Enviri (NYSE:NVRI) executives reviewed fourth-quarter and full-year 2025 results and provided an outlook for the two businesses that are expected to comprise “New Enviri” following the planned sale of Clean Earth and subsequent spin-off. Management reiterated that the company is targeting a midyear closing for the Clean Earth transaction and outlined key operational priorities for Harsco Environmental and Rail.
Clean Earth sale timeline and cash payout considerations
Chairman and CEO Nick Grasberger said the company continues to target a midyear closing for the sale of Clean Earth, noting the Hart-Scott-Rodino (HSR) waiting period is scheduled to expire on March 9 absent a request for additional information. Grasberger said the company expects to publicly file both its Form 10 and proxy documents later in March, after which it will focus on scheduling a shareholder meeting and setting a closing date.
Full-year 2025 performance: Clean Earth growth offset by HE and Rail declines
CFO Tom Vadaketh said Enviri ended 2025 with quarterly adjusted earnings “towards the high end” of expectations. Full-year 2025 revenue totaled $2.2 billion, led by 4% growth at Clean Earth driven by a mix of price increases and volume growth. That growth was offset by lower revenue at both Harsco Environmental (HE) and Rail, which Vadaketh attributed mainly to lower volumes and, for HE, divestitures.
Adjusted EBITDA for the year totaled $275 million, with Clean Earth delivering record earnings and margins in 2025, according to management. Vadaketh said market challenges persisted at HE during the year but that performance improved as 2025 progressed, aided by operational execution and a larger-than-normal volume of contract renewals. For Rail, management said standard equipment demand remained weak and ETO contracts continued to weigh on earnings and cash flow, although the base business remained profitable in 2025 and cash flow improved.
Vadaketh quantified Rail’s ETO impacts for 2025, saying the contracts contributed an EBITDA loss of approximately $20 million and consumed roughly $40 million of cash during the year. He said the company has been taking “aggressive actions” to manage ETO risk and address weak demand, including an additional restructuring to rightsize the business.
Fourth-quarter results: HE strength and one-time items
For the fourth quarter, Enviri reported total revenue of $556 million and adjusted EBITDA of $70 million, both unchanged versus the prior-year quarter. Vadaketh said year-over-year growth at HE and Clean Earth was offset by Rail. He cited HE as the primary driver of the quarter’s performance, as the segment posted its highest quarterly adjusted EBITDA of the year due to better cost performance, unanticipated tax recoveries in Brazil, and year-end price and other adjustments. Rail also benefited from additional machine shipments versus earlier expectations, while corporate costs were higher than expected due to compensation expense tied to share performance and other incentives.
Adjusted diluted loss per share was $0.17 for the quarter, excluding “unusual items.” Vadaketh said unusual items totaled $57 million pre-tax and included:
- $15 million of costs directly related to the Clean Earth sale and the New Enviri spin-off
- $7 million to accelerate vesting of certain stock compensation to mitigate the company’s tax impact, which management also characterized as deal-related
- $24 million of additional estimated costs to complete Rail ETO projects with SBB and Deutsche Bahn
Adjusted free cash flow was $6 million in the fourth quarter. For the full year, adjusted free cash flow was negative $15 million, which management said was better than its latest guidance due to improved collections in the fourth quarter. Vadaketh said HE and Clean Earth generated more than $160 million of free cash flow during the year, but this was offset by interest expense of more than $100 million and Rail’s negative cash flow of more than $50 million.
Segment detail: HE improves; Rail remains challenged
Harsco Environmental: Fourth-quarter revenue was $257 million, up 7% year over year, and adjusted EBITDA was $48 million, implying a margin of nearly 19%. Vadaketh attributed the earnings improvement to higher service levels, performance actions at certain underperforming sites, foreign exchange, and Brazil tax recoveries, partially offset by lower product contribution largely tied to the ALTEK business. HE’s quarter was supported by a modest increase in steel production at customer sites, with growth most prominent in India, the Middle East, and North America. Steel output in Europe—HE’s largest market—remained “very weak.” Management noted EU trade measures that could support European steel are not included in 2026 guidance; customer expectations are that policy changes could become effective at the beginning of July.
In the Q&A, management described steel production expectations as “stable and hopefully improving” later in the year, while noting continued weakness in Europe. The company also said it has exited certain contracts primarily due to pricing, with an expectation that contract churn will be positive to EBITDA and margin beyond 2026 given pipeline visibility.
Clean Earth: Fourth-quarter revenue was $244 million and adjusted EBITDA was $38 million. Hazardous waste revenue grew about 3% through a mix of price and volume, partially offset by lower volume tied to project work completed in the prior-year quarter and mix changes in soil dredged materials. Adjusted EBITDA margin was just under 16%, including higher incentive compensation.
Rail: Fourth-quarter revenue was $56 million and adjusted EBITDA was a loss of $4 million. Management cited lower volume across business lines and a weaker mix. Vadaketh said the Rail team improved manufacturing processes, completed several smaller ETO projects, and implemented restructuring actions during 2025 to resize capacity.
2026 outlook for New Enviri businesses and ETO de-risking priorities
Because 2026 is expected to include a mix of Enviri and New Enviri results due to the anticipated midyear closing and transition services provided to Veolia, management provided guidance only for HE and Rail. Vadaketh said the outlook assumes no major improvement in economic fundamentals, including no assumed uplift from European trade protections, and assumes Rail demand softens further relative to 2025 with volumes reaching “historic lows.”
Guidance for 2026 calls for HE adjusted EBITDA of $170 million to $180 million, reflecting volume from new site startups, modest improvement in customer steel output, and cost initiatives, offset by costs and certain items not repeating. For Rail, the company expects an EBITDA loss of $26 million to $19 million, reflecting lower demand for standard equipment and contract services and lower capacity utilization, partially offset by restructuring actions. Management said these translate to pro forma 2026 EBITDA for New Enviri of approximately $140 million, $5 million higher than what was presented in November, reflecting a rightsized corporate cost structure.
On cash flow, management said it expects “modest” free cash flow generation for New Enviri in 2026 and reminded investors that first-quarter free cash flow is typically negative due mainly to bond interest payments. Vadaketh said Rail’s ETOs are expected to remain negative in 2026 under existing contracts. In the Q&A, he characterized pro forma free cash flow as roughly breakeven or slightly worse than breakeven, driven by better cash flow in HE and less negative cash flow in Rail, partly offset by corporate items.
President and COO Russell Hochman, who is slated to become CEO of New Enviri, emphasized de-risking Rail’s ETO exposure as a “critical priority” for 2026. He said two Rail cost-out restructurings have been completed, including one in January, and cited actions to reduce third-party inventory management costs, improve the materials supply chain, reduce inventory, and optimize throughput. He also said New Enviri has begun streamlining central functions such as IT and launched a review of HE and Rail operations with third-party experts to identify additional efficiency and cost levers; management noted these benefits are not included in the 2026 plan.
On large European ETO contracts, management provided project status updates and said it is working to improve commercial terms. For Network Rail, Vadaketh said delivery and on-site testing of the first machine is planned for the summer and that the company expects to finalize revised contract negotiations soon after. For SBB, he said most of the first group of 48 wagons has been delivered and accepted, with the remainder expected to be accepted by the end of the third quarter, and delivery of a second vehicle type totaling 11 machines expected by mid-2027. For Deutsche Bahn, Vadaketh said the first three vehicles are scheduled to be completed and undergo homologation in coming quarters under the existing contract.
About Enviri (NYSE:NVRI)
Enviri Inc (NYSE: NVRI) is a provider of environmental monitoring, data intelligence and sustainability solutions for critical infrastructure and industrial operations. The company integrates Internet of Things (IoT) sensor hardware, cloud-based analytics and field services to collect, process and visualize environmental data. Enviri’s platform supports real-time monitoring and historical trend analysis across water, air and wastewater streams to help clients meet regulatory requirements and manage environmental risk.
Enviri’s product suite includes ruggedized sensor networks, remote data loggers, automated sampling systems and a web-based analytics portal.
