Waste Management Inc
Q2 2026 Earnings
Market Reaction
Did WM Beat Earnings? Q2 2026 Results
Waste Management posted a mixed but ultimately encouraging second quarter in 2026, beating on the bottom line while falling just short on revenue. Adjusted diluted EPS came in at $2.02, topping the consensus estimate of $1.98 by 2.14%, while revenue of $6.68 billion rose 4.0% year-over-year but edged 0.40% below analyst expectations of $6.71 billion. The modest revenue shortfall traced largely to a volume comparison distorted by wildfire cleanup work that padded the year-ago period, with underlying Collection and Disposal fundamentals remaining solid; core pricing of 5.7% continued to anchor the top line. Profitability was the standout story, with adjusted operating EBITDA growing 5.5% to $2.07 billion and margin expanding 40 basis points to 30.9%, while free cash flow surged 34.5% to $1.10 billion. Investors tracking WM's renewable energy ambitions got additional cause for optimism, as recycling and renewable energy EBITDA grew 32.5% year-over-year. Looking ahead, WM reaffirmed its full-year free cash flow guidance of $3.75 to $3.85 billion and raised its adjusted operating EBITDA margin outlook to 31.0% to 31.2%, even as it trimmed its revenue forecast modestly.
- Core price of 5.7% and Collection and Disposal yield of 3.6% drove revenue growth
- Adjusted operating EBITDA grew 5.5%, or 9.1% excluding prior-year wildfire cleanup contributions
- Favorable price-to-cost spread reflecting continued success in reducing frontline turnover and disciplined cost management
- Recycling and renewable energy operating EBITDA grew 32.5% on an adjusted basis driven by higher recycling volumes and increased renewable natural gas production
- SG&A expenses improved 60 basis points as a percentage of revenue on both a reported and adjusted basis (9.9% vs 10.5%)
- Cash flow from operations increased nearly 12% driven by operating EBITDA growth and working capital improvements
- Technology and automation investments driving productivity gains
- Recycling commodity rebates increased to $180 million from $139 million year-over-year, contributing 0.9% impact on adjusted operating EBITDA margin
“Second quarter earnings growth, margin expansion, and cash flow generation reflect the strength of our business model and consistent execution from the WM team. Adjusted operating EBITDA grew 5.5%, or 9.1% when removing contributions from wildfire cleanup activities in the prior year. Each of our operating segments contributed to growth in adjusted operating EBITDA and margin, led by the Collection and Disposal business and bolstered by our healthcare and sustainability businesses. The momentum across our operations and our confidence in the ability to execute our strategy position us well to achieve strong 2026 results.”
Waste Management CEO, on the earnings call
Forward Guidance & Outlook
WM reaffirmed its full-year 2026 adjusted operating EBITDA guidance of $8.15 to $8.25 billion and free cash flow guidance of $3.75 to $3.85 billion. Revenue outlook was revised to $26.275 to $26.475 billion, a reduction of approximately 0.6% compared to prior guidance, primarily driven by lower volume expectations partially offset by higher energy surcharges. Adjusted operating EBITDA margin is now expected to be between 31.0% and 31.2%, representing a 20 basis point increase from prior guidance. The projected free cash flow reconciliation shows net cash from operating activities of $6.3 to $6.45 billion, capital expenditures of $2.4 to $2.5 billion, divestiture proceeds of $100 to $150 million, and sustainability growth investments of $250 million. The company expressed confidence that its ability to flex costs and drive productivity supports achieving original profitability and cash flow targets despite slightly lower revenue.
WM YoY Financials
WM Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.