Waste Management, Inc. (WM) Earnings

Waste Management, Inc.

WM · NYSE

Symbol: WM
Type: Stock
Sector: Utilities
Industry: Refuse Systems
Exchange: NYSE

WM ( WM.com ) is North America's leading provider of comprehensive environmental solutions. Previously known as Waste Management and based in Houston, Texas, WM is driven by commitments to put people first and achieve success with integrity. WM, through its subsidiaries, provides collection, recycling and disposal services to millions of residential, commercial, industrial, medical and municipal customers throughout the U.S. and Canada. With innovative infrastructure and capabilities in recycling, organics and renewable energy, WM provides environmental solutions to and collaborates with its customers in helping them pursue their sustainability goals. In North America, WM has the largest disposal network and collection fleet, is the largest recycler and is a leader in beneficial use of landfill gas, with a growing network of renewable natural gas plants and the most landfill gas-to-electricity plants, as well as the largest heavy-duty natural gas truck fleet in the industry.

Key Issues

Bullish view

Pricing discipline is supporting operating EBITDA growth even as volumes soften, suggesting WM can protect revenue quality and profitability through contractual increases and execution.

Bearish view

Softer volumes could constrain organic growth, and pricing may not fully offset weaker demand or operational pressure if customers reduce activity.

Analyst Consensus

See all

Buy

18 analysts

$218

Current

—

Low

$266

Average

—

High

Average target implies +21.73% versus the current price.

Earnings History

BeatMissNo estimate

Sep 2026upcoming

Next quarter

Reports Oct 26, 2026.

Consensus is $2.18 EPS for Sep 2026 across 10 estimates, ranging $2.14 to $2.26.

WM Jun 2026

Reported Jul 28, 2026

: 1.51%
: -1.17%

: $1.99
: $2.02
: —
: $6.68B

Reported results

: $6.68B; from $6.43B
: 40.83%; from 40.86%
: $1.25B; from $1.15B
: 18.75%; from 17.90%
: $785.00M; from $726.00M
: $1.95; from $1.80

Highlights

Earnings beat: Adjusted diluted EPS was $2.02, 1.5% above the $1.99 consensus; GAAP diluted EPS was $1.95 versus $1.80 a year ago and $1.79 in Q1 2026.
Revenue growth: Revenue increased 4.0% year over year to $6.684 billion, supported by 5.7% core price, 3.6% Collection and Disposal yield and higher energy surcharges.
Underlying EBITDA: Adjusted operating EBITDA rose 5.5% to $2.067 billion and adjusted margin expanded 40 basis points to 30.9%; excluding prior-year wildfire cleanup, EBITDA growth was 9.1%.
Core business: Collection and Disposal operating EBITDA increased $79 million on an adjusted basis, overcoming a 70-basis-point segment headwind from prior-year wildfire activity.
Volume pressure: Collection and Disposal volume declined 1.8%, although excluding wildfire cleanup the decline was 0.4%; landfill volumes grew 1.7% and residential losses improved sequentially by 210 basis points.
Sustainability businesses: Recycling and Renewable Energy adjusted operating EBITDA rose $40 million, or 32.5%, aided by automation, higher recycling volumes and increased renewable natural gas production despite lower commodity prices.
Cash generation: Operating cash flow rose nearly 12% to $1.726 billion and free cash flow increased 34.5% to $1.104 billion, helped by earnings, working capital and lower capital spending.
Shareholder returns: WM returned $1.04 billion during the quarter through $659 million of repurchases and $379 million of dividends; it repurchased 3.0 million shares at an average $223.94.
Outlook reset: WM maintained 2026 adjusted EBITDA of $8.15 billion-$8.25 billion and free cash flow of $3.75 billion-$3.85 billion, while lowering revenue guidance by about 0.6% to $26.275 billion-$26.475 billion.

Analysis

WM delivered a solid second quarter, with adjusted EPS of $2.02 modestly ahead of the $1.99 consensus. Revenue of $6.684 billion rose 4.0% from $6.430 billion a year ago and increased 7.3% from $6.23 billion in Q1. GAAP operating income grew 8.9% year over year to $1.253 billion, while net income rose 8.1% to $785 million; sequentially, operating income increased 12.6% and net income 8.6%. GAAP diluted EPS was $1.95, up from $1.80 last year and $1.79 in the prior quarter.

The print was defined by pricing power and productivity offsetting softer volumes, by accelerating contributions from sustainability investments, and by unusually strong cash conversion. Adjusted operating EBITDA grew 5.5% to $2.067 billion, with margin up 40 basis points to 30.9%; excluding the prior-year wildfire cleanup benefit, growth was 9.1%. Collection and Disposal volume fell 1.8%, but adjusted for wildfire activity the decline was only 0.4%, while landfill volumes grew 1.7%. Free cash flow rose 34.5% to $1.104 billion, enabling $1.04 billion of shareholder returns. WM lowered revenue guidance because of volume expectations but retained its original EBITDA and free cash flow targets, implying greater reliance on pricing and cost flexibility in the second half.

Pricing offsets volume

Revenue bridge: The $254 million year-over-year revenue increase comprised $277 million of average-yield growth, a $22 million volume headwind, $33 million from acquisitions, a $5 million divestiture headwind and $1 million of foreign-currency benefit.
Collection and Disposal: The business generated $181 million of yield growth, or 3.6% of related revenue. Commercial, industrial and residential yield were 4.0%, 3.4% and 6.1%, respectively, while landfill yield was 2.5%.
Volume mix: Reported Collection and Disposal volume declined 1.8%, mainly because the prior year included wildfire cleanup. Excluding that comparison, landfill volume grew 1.7% and Collection and Disposal volume declined 0.4%; intentional shedding of lower-margin residential contracts remained a factor.
Energy surcharges: Energy surcharge and mandated-fee revenue increased $102 million, reflecting diesel prices approximately 50% above the prior-year quarter. This benefited revenue but created a 40-basis-point headwind to company adjusted EBITDA margin.

Margins and segments

Company profitability: Reported operating margin increased to 18.7% from 17.9%, while adjusted operating EBITDA margin rose to 30.9% from 30.5%. Operating expenses were broadly stable at 59.2% of revenue, and adjusted SG&A improved 60 basis points to 9.9%.
Collection and Disposal: Operating EBITDA increased $104 million as reported, or $79 million adjusted, to $2.115 billion. Price-to-cost spread, lower frontline turnover and cost controls outweighed wildfire-related comparison pressure.
Recycling and Renewable Energy: Combined adjusted operating EBITDA increased $40 million, or 32.5%, to $163 million. Automation, higher recycling volumes, three new RNG facilities and increased RNG production outweighed lower prices for recycled commodities, RINs and natural gas.
Healthcare Solutions: Adjusted operating EBITDA increased $11 million to $121 million, driven by SG&A management and integration synergies. Revenue declined 0.5% to $638 million as lower volumes more than offset pricing.

Cash flow and returns

Cash generation: Net cash from operations increased $181 million to $1.726 billion. Free cash flow rose $286 million to $1.104 billion, as lower collection-vehicle spending and reduced sustainability project investment complemented stronger earnings and working capital.
Capital intensity: First-half capital expenditures were $1.280 billion versus $1.563 billion a year ago. Sustainability growth investment was $75 million in the quarter versus $160 million, reflecting the transition from peak construction toward harvesting project returns.
Shareholder distributions: WM paid $379 million of dividends and repurchased $659 million of stock in the quarter. For the first half, repurchases totaled $1.003 billion and dividends $764 million; $2.0 billion remained under the repurchase authorization at June 30.
Balance sheet: Total debt was $23.356 billion versus $22.907 billion at year-end, with $557 million of cash. About $3.8 billion of debt matures or reprices within 12 months, including $1.1 billion of commercial paper, while $2.7 billion was classified as long term based on intended refinancing capacity.

Growth projects

WM completed three renewable natural gas facilities during the quarter—two in South Carolina and one in Florida—with approximately 3.5 million MMBtu of expected annual run-rate production. It also completed a Denver recycling facility adding about 60,000 tons of annual processing capacity. These projects helped drive higher recycling and renewable-energy volumes and supported the 32.5% increase in combined adjusted EBITDA in those businesses, even as realized prices weakened: single-stream recycled commodities averaged about $75 per ton versus $84, RINs $2.33 versus $2.53 and natural gas $2.23 per MMBtu versus $2.81 a year earlier.

2026 outlook

Revenue: Full-year revenue guidance was reduced approximately 0.6% from the prior outlook to $26.275 billion-$26.475 billion, primarily because of lower volume expectations, partly offset by higher energy surcharges.
Profitability: WM retained adjusted operating EBITDA guidance of $8.15 billion-$8.25 billion and raised the expected adjusted EBITDA margin range by 20 basis points to 31.0%-31.2%, relying on cost flexibility and productivity to absorb the lower revenue outlook.
Cash flow: Free cash flow guidance remained $3.75 billion-$3.85 billion, including approximately $250 million of sustainability growth investment for the year. The company characterized the portfolio as moving from construction into a period of harvesting returns.