Waste Management Inc
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −0.53%.
Did WM Beat Earnings? Q3 2025 Results
Waste Management delivered a mixed third quarter for fiscal 2025, with impairment charges clouding what was otherwise a strong operational showing. Adjusted diluted EPS came in at $1.98, falling short of the $2.01 consensus by 1.62%, while revenue of $6.44 billion missed estimates by 0.85% — though it still represented a robust 14.9% increase year-over-year, buoyed by the addition of the former Stericycle business. The headline miss was driven largely by $152 million in charges tied to the suspension of a plastic film and wrap recycling operation, as collapsing post-consumer plastics pricing rendered the business unviable. Meanwhile, the core Collection and Disposal segment posted a record adjusted EBITDA margin of 38.4%, underscoring the durability of WM's pricing discipline. <a href="https://247wallst.com/investing/2025/10/27/waste-management-wm-stock-drops-after-earnings/">shares fell on the news</a> despite management affirming full-year adjusted EBITDA guidance of $7.47 to $7.63 billion and signaling that free cash flow could approach $3.80 billion in 2026, a figure that offered investors a longer-term anchor amid the near-term noise.
- Collection and Disposal core price of 6.0% and yield of 3.8%
- Record Collection and Disposal adjusted operating EBITDA margin of 38.4%
- Adjusted operating expenses as a percentage of revenue for WM Legacy Business improved 160 basis points
- Strong landfill volumes and growth in industrial collection volumes
- Improved driver retention and disciplined cost focus
- Strategic exit from low-margin residential collection business
- Capital investments in fleet and automation of recycling facilities
- Decline in cash taxes contributed to operating cash flow growth
- Lower adjusted effective tax rate of 21.9% vs. 23.3% in prior year
“Our third quarter results highlight momentum in WM's earnings growth and free cash flow conversion, which is driven by our strong operating platform, diverse and growing customer base, and expanding sustainability businesses. Our Collection and Disposal business delivered record-setting margin this quarter, underscoring the strength of our industry-leading asset network, strategic investments in technology, and disciplined pricing programs. We also achieved adjusted operating EBITDA growth in both our Recycling Processing and Sales and Renewable Energy segments despite commodity price headwinds, underscoring the value of our sustainability investments. Additionally, we continued to advance the integration of WM Healthcare Solutions, enhancing the breadth and value of services we offer to our customers. Strong results across all aspects of our business reinforce our confidence in achieving our full-year earnings and free cash flow guidance, as well as our long-term financial objectives and strategic priorities.”
Waste Management CEO, on the earnings call
Forward Guidance & Outlook
WM affirmed its full-year 2025 adjusted operating EBITDA guidance of $7.475 to $7.625 billion and free cash flow guidance of $2.8 to $2.9 billion. Total Company revenue is now expected to be approximately $25.275 billion, at the low end of prior guidance, due to further declines in recycled commodity pricing and modestly lower WM Healthcare Solutions revenue expectations. Adjusted operating EBITDA margin guidance was increased to 29.6%–30.2% from 29.6%–29.9%. For 2026, the company expects free cash flow to approach $3.8 billion, representing outsized year-over-year growth. The company's leverage ratio continues to improve and is on track to reach the targeted 2.5x to 3.0x range by mid-2026.
WM YoY Financials
WM Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.