GFL Environmental reported strong Q3 2022 earnings, despite headwinds brought on by inflationary pressures.

The company showed a revenue of $1.8 billion, an increase of 32.6 percent year over year, contributed to volume boosts in GFL's Environmental Services as well as mergers and acquisition activity. 

 "Our results this year show the continuing maturity of our business model, allowing us to perform exceptionally well in the face of unprecedented cost headwinds," Patrick Dovigi, Founder and CEO. "The challenging environment also demonstrated the business's capability to manage leverage, allowing us to maintain, on a constant currency basis, Net Leverage within our targets despite a 300 to 400 basis point rise in rates and the deployment of over $1.1 billion into M&A. We remain committed to continuing to deliver meaningful reductions to our leverage ratio over the near term."

Envrionmental services revenue rose to $364.4 million, with an organic growth rate of 37 percent based on industrial collection and processing activities.

Adjusted EBITDA reached $473.3 million in Q3 2022, up 18.4 percent from Q3 2021. 

"Looking forward to 2023, we believe we are already well positioned to achieve high single-digit organic revenue growth," Dovigi said. "When combined with 3.0 percent M&A roll over revenue already in hand and the impact from current commodity prices and foreign exchange rates, we expect to indicate at least 12.0 percent revenue growth when we provide our 2023 guidance next quarter. In terms of profitability, we believe the widening spread between price and cost inflation will allow for a year of outsized Adjusted EBITDA margin expansion, likely in excess of 100 basis points, which should translate into Adjusted EBITDA growth in the high teens. Additionally, we continue to see incremental upside opportunities ahead of us resulting from our robust M&A pipeline and organic growth initiatives."

Q3 2022 Highlights

Revenue: $1.83 billion
Adjusted EBITDA: $473.3 million
Net Loss from Continuing Operations: Decreased to $183.7 million in the third quarter of 2022, compared to $316.1 million in the third quarter of 2021.
Adjusted Free Cash Flow: $97 million