Republic Services Inc (0KW1.L) Q2 2025 Earnings Report

Republic Services delivered a solid QQ2 2025 performance with revenue growth and margin stability that support durable cash flow generation. Revenue reached $4.2355 billion, up 4.62% year-over-year and 5.64% quarter-over-quarter, underpinned by ongoing demand for core collection, processing, and disposal services in the US waste market. Gross margin stood at 30.58% (gross profit of $1.295 billion), while operating margin reached 20.54% and EBITDA margin approximately 32.0%, reflecting continued operating leverage as volumes and pricing dynamics remain favorable. Net income of $550 million and EPS of $1.76 (diluted $1.75) highlighted earnings resilience amid a capital-intensive, asset-heavy model.

Despite robust cash flow generation—net cash provided by operating activities of $1.109 billion and free cash flow of $702 million—Republic maintains a heavy balance sheet posture with total debt of $13.216 billion and net debt of $13.094 billion. Leverage remains elevated (debt to capitalization approx. 0.523), yet interest coverage at ~6.0x and a cash flow to debt ratio near 0.084 indicate the business can fund ongoing capex, support dividends, and service debt. Management commentary (where available) emphasizes ongoing asset deployment and efficiency initiatives, with a focus on sustaining margins and cash conversion. In the near term, investors should monitor capex intensity, recycling and energy-from-waste projects, and debt trajectory as key drivers of the longer-term investment thesis.

Valuation and peer context suggest Republic trades with relatively rich multiples given the stable cash-generative framework, including P/B around 6.4x, P/S around 18.2x, and an EV/EBITDA around 66.6x (as of QQ2/2025 data). While these multiples reflect the market’s view of a defensible, asset-heavy business, the sustainability of free cash flow and the pace of deleveraging will be critical to justify these levels over time.