Waste Management, Inc. (WM) Earnings

Waste Management, Inc.

WM · NYSE

Symbol: WM
Type: Stock
Sector: Utilities
Industry: Environmental Services
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

$233

Current

—

Low

$260

Average

—

High

Average target implies +11.59% versus the current price.

Earnings History

BeatMissNo estimate

Dec 2026upcoming

Next quarter

Expected to report Jan 27, 2027 — estimated from last year’s reporting date.

Consensus is $2.05 EPS for Dec 2026 across 10 estimates, ranging $1.98 to $2.15.

WM Sep 2026

Reported Oct 27, 2026 · after the close

: 1.38%
: -4.52%

: $2.18
: $2.15
: —
: $6.85B

Reported results

: $6.85B; from $6.44B
: 40.21%; from 41.05%
: $1.28B; from $989.00M
: 18.68%; from 15.35%
: $820.00M; from $603.00M
: $2.05; from $1.49

Highlights

EPS and expectations: The supplied consensus comparison shows EPS of $2.15 versus $2.18 expected, a 1.4% miss; WM reports adjusted diluted EPS of $2.15 and GAAP diluted EPS of $2.05.
Revenue growth: Q3 revenue rose 6.3% year over year to $6.846 billion and 2.5% from Q2’s $6.68 billion, led by pricing, energy surcharges, and recycling and renewable energy activity.
Underlying earnings: Adjusted operating EBITDA increased 5.8% year over year to $2.121 billion, while its margin eased 10 basis points to 31.0%; GAAP operating income rose to $1.279 billion from $989 million, against prior-year impairment charges.
Pricing versus volume: Core price was 5.8%, and Collection and Disposal yield grew 3.4%; Collection and Disposal volume fell 0.5% on a workday-adjusted basis as WM shed lower-margin residential business and faced commercial declines.
Healthcare Solutions: Revenue grew 3.7% to $651 million and adjusted operating EBITDA rose more than 30% to $146 million, with margin expanding to 22.4% from 17.5% on pricing, cost improvements, and synergies.
Cash generation and returns: Nine-month operating cash flow rose 12% to $4.867 billion and free cash flow increased 42% to $3.009 billion; WM returned $957 million to shareholders in Q3 and $2.72 billion in the first nine months.
Guidance: WM affirmed its 2026 ranges, expecting revenue and free cash flow at the high ends of $26.275–$26.475 billion and $3.75–$3.85 billion, respectively, with adjusted operating EBITDA of $8.15–$8.25 billion.

Analysis

WM delivered higher revenue and earnings year over year, though the supplied EPS comparison indicates a modest miss: $2.15 versus $2.18 expected, or 1.4%. The company’s release identifies $2.15 as adjusted diluted EPS, up from $1.98 a year ago; GAAP diluted EPS was $2.05, versus $1.49. Revenue of $6.846 billion grew 6.3% year over year and 2.5% from Q2. GAAP operating income increased 29% to $1.279 billion, but that comparison benefits from $252 million of prior-year adjustments, including impairments; adjusted operating EBITDA grew a more measured 5.8% to $2.121 billion, with margin down 10 basis points to 31.0%.

The quarter centered on strong pricing and execution in the core business, alongside ongoing cost pressure and improving contributions from newer growth platforms. Core price of 5.8% and Collection and Disposal yield of 3.4% helped offset a 0.5% workday-adjusted volume decline in that business. Fuel and risk-management costs weighed on margins, even as SG&A discipline and Healthcare Solutions synergies helped. Healthcare Solutions’ revenue rose 3.7% and adjusted EBITDA grew more than 30%. Cash generation strengthened: nine-month free cash flow reached $3.009 billion, up more than 42%, supporting $957 million of Q3 shareholder returns. WM affirmed full-year guidance and expects revenue and free cash flow near the high ends of its ranges.

Pricing and collection volumes

Revenue drivers: Total revenue increased $403 million, or 6.3%, to $6.846 billion. Internal revenue growth was 5.9%, led by $326 million of average-yield growth, including $171 million from Collection and Disposal and $112 million from energy surcharges and mandated fees.
Core pricing: Core price was 5.8%; Collection and Disposal yield increased 3.4%. Yield gains reflected pricing across collection, landfill, and transfer operations, with commercial, industrial, and residential collection yield up 4.2%, 3.1%, and 5.4%, respectively.
Volumes: Collection and Disposal volume declined 0.5% on a workday-adjusted basis. Management attributed the weakness to intentional shedding of lower-margin residential business and commercial declines tied largely to prior national-account broker losses. Recycling and renewable energy volumes benefited from completed growth projects.

Margins and operating costs

Adjusted profitability: Adjusted operating EBITDA was $2.121 billion, up 5.8% year over year, while adjusted margin was 31.0% versus 31.1%. Price-to-cost spread in Collection and Disposal added 40 basis points and Healthcare Solutions added 30 basis points; higher fuel and risk-management costs each subtracted 40 basis points.
Cost pressure: Operating expenses rose to $4.093 billion, or 59.8% of revenue, from 58.9%. Higher fuel, risk-management costs, wages, and medical costs more than offset Collection and Disposal efficiency, which improved operating expense ratio by 40 basis points.
SG&A discipline: SG&A fell to $655 million from $665 million and improved to 9.6% of revenue from 10.3%; adjusted SG&A margin improved to 9.3% from 10.0%. WM cited lower labor costs and continued acquisition synergies, particularly from Stericycle.
GAAP comparison: GAAP operating income rose to $1.279 billion from $989 million, and GAAP net income increased to $820 million from $603 million. The year-ago quarter included $252 million of adjustments, chiefly impairments; current-quarter adjustments totaled $50 million.

Growth businesses

Healthcare Solutions: Revenue increased 3.7% to $651 million. Adjusted operating EBITDA increased to $146 million from $110 million, and adjusted margin expanded to 22.4% from 17.5%, reflecting pricing, cost management, and synergy capture. Reported income from operations was $20 million, compared with a $21 million loss a year ago.
Recycling: Segment revenue rose to $441 million from $372 million. Operating income was $36 million versus a $137 million loss, although the prior-year result included a $152 million impairment charge. Higher commodity prices versus last year, increased volumes, and automation contributed to the improvement.
Renewable energy: Revenue increased to $167 million from $115 million and operating income to $37 million from $21 million, mainly on volumes from completed projects. WM opened its eighteenth new renewable natural gas facility since 2022; lower renewable identification credit pricing partly offset gains.

Cash flow and shareholder returns

Quarterly cash: Operating cash flow was $1.640 billion, up from $1.592 billion, and free cash flow was $985 million versus $821 million a year earlier. Lower capital spending contributed to the free-cash-flow increase.
Year-to-date generation: Nine-month operating cash flow rose 12% to $4.867 billion, supported by earnings growth and favorable working capital. Free cash flow reached $3.009 billion versus $2.114 billion, an increase of more than 42%; conversion of adjusted EBITDA to free cash flow was 50%.
Capital returns: WM returned $957 million in Q3 through $580 million of repurchases and $377 million of dividends. Nine-month returns exceeded $2.72 billion, including $1.58 billion of share repurchases; the company continues to expect $2 billion of repurchases for 2026.

2026 outlook

WM affirmed its full-year guidance and said it remains on track to meet its financial objectives. Revenue is expected at the high end of the $26.275–$26.475 billion range, adjusted operating EBITDA within the $8.15–$8.25 billion range, and free cash flow at the high end of $3.75–$3.85 billion. The company’s shift from peak construction of sustainability growth projects toward harvesting returns is reflected in lower planned growth investment: nine-month sustainability capital spending was $191 million, down from $429 million in the prior-year period.