GFL Environmental outperforms expectations

GFL Environmental, headquartered in Vaughan, Ontario, has reported that revenue; adjusted earnings before interest, taxes, depreciation and amortization (EBITDA); and free cash flow for the first quarter of 2025 exceeded expectations, while its net leverage, at 3.1x, is the lowest in its history.

GFL, which is a diversified environmental services company with facilities throughout Canada and in 18 U.S. states, recorded CA$1,560.1 million ($1,126.1 million) in revenue for the quarter, a 12.5 percent increase, excluding the impact of divestitures, and 9 percent increase when they are included. Its adjusted EBITDA for the quarter was CA$426.1 million ($307.6 million) a 13.8 percent increase year over year.

The company’s adjusted net loss from continuing operations was CA$34.5 million ($24.9 million), while its net loss from continuing operations totaled CA$213.9 million ($154.4 million).

GFL realized its highest first-quarter adjusted EBITDA margin in its history at 27.3 percent, which was a 120-basis-point increase year over year.  

Year-to-date completed acquisitions generated approximately CA$85 million ($61.4 million) in annualized revenue, according to the company.

"I am extremely proud of the hard work and commitment of our over 15,000 employees as we delivered another strong start to the year," GFL founder and CEO Patrick Dovigi says. "Our strong performance, achieved amid increased macroeconomic volatility and unusually challenging weather conditions, underscores the resiliency of our business model."

Dovigi says GFL used the proceeds from the sale of its Environmental Services business to delever its balance sheet. In that transaction, closed in early March, GFL sold a majority stake in its Environmental Services business for CA$8 billion ($5.6 billion) to funds managed by affiliates of Apollo and BC Partners, and retained a CA$1.7 billion ($1.2 billion) equity interest in the business.

“This not only accelerates our path to an investment-grade credit rating but also allows us to reignite our solid waste M&A engine,” Dovigi says of the benefit of the sale to its balance sheet.

“In addition, we repurchased 31,725,083 subordinate voting shares through a combination of our normal course issuer bid, participation in the recent secondary offering and directly from BC Partners. We intend to continue to be opportunistic on further share repurchases going forward,” he adds.

GFL can repurchase a maximum of 28,046,256 subordinate voting shares under the normal course issuer bid (NCIB) during the 12-month period ending March 2, 2026, and is no longer required to count the 17,050,298 subordinate voting shares it repurchased from BC Partners March 25.  

To date, GFL has repurchased for cancellation 7,618,758 subordinate voting shares under the NCIB, leaving 20,427,498 subordinate voting shares available to be repurchased.

Dovigi says the company’s first-quarter performance leaves it confident it will achieve its full-year guidance, which projects revenue of approximately CA$6,500 million ($4,692 million) to CA$6,550 million ($4,728.1 million), excluding the Environmental Services contribution, and CA$8,425 million ($6,081.5 million) when the contribution from Environmental Services is included. Adjusted EBITDA is estimated to be approximately CA$2,500 million ($1,804.6 million), including the contribution from Environmental Services, and between $1,925 million ($1,389.5 million) and CA$1,950 million ($1,407.6 million) excluding that contribution.