GFL Environmental Inc. (GFL) Q3 2026 earnings review
GFL raises its full-year plan, while buyout talks near deadline
GFL Environmental, the North American waste and recycling group, grew faster on price increases and acquisitions while buyout talks neared a deadline. Total sales jumped 27%, and sales from businesses owned a year ago rose 7%. Founder and chief executive Patrick Dovigi raised the full-year plan for a third time after closing the purchase of SECURE Waste Infrastructure Corp., which by our math lifts fourth-quarter revenue growth to 37%.
| Sales from businesses owned a year ago | +7.4% +6.4% last quarter |
|---|---|
| Total revenue | $2,155.3M +27.2% from a year ago |
| Operating profit (Adjusted EBITDA) margin | 31.5% 31.6% a year ago |
| Full-year revenue outlook | Raised $545M middle of the range: 21.9% growth |
⚖️ Verdict: 🟢 Bullish
The story got better because the SECURE deal closed on time and customer volume losses almost stopped. One caution: US operating margins dropped 2.3 percentage points, and the special committee reviewing buyout offers set a final bid deadline of November 9, bringing governance risks to an immediate test.
The question now is whether the buyout review ends in a fair offer for outside investors or whether GFL stays public to digest its new acquisitions. Supporters see the bids as proof of value, while critics worry an insider-led deal could cap the payout. The special committee's decision after November 9 will settle it.
🐂 Bull Case
SECURE Deal Lifts the Full-Year Plan
GFL grows by buying smaller waste companies and plugging them into its routes. In the third quarter, the Canadian waste group closed its purchase of SECURE Waste Infrastructure Corp., a western Canadian disposal business, and added SECURE nominee Joseph Lenz to its board.
"Given our strong results year to date and the expected contribution from our acquisition of SECURE Waste Infrastructure Corp., we are raising our 2026 full year guidance for the third time this year," founder and chief executive Patrick Dovigi said. By our math, the yearly revenue from deals completed in 2026 jumped by $1.55 billion this quarter to about $2 billion.
- Revenue from acquisitions: added 18.7% to third-quarter growth, up from 9.9% in the second quarter
- Full-year revenue outlook: raised by $545 million at the middle of the range to $8.065 billion
- Adjusted free cash flow (cash left after capital spending, excluding one-offs): $272.5 million in Q3, up 51% from a year ago
This matters because the SECURE deal cleared its regulatory review on schedule and immediately lifts cash generation, pushing the full-year cash flow target past $1 billion.
What to watch: fourth-quarter revenue against the $2.32 billion implied by the full-year outlook. Beating that figure would show SECURE is adding more sales than the initial fourth-quarter estimate.
Price Increases Keep Carrying Underlying Growth
GFL relies on regular price increases across its collection routes and landfills to outrun cost inflation. Sales from businesses it owned a year ago rose 7.4% in the third quarter, picking up from 6.4% in the second quarter and 4.6% in the first.
Core pricing added 5.7% to revenue, while fuel and other surcharges added 1.5% and recycled commodity prices added 0.3%. Customer volumes dipped just 0.1%, a smaller drop than the 0.6% decline in the second quarter and the 1.2% drop in the first. Underlying sales grew 10.8% in Canada and 5.7% in the United States, so pricing power is holding up while volume losses fade.
What to watch: fourth-quarter customer volume change. A positive reading as GFL laps last year's 2.3% fourth-quarter drop would confirm that waste volumes have stabilized.
🐻 Bear Case
Buyout Deadline Brings Governance Risks to a Head
During the third quarter, GFL formed a special committee of independent directors "to review unsolicited inbound proposals to take the Company private". Supporters view the outside interest as proof of the business's value, while critics worry that a buyout led by insiders could shortchange public shareholders.
"The Special Committee has provided interested parties with a final deadline of November 9, 2026 to deliver their updated proposals, at which time the Special Committee will determine next steps," Dovigi said. Meanwhile, the waste hauler bought back zero shares for a second straight quarter after spending $2.76 billion on buybacks in the first nine months of 2025.
This matters because the process will reach a decision within two weeks, and pausing share buybacks while bidders prepare offers leaves outside investors reliant on the committee's protections.
What to watch: the special committee's update after the November 9 deadline. Walking away without a deal or announcing an offer without a majority-of-the-minority vote would validate the governance concern.
Deal Costs and US Margin Drops Held Back Profit
Dovigi said GFL achieved an underlying margin expansion of more than 1.15 percentage points "when excluding the impacts of M&A and diesel prices", and he reiterated his goal of "driving outsized margin expansion in the base business". Canadian Adjusted EBITDA (profit before interest, taxes, depreciation, and one-offs) margin rose 2.1 percentage points to 35.7%.
However, Acquisitions and fuel are ongoing parts of GFL's operations, and including them, total Adjusted EBITDA margin slipped 0.1 percentage points from a year ago to 31.5%. In the US segment, Adjusted EBITDA margin fell 2.3 percentage points to 33.8%. Cost of sales (the direct cost of running trucks and landfills) rose 2.1 percentage points of revenue to 80.2%, and overhead and transaction costs rose 0.9 percentage points to 12.9%, pushing the business to a $28 million net loss.
What to watch: US segment Adjusted EBITDA margin in the fourth quarter. Another decline of more than 2 percentage points would show that integrating acquired US haulers is taking longer than planned.
Debt Stays Above the Year-End Target
GFL tracks net leverage, which measures net debt as a multiple of full-year Run-Rate EBITDA (operating profit adjusted as if acquired businesses were owned for the full twelve months). Management wants this ratio in the mid-3s by the end of 2026.
Net debt rose 55% from the end of 2025 to $11.40 billion as the waste operator borrowed to fund $2.57 billion of acquisitions over the first nine months. Net leverage dipped from 4.0 times in the second quarter to 3.8 times at the end of September, only because GFL added $730.9 million of estimated full-year profit from recent deals into its Run-Rate EBITDA calculation.
What to watch: year-end net leverage in the fourth-quarter report. Finishing above 3.6 times would mean acquisition spending once again delayed the debt-reduction plan.
Risks this quarter didn't answer
Three standing concerns from prior quarters could not be checked from the third-quarter earnings release because the details live in the full financial statements or on the conference call.
- Construction and special-waste landfill volumes: total volume improved to -0.1%, but the specific landfill tonnage drop (-10% to -11% last quarter) will only be clear on the call.
- Renewable natural gas (RNG) plant schedule: the release gave no update on whether four facilities remain on track for 2027.
- Executive pay and tax advance: GFL paid $0 in cash remuneration to its founder in Q3 after $74.2 million in the first half, and the release did not state whether the $33.5 million CEO relocation tax receivable has been repaid.
👓 Other Themes
Diesel Surcharges Cushion the Macro Backdrop
Dovigi noted that GFL operated "in the face of a challenging macroeconomic backdrop" during the quarter and faced "incremental headwinds from diesel prices". Because the waste group bills fuel surcharges on a one-quarter delay, third-quarter surcharges rose 1.5% and offset the higher pump prices, assuming no further changes to fuel or commodity markets for the rest of the year.
💲 Other KPIs
Money owed by customers more than doubled from $802.0 million at the end of 2025 and jumped 64% from $983.3 million in the second quarter. The increase reflects the addition of SECURE's customer accounts at quarter-end alongside a $61.5 million cash drain from working capital during the third quarter.
The average share count used to calculate per-share earnings rose 4.2% from a year ago and 6.7% from the second quarter. Because the environmental services provider issued stock to pay for SECURE and bought back no shares in the quarter, total diluted shares at period-end reached 468.5 million, up from 389.2 million in June.
Capital spending on trucks, bins, and landfill cells fell 17.4% from $289.5 million a year ago, dropping to 11.1% of revenue from 17.1% in last year's third quarter. Management also spent $34.4 million on recycling and sustainability growth projects, down from $54.4 million a year earlier.
🔮 Guidance
Raised. The middle of the full-year sales plan moved up $545 million to $8,065 million, or 21.9% growth for the year, as it now includes acquisitions closed by October 1. By our math, that leaves $2,318.1 million for the fourth quarter, a 37.5% jump from last year's fourth quarter. This is the third raise of the year: +$330M, +$190M, +$545M.
Raised. The operating profit outlook rose $202.5 million at the middle of the range to 25.6% growth for the year. By our math, that points to $744.1 million in the fourth quarter, up 46.3% from a year ago. It is the third raise in 2026: +$90M, +$60M, +$202.5M.
Raised. The full-year margin target moved up 0.4 percentage points to 30.9%, or 0.9 percentage points above 2025's full-year level, as higher-margin SECURE assets join the business. By our math, the fourth-quarter revenue and profit targets imply a 32.1% margin in the final quarter, up from 30.2% in last year's fourth quarter.
Raised. The cash flow plan increased by $120 million to 34.9% growth for the year. By our math, GFL needs $535.1 million of Adjusted Free Cash Flow in the fourth quarter to hit the target, which is 26.0% higher than last year's fourth quarter. Third raise this year: +$15M, +$50M, +$120M.
Raised. Full-year net capital spending (property and equipment purchases minus asset sales) moved up $60 million to cover the larger acquired fleet. With $878.9 million already spent net of disposals in the first nine months, the plan leaves just $31.1 million of net capital spending for the fourth quarter.
Raised. Expected cash interest payments rose by $10 million after long-term debt increased to $11.67 billion. With $371.7 million paid in the first nine months, the outlook implies about $83.3 million of cash interest in the fourth quarter, down from $172.5 million in the third quarter due to bond payment timing.
Unchanged. Management kept its year-end debt target in the mid-3s, down from 3.8 times at the end of September. Hitting 3.5 times on the current $2,988 million Run-Rate EBITDA would require reducing net debt by about $940 million in the fourth quarter, or growing Run-Rate EBITDA further.
❓ Key Questions
Why did GFL omit fourth-quarter targets from the release?
On prior calls, management gave explicit revenue, margin, and cash flow numbers for the quarter ahead. Because the full-year outlook implies a 37.5% fourth-quarter revenue jump, investors need to know how much of that comes from SECURE versus the base waste business.
What drove the 2.3-point drop in US operating margins?
Canada's Adjusted EBITDA margin rose 2.1 percentage points to 35.7%, but the US margin fell 2.3 percentage points to 33.8%. Management did not separate how much of the US drop came from lower-margin acquisitions versus fuel and labor costs.
How will the special committee protect minority shareholders?
With final buyout bids due November 9, the release does not state whether a going-private deal will require approval from a majority of outside shareholders, especially if the founder rolls his stake into the buyout.
Has the chief executive repaid the $33.5M tax advance?
GFL paid $33.5 million of personal relocation taxes for its chief executive in 2025 and carried it as a receivable. Because the release omits balance-sheet notes, investors cannot see if the loan was repaid.