GFL Environmental Inc. - Ordinary Shares (Sub Voting)

Q2 performance: strong growth + margin expansion despite tough comps - Revenue +16.3% YoY (incl. +6.4% organic, 180 bps faster than Q1); pricing +6.1% (20 bps ahead of plan). - Volume nearly +100 bps ahead of plan, helped by rebound in winter-related delays and EPR benefits; offset by lower C&D and special waste volumes (external C&D activity down; landfill/special waste down ~10% in the quarter). - Adjusted EBITDA margin 30.4% (includes ~65 bps headwind from M&A). Canadian segment margin 34%, highest ever. - Adjusted free cash flow (FCF) $237M, ahead of guide (timing benefits: working capital vs net CapEx/closure costs).

Key headwind: diesel price spikes + lag in fuel surcharge pass-through - Direct diesel unit costs up ~60% YoY; third-party transport providers added incremental fuel surcharges, creating a ~$5M Q2 headwind vs guide. - Management says surcharges are increasingly covering the higher fuel cost, but until diesel normalizes, results carry “unrecovered” initial inflection costs due to timing/lag. - Investors should treat margin as sensitive to whether diesel stays elevated or drops in H2.

Full-year 2026 guidance raised (top-to-bottom) - Company expects >15% adjusted EBITDA growth and ~20% adjusted free cash flow growth vs prior year. - New guidance (assuming current FX/commodity/diesel assumptions): - Revenue: $7.52B - Adjusted EBITDA: $2.29B - Adjusted FCF: $900M - Cash interest: $445M; net CapEx: $850M - Assumptions: full-year pricing just over 6%; volume about -50 bps (conservative given macro). Any improvement in C&D is upside.