Waste Connections, Inc. Common Shares
WCN · NYSE
Next quarter
Reports Oct 20, 2026.
Consensus is $1.51 EPS for Sep 2026 across 10 estimates, ranging $1.41 to $1.54.
WCN Jun 2026
- 11.11%
- +0.05%
- $1.35
- $1.50
- —
- $2.56B
Reported results
- $2.56B
- 42.25%
- $437.55M
- 17.08%
- $296.40M
- $1.17
Highlights
- Adjusted EPS beat: Adjusted diluted EPS was $1.50 versus consensus of $1.35, an 11.1% surprise; reported diluted EPS was $1.17 versus $1.12 a year ago.
- Revenue growth: Second-quarter revenue rose 6.4% year over year to $2.562 billion, above expectations, and increased from $2.37 billion in the first quarter.
- EBITDA execution: Adjusted EBITDA increased 6.8% to $840.1 million, with a 32.8% margin versus 32.7% a year ago; management cited 70 basis points of underlying margin expansion.
- Pricing offset volume and costs: Solid-waste internal growth was 3.6%, led by 4.6% yield and 1.1% surcharges, while unit volume declined 1.9%; core price was 5.6%.
- Reported operating pressure: Operating income fell 4.8% year over year to $437.6 million because of $58.5 million of impairments and other operating items, primarily landfill closure and post-closure adjustments.
- Outlook raised: 2026 revenue guidance is now $10.02 billion-$10.05 billion and adjusted EBITDA guidance is $3.33 billion-$3.34 billion; adjusted free cash flow is expected at $1.40 billion-$1.45 billion.
- Acquisition pipeline: Acquisitions closed to date contributed $45.8 million of second-quarter revenue and $101.0 million year to date; the company said completed acquisitions carry more than $100 million of annualized revenue.
- Shareholder returns: Year-to-date share repurchases reached a record $614.5 million, or approximately 1.5% of shares outstanding, while the quarterly dividend increased to $0.350 per share from $0.315.
- Chiquita overhang: The company faces approximately 12,730 plaintiffs in Chiquita Canyon civil lawsuits, an unresolved regulatory enforcement process and a separate lawsuit seeking more than $825 million; potential losses remain unestimable.
Analysis
Waste Connections delivered a strong second quarter operationally, beating the supplied $1.35 consensus estimate with $1.50 of adjusted EPS, while revenue of $2.562 billion exceeded expectations and rose 6.4% year over year. Adjusted EBITDA increased 6.8% to $840.1 million, and the margin reached 32.8%. Compared with the first quarter, revenue rose from $2.37 billion, operating income increased from $364.1 million to $437.6 million and net income increased from $219.3 million to $296.4 million. Reported diluted EPS improved from $0.86 sequentially and from $1.12 in the year-ago quarter.
The print was defined by pricing-led growth and operating execution overcoming weaker volumes, higher fuel and trucking costs, and lower recycling commodity values. Core price was 5.6%, but unit volume declined 1.9%; nevertheless, solid-waste internal growth was 3.6%. GAAP operating income declined 4.8% year over year because of $58.5 million of impairment and closure-related charges, while adjusted net income rose 14.6% to $381.7 million. Management raised its full-year outlook, supported by improving commodities, acquisitions and fuel-cost recovery. Capital allocation was also prominent, with $614.5 million of repurchases in the first half, although debt rose to $9.36 billion and Chiquita Canyon litigation and regulatory exposure remain significant uncertainties.
Pricing and margin execution
The quarter showed Waste Connections converting pricing into growth despite a difficult cost and volume backdrop. Solid-waste internal growth was 3.6%, consisting of 4.6% yield and 1.1% surcharges, partly offset by a 1.9% unit-volume decline and a 0.2% recycling headwind. Core price was 5.6%.
- Cost absorption: Fuel expense increased $19.3 million, trucking costs rose $12.3 million and labor and recurring incentive compensation increased $10.6 million at existing operations. Even so, cost of operations declined to 57.7% of revenue from 57.9% a year ago.
- Segment performance: Segment EBITDA rose 6.6% to $821.9 million, with margin increasing to 32.1% from 32.0%. Eastern and Central posted the largest margin gains, while Canada remained the highest-margin segment at 43.5% but declined from 45.4% because of incremental volume, facility and fuel costs.
- Underlying versus GAAP: Adjusted EBITDA margin was 32.8%, but reported operating margin fell to 17.1% from 19.1% because $58.5 million of impairment and other operating items primarily reflected closure and post-closure liability adjustments.
Growth and 2026 outlook
Management raised the full-year outlook after the first-half beat, pointing to improved commodity trends, ongoing fuel-cost recovery and acquisition contributions. The guidance excludes acquisitions that may close later in the year, so the stated range is a base case rather than a full contribution estimate.
- Updated guidance: Revenue is expected at $10.02 billion-$10.05 billion, net income at $1.169 billion-$1.173 billion and adjusted EBITDA at $3.33 billion-$3.34 billion.
- Cash generation: Net cash from operating activities is expected at $2.63 billion-$2.68 billion, adjusted free cash flow at $1.40 billion-$1.45 billion and capital expenditures at approximately $1.25 billion.
- Acquisitions: Acquired businesses contributed $45.8 million of revenue in the quarter and $101.0 million in the first half, while management said completed transactions represent more than $100 million of annualized revenue and that it remains positioned for another active year.
Cash flow and capital allocation
Cash generation supported both expansion and shareholder returns. Six-month operating cash flow increased 8.4% to $1.279 billion from $1.180 billion, although adjusted free cash flow was $703.4 million, down slightly from $699.1 million on a reported basis after higher capital spending and adjustments.
- Repurchases: Waste Connections bought back 3.76 million shares for $614.5 million in the first half, equal to approximately 1.5% of shares outstanding, at an average price of $163.53 per share. A further 452,498 shares were repurchased after quarter-end for $77.5 million.
- Dividend: The quarterly dividend was $0.350 per share versus $0.315 a year earlier; first-half dividend payments were $177.1 million.
- Balance sheet: Debt and notes payable totaled $9.36 billion at June 30, up from $8.89 billion at year-end, while debt-to-book capitalization was 54%. The company had $2.275 billion drawn on its revolving facility and $687.3 million of availability.
- Investment intensity: Property and equipment capital expenditures were $598.9 million in the first half, supplemented by $51.0 million for undeveloped land, compared with $497.8 million of property and equipment spending in the prior-year period.
Revenue mix and demand
Collection remains the core of the business, while E&P and landfill-related revenue provided incremental growth. Reported collection revenue increased to $1.784 billion from $1.685 billion, and E&P waste revenue rose to $201.0 million from $169.8 million. Recycling revenue fell to $61.4 million from $66.8 million as cardboard and plastics pricing weakened.
- Volume conditions: Management reported $64.1 million of second-quarter volume losses, driven by lower roll-off and commercial collection volumes in Eastern, Southern and Canada, partly offset by higher landfill volumes in Central and Western.
- E&P and renewable energy: E&P growth reflected greater disposal capacity, resumed facility operations and higher production activity. Landfill gas revenue also increased by $8.4 million, supported by higher renewable energy credit values and gas generation.
- Seasonality: The second quarter benefited from the company’s normal seasonal pattern, in which revenue is generally higher in the second and third quarters than in the first and fourth quarters.
Chiquita Canyon exposure
The filing continues to identify Chiquita Canyon as a material legal, regulatory and operating uncertainty. The landfill ceased active waste disposal operations at the end of 2024 after operating restrictions made continued disposal uneconomic, while the elevated-temperature landfill event remains subject to regulatory orders, alleged violations and remediation activity.
- Civil claims: Approximately 12,730 plaintiffs were involved in Chiquita Canyon civil lawsuits as of July 21, 2026, alleging odors, chemical exposure, property damage and other harms. The company cannot estimate a likely outcome or potential loss range.
- Regulatory proceedings: The company has received approximately 476 air-quality notices of violation plus 30 additional notices from the South Coast Air Quality Management District, alongside proceedings involving the Water Board, DTSC, EPA and CARB. Potential penalties could be substantial but remain unestimable.
- Separate damages claim: Waste Connections filed a lawsuit against Los Angeles County and a regional water board seeking compensation exceeding $825 million for losses associated with the landfill’s closure; the matter is stayed pending a September 29, 2026 status conference.
- Other litigation: A separate Jefferson Parish odor mass action had 6,211 plaintiffs as of the filing, and the company is seeking appellate review of a ruling concerning the preclusive effect of an earlier general-causation decision.
