Enviri’s third quarter results saw a positive market reaction, despite a flat topline and a notable miss on adjusted profitability metrics. Management attributed the quarter’s mixed performance to continued strength in the Clean Earth business, which delivered margin expansion and healthy volume growth in hazardous waste, while Harsco Environmental and Rail segments faced operating headwinds. CEO F. Nicholas Grasberger highlighted that Clean Earth’s execution remains high, even amid distractions stemming from the ongoing strategic review and potential divestiture, and cited “healthy volume growth as a result” of new commercial strategies. The company also pointed to ongoing challenges in Rail due to subdued demand and project timing, which weighed on overall results.
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Enviri (NVRI) Q3 CY2025 Highlights:
- Revenue: $574.8 million vs analyst estimates of $573.2 million (flat year on year, in line)
- Adjusted EPS: -$0.08 vs analyst estimates of -$0.03 (significant miss)
- Adjusted EBITDA: $74.41 million vs analyst estimates of $82.17 million (12.9% margin, 9.4% miss)
- Management lowered its full-year Adjusted EPS guidance to -$0.68 at the midpoint, a 65.9% decrease
- EBITDA guidance for the full year is $273 million at the midpoint, below analyst estimates of $297.3 million
- Operating Margin: 3.6%, in line with the same quarter last year
- Market Capitalization: $1.08 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Enviri’s Q3 Earnings Call
- Lawrence Scott Solow (CJS Securities) pressed for more detail on the timing and confidence around the strategic review. CEO F. Nicholas Grasberger reiterated strong interest and a goal to conclude the process by year-end, but provided limited additional specifics.
- Lawrence Scott Solow (CJS Securities) questioned the drivers of lowered guidance, particularly the $27 million EBITDA delta. CFO Thomas G. Vadaketh confirmed that the majority of the reduction is due to Rail, with smaller impacts from Harsco Environmental.
- Lawrence Scott Solow (CJS Securities) asked about the volatility in Clean Earth’s soil and dredge margins and project timing. Grasberger explained that performance is driven by project mix and timing, not by overall demand or market share.
- Robert Duncan Brown (Lake Street Capital Markets) inquired about expected multiples for a potential Clean Earth sale. Grasberger stated that management expects valuations in line with precedent transactions in the industry.
- Robert Duncan Brown (Lake Street Capital Markets) probed the baseline EBITDA outlook for Rail excluding ETO contracts. Vadaketh noted that current demand is below historical norms, but a medium-term recovery to $35-40 million is likely as contracts complete and overhead is reduced.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will monitor (1) progress on the Clean Earth strategic review and the company’s ability to execute a tax-efficient separation, (2) evidence of stabilization or recovery in Rail equipment and aftermarket demand, and (3) the impact of cost reduction initiatives in Harsco Environmental on segment margins. Additionally, any developments in European steel safeguard measures and project mix in Clean Earth’s backlog will be key indicators of future performance.
Enviri currently trades at $13.39, up from $12.19 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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