technology has been in this industry Now, I think there's been huge advancements in the last five years, but things that you would find a table stakes in a Honda Civic or a Toyota Camry don't show up on a $400,000 truck. now i think there's been huge advancements in the last five years but things that you would find a table stakes in a honda civic or a toyota camry don't show up on a $400,000 truck For me, that's completely unacceptable. for me that's completely unacceptable I think you're going to see far more innovation on the safety side from an equipment standpoint, which is going to be great for our frontline colleagues. i think you're going to see far more innovation on the safety side from an equipment standpoint which is going to be great for our frontline colleagues I think from a structure standpoint, I think you're going to see more concentration, but there's still going to be plenty of small, medium-sized businesses. There's many very well-run, privately held businesses that I expect to stay independent for a long period of time. I think you're going to see returns in the business continue to go up and not down because, again, the value of our work is very, very important, and I think we're going to continue to price for that value. I think from a structure standpoint, I think you're going to see more concentration, but there's still going to be plenty of small, medium-sized businesses. i think from a structure standpoint i think you're going to see more concentration but there's still going to be plenty of small medium-sized businesses There's many very well-run, privately held businesses that I expect to stay independent for a long period of time. there's many very well-run privately held businesses that i expect to stay independent for a long period of time I think you're going to see returns in the business continue to go up and not down because, again, the value of our work is very, very important, and I think we're going to continue to price for that value. i think you're going to see returns in the business continue to go up and not down because again the value of our work is very very important and i think we're going to continue to price for that value

Speaker 3: Okay, great. Thank you very much. I appreciate it. Okay, great. okay great Thank you very much. thank you very much I appreciate it. i appreciate it

Speaker 2: Thank you. Thank you. thank you