Clean Harbors: A Blowout Quarter and a Pivot into Data Centers
A Blowout Quarter and a Raised Bar
Clean Harbors delivered its strongest quarter in history, with data centers and a resurgent Safety-Kleen leading the way. Co-CEO Eric Gerstenberg opened the call by noting, “We exceeded our guidance for the quarter on the strength of both of our operating segments.” — Eric Gerstenberg, Co-Chief Executive Officer · 2026-07-29 The company raised its full-year adjusted EBITDA guidance by $110 million to a midpoint of $1.38 billion — a clear signal that the momentum is durable. CFO Eric Dugas laid out the specifics:
The raise reflects not only the SKSS rebound but also continued strength in Environmental Services, where margins have now expanded for 17 consecutive quarters. Revenue in Q2 grew 12% to $1.74 billion, and adjusted EBITDA was $409 million, a 22% increase.We are now guiding to a 2026 adjusted EBITDA range of $1.35 billion to $1.41 billion, with a midpoint of $1.38 billion, and representing a $110 million increase from our prior guidance.
The company's Group III production and its closed loop offering are helping stabilize the cyclicality of the base oil business. As Mike Battles noted, the segment "continues to be well managed at both ends of the spread."
New Growth Vectors: Data Centers, M&A, and Manufacturing
Perhaps the most company-unique news was the introduction of an integrated data center solution. Gerstenberg stated, “We are in the process of introducing an integrated data center solution as many of our services align with customer needs.” — Eric Gerstenberg, Co-Chief Executive Officer · 2026-07-29 This is a departure from the traditional waste management focus, and it opens a TAM of $8–10 billion by 2030. The company has already won work on 10 data center sites and is targeting $200 million in annual revenue by 2028. While modest relative to the overall company, it represents a strategic pivot that could reshape the growth profile. The market opportunity is corroborated by other reporters: ACO-X.TO also cited data centers as a growth driver this quarter, confirming a broader industrial theme.
The company also announced the acquisition of ES&H for $305 million, a Gulf Coast field services and emergency response leader. This follows the recent Western Oil acquisition and demonstrates a disciplined M&A approach. Additionally, a new 10-year, $600 million disposal contract with a manufacturing customer underscores the reshoring tailwind. As Mike Battles put it, “It proves the reshoring theory, it's evidence of that.” — Michael Battles, Co-Chief Executive Officer · 2026-07-29
On the environmental side, PFAS revenue is growing at over 30% year-over-year, far above the earlier 20% assumption. The company is also investing in chemical passivation capabilities for the data center market, a capability it already uses in industrial settings.
Safety-Kleen's Cyclical Rebound
The standout performer was the Safety-Kleen Sustainability Solutions segment, where revenue surged more than 40% and adjusted EBITDA soared 143% year-over-year. Mike Battles explained, “The greater than 40% increase in its top line and remarkable 143% increase in adjusted EBITDA reflects the elevated market pricing during the quarter due to the scarcity of base and blended products.” — Michael Battles, Co-Chief Executive Officer · 2026-07-29 This is a sharp reversal from the prior quarter's caution. In May, Gerstenberg had been "cautiously optimistic that that segment is going to continue to overperform" (component 7125028809733773724) — a sentiment now validated. The company expects $275 million of SKSS EBITDA for the full year, double 2025's level, though it assumes base oil prices will moderate later in 2026.
The company's overall fundamentals remain solid. Total revenue has grown steadily from $698 million in Q2 2016 to $1.5 billion in Q1 2026, a trajectory that supports the scale of the current opportunity. The stock, however, is just off its post-earnings peak, having pulled back 3.2% from the $326.34 high on July 29. The tape suggests investors are digesting the news but remain constructive.
In prior quarters, the company was more measured. In May, Michael Battles highlighted the speed of the turn: “the fact that we're raising guidance on both segments here just after just giving guidance 6, 7 weeks ago should tell you about our view as we think about the rest of the year.” — Michael Battles, Co-Chief Executive Officer · 2026-05-06 That optimism is now being validated, and the raised guidance reflects a confidence that was not present in the spring.