Company Overview - Waste Management, Inc. is the largest waste and environmental services company in North America, providing services such as trash pickup, landfills, recycling, and has recently expanded into renewable energy and medical waste [1]. Investment Focus - The analysis primarily focuses on small- to mid-cap companies, which are often overlooked by many investors, while also occasionally examining large-cap companies to provide a broader perspective on equity markets [1].

Financial Data and Key Metrics Changes - Total company operating EBITDA grew by more than 12% in Q1 2025 compared to Q1 2024, driven by solid operational performance in the collection and disposal business, contributions from WM Health Care Solutions, and increases in sustainability businesses [8][19] - Operating cash flow was $1,210 million in Q1 2025, a decrease from Q1 2024, but in line with expectations due to planned increases in cash interest payments and working capital headwinds [21][22] - First quarter free cash flow was $475 million, on track to achieve full year free cash flow outlook of between $2,675 million and $2,775 million [23] Business Line Data and Key Metrics Changes - Operating EBITDA for the collection and disposal business was up almost 5%, with margin expanding by 10 basis points [14] - Combined operating EBITDA from recycling and renewable energy grew by over 20% year over year [10] - Operating EBITDA margin in the residential line of business grew more than 130 basis points, achieving 20% for the first time in six years [18] Market Data and Key Metrics Changes - Revenue growth across all lines of business was driven by collection and disposal yield of 4% and core price of 6.5%, with churn remaining stable at around 9% [15] - Special waste volumes were positively impacted by California wildfire cleanup, although gains were offset by winter weather events [16] Company Strategy and Development Direction - The company focuses on growing customer lifetime value while leveraging technology to optimize cost structure and delivering on strategic investments in sustainability [9] - The leadership position in sustainability investments is positioning the WM brand to be synonymous with sustainability, which is not easily matched by competitors [9] - The company continues to identify opportunities to scale the core business through acquisitions, with a robust pipeline of tuck-in opportunities anticipated for solid waste M&A [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving all financial guidance outlined last quarter, citing strong operational execution and the resiliency of the business model [8] - The company remains optimistic about the volume outlook for 2025, supported by strong special waste pipelines and positive service intervals [16] - Management noted that the business is resilient to economic downturns, with volumes turning back up in March and April after challenging weather in January and February [84][86] Other Important Information - The company is on track to achieve $250 million of annual run rate synergies in 2027 from the integration of WM HealthCare Solutions [12] - Capital expenditures totaled $831 million in Q1 2025, with investments in sustainability growth in line with expectations [22] Q&A Session Summary Question: Outlook for Q2 and margin improvement for solid waste - Management indicated no unusual seasonality impacts except for California wildfires, expecting another step change in margin on a year-over-year basis [28][29] Question: Yield in solid waste business compared to expectations - Yield conversion dropped 400 basis points in the quarter, but core price performance was strong, translating to margin expansion [30][31] Question: Performance of healthcare solutions business and revenue quality - Revenue in the regulated medical waste business was slightly up, while the Secure Information Destruction side saw a dip due to event work weakness [38] Question: Synergy capture in Q1 - The company achieved $16 million in synergy value capture in Q1, with confidence in reaching the midpoint of the synergy guidance range [46][47] Question: M&A opportunities and market conditions - The company expects to close on more than $500 million of solid waste acquisitions in 2025, with a strong pipeline of transactions [58][62] Question: Resilience of the company in downturns - Management emphasized the diversification provided by sustainability and healthcare investments, noting the company's resilience to economic downturns [83][86]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-12154 Waste Management, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employ ...

Core Viewpoint - Waste Management, Inc. reported mixed first-quarter 2025 results, with earnings exceeding estimates but revenues falling short [1] Financial Performance - Adjusted earnings per share were $1.67, surpassing the consensus estimate by 1.2% but declining 4.6% year over year [1] - Total revenues reached $6 billion, missing the consensus mark by 1.3% but growing 16.7% from the previous year [1] Segment Performance - Collection segment revenues were $4.3 billion, up 4.7% year over year but below the estimate of $4.7 billion [3] - Landfill segment revenues increased 3.6% to $1.2 billion, missing the projection of $1.4 billion [3] - Transfer segment revenues rose 5.7% to $592 million, falling short of the estimate of $681.4 million [3] - Recycling Processing and Sales segment revenues grew 6.7% to $465 million, missing the estimate of $526.3 million [3] - Renewable Energy segment revenues were $92 million, up 31.4% year over year and exceeding the estimate of $89 million [4] - Healthcare Solutions Corporate and Other segment recorded revenues of $627 million, significantly surpassing the estimate of $121 million [4] Operating Metrics - Adjusted operating EBITDA was $1.7 billion, missing the estimate of $1.8 billion but increasing 12.2% from the year-ago quarter [5] - Adjusted operating EBITDA margin decreased by 110 basis points to 28.5%, below the estimate of 30.1% [5] Cash Flow and Dividends - Cash generated from operating activities was $1.2 billion, with capital expenditures of $831 million [6] - Free cash flow amounted to $475 million, and $336 million in cash dividends were distributed to shareholders [6] Stock Performance - The stock has gained 7.4% over the past six months, outperforming the industry growth of 3.6% and the S&P 500 decline of 4.1% [2]

Financial Data and Key Metrics Changes - Total company operating EBITDA grew by more than 12% in Q1 2025 compared to Q1 2024, driven by solid operational performance in collection and disposal, contributions from WM Health Care Solutions, and sustainability businesses [11][12] - WM's legacy business achieved a 30% margin for the fourth consecutive quarter, an increase of 40 basis points year-over-year [22] - Operating cash flow was $1,210 million in Q1, a decrease from the previous year but in line with expectations due to planned increases in cash interest payments [25] Business Line Data and Key Metrics Changes - Operating EBITDA for the collection and disposal business was up almost 5%, with margin expanding by 10 basis points [17] - Combined operating EBITDA from recycling and renewable energy grew by over 20% year-over-year [12] - The residential line of business achieved an operating EBITDA margin of 20% for the first time in six years, growing more than 130 basis points [21] Market Data and Key Metrics Changes - Revenue growth was driven by collection and disposal yield of 4% and core price of 6.5%, with churn remaining stable at around 9% [18] - Special waste volumes were positively impacted by California wildfire cleanup, although overall collection and disposal results were flat on a workday adjusted basis [19] Company Strategy and Development Direction - The company is focused on growing customer lifetime value, leveraging technology to optimize cost structures, and delivering on strategic investments in sustainability [11] - There is a robust pipeline of tuck-in acquisition opportunities, with expectations of closing more than $500 million in solid waste acquisitions in 2025 [27][63] - The integration of WM HealthCare Solutions is progressing well, with a target of achieving $250 million in annual run rate synergies by 2027 [14][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial guidance for the year, citing strong operational execution and the resiliency of the business model [11] - The company remains optimistic about volume outlook for 2025, expecting continued strength in special waste pipelines and service intervals [19] - Management noted that the business is recession-resistant, with recent volume increases indicating that earlier declines were primarily due to adverse weather conditions [86][88] Other Important Information - Capital expenditures totaled $831 million in Q1, with investments in sustainability growth in line with expectations [26] - The leverage ratio at the end of the quarter was 3.58 times, with expectations to reduce it to approximately 3.15 times by the end of 2025 [28] Q&A Session Summary Question: Outlook for Q2 and margin improvement - Management indicated optimism for Q2 margins, expecting a normal seasonal uptick and continued momentum in synergy capture from the healthcare business [31][33] Question: Yield in solid waste business - Management noted a drop in yield conversion but emphasized strong core price performance and margin expansion [34][35] Question: Healthcare Solutions revenue trends - The regulated medical waste business is slightly up, while the secure information destruction side saw a dip due to event work weakness [42][44] Question: Synergy capture from Stericycle - Approximately $16 million in synergy value was captured in Q1, with confidence in achieving the midpoint of the synergy guidance for the year [50][51] Question: M&A opportunities - The company expects to close $500 million in solid waste acquisitions, with a strong pipeline and increased willingness from smaller companies to sell [62][63] Question: Resilience in downturns - Management expressed confidence in the company's resilience to economic downturns, supported by diversification in sustainability and healthcare investments [85][88]

Core Insights - Waste Management (WM) reported $6.02 billion in revenue for Q1 2025, a year-over-year increase of 16.7% [1] - The EPS for the same period was $1.67, down from $1.75 a year ago, with a surprise of +1.21% over the consensus estimate [1] - The reported revenue was a slight miss, with a surprise of -1.33% compared to the Zacks Consensus Estimate of $6.1 billion [1] Financial Performance Metrics - Internal Revenue Growth for the total company was 16.7%, slightly above the average estimate of 16.1% from six analysts [4] - Internal revenue growth as a percentage of total company was 3.5%, below the four-analyst average estimate of 4.9% [4] - Volume growth as a percentage of total company was 0.1%, compared to the three-analyst average estimate of 0.8% [4] Segment Performance - Operating revenues from Recycling were reported at $384 million, below the estimated $442.21 million, representing a year-over-year increase of 4.4% [4] - Operating revenues from WM Renewable Energy were $91 million, slightly below the estimated $94.08 million [4] Stock Performance - Shares of Waste Management returned +0.2% over the past month, outperforming the Zacks S&P 500 composite, which declined by -4.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

This quarterly report represents an earnings surprise of 1.21%. A quarter ago, it was expected that this garbage and recycling hauler would post earnings of $1.79 per share when it actually produced earnings of $1.70, delivering a surprise of -5.03%. Waste Management (WM) came out with quarterly earnings of $1.67 per share, beating the Zacks Consensus Estimate of $1.65 per share. This compares to earnings of $1.75 per share a year ago. These figures are adjusted for non-recurring items. Empirical research s ...

Revenue Performance - Total revenue for Q1 2025 was $6,018 million, representing a 16.7% increase compared to $5,159 million in Q1 2024[2] - Operating revenues for Q1 2025 were $6,018 million, a 16.6% increase from $5,159 million in Q1 2024[21] - Total collection and disposal revenues for Q1 2025 were $6,038 million, up from $5,774 million in Q1 2024, marking a 4.6% increase[27] - Internal revenue growth for the company was 16.7% for the three months ended March 31, 2025, compared to the same period in 2024[29] Profitability Metrics - Adjusted operating EBITDA for Q1 2025 was $1,669 million, up 12.2% from $1,530 million in Q1 2024, with an operating EBITDA margin of 27.7%[2][3] - The company achieved a net income of $637 million, with diluted EPS of $1.58, compared to $708 million and $1.75 in the prior year[2] - Consolidated net income for Q1 2025 was $637 million, down from $707 million in Q1 2024, representing a decrease of 9.9%[21] - Basic earnings per share for Q1 2025 were $1.58, compared to $1.76 in Q1 2024, reflecting a decline of 10.2%[21] Operating Expenses - Operating expenses for the total company were $3,647 million, maintaining a margin of 60.6%[5] - SG&A expenses totaled $687 million, with a margin of 11.4%, reflecting continued cost discipline[6] - Adjusted operating expenses for the same period were $3,640 million, compared to $3,140 million in 2024, reflecting an increase of 15.9%[47] - The adjusted SG&A expenses were reported at $663 million, up from $491 million in the prior year, indicating a rise of 35%[47] Cash Flow and Investments - The company generated $1.21 billion in net cash from operating activities, with free cash flow of $475 million[12] - Free cash flow for the three months ended March 31, 2025, was $475 million, down 33.5% from $714 million in the same period of 2024[33] - Net cash provided by operating activities decreased to $1,208 million in Q1 2025 from $1,367 million in Q1 2024, representing a decline of 11.6%[33] - The free cash flow for 2025 is projected to be between $2,675 million and $2,775 million, with net cash provided by operating activities at $5,750 million[47] Capital Expenditures and Debt - Capital expenditures for Q1 2025 were $831 million, an increase from $668 million in Q1 2024[25] - The company’s long-term debt increased to $22,883 million as of March 31, 2025, compared to $22,541 million at the end of 2024[23] - The company anticipates capital expenditures to support the business to be approximately $2,575 million in 2025[47] Sustainability and Growth Initiatives - Investments in sustainability growth projects amounted to $128 million, including two recycling automation projects completed during the quarter[12] - The company plans to invest $600 million in sustainability growth investments as part of its capital expenditures[47] - The company is on track to achieve targeted synergies of $80 to $100 million from the Stericycle acquisition in 2025[7] Tax and Other Expenses - The effective tax rate for Q1 2025 was 19.2%, slightly higher than 18.6% in Q1 2024[40] - Total landfill depletion expense increased to $218 million in Q1 2025, compared to $209 million in Q1 2024, driven by increased volumes at higher cost sites[34][35] - The Stericycle acquisition and integration-related costs were adjusted to $24 million, affecting the overall SG&A expenses[47]

Wall Street analysts forecast that Waste Management (WM) will report quarterly earnings of $1.65 per share in its upcoming release, pointing to a year-over-year decline of 5.7%. It is anticipated that revenues will amount to $6.11 billion, exhibiting an increase of 18.4% compared to the year-ago quarter.Over the last 30 days, there has been an upward revision of 0.6% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration ...

Core Insights - WM is set to release its first-quarter 2025 results on April 28, with a history of earnings surprises, having beaten the Zacks Consensus Estimate in two of the last four quarters, with an average beat of 3.9% [1] Revenue Expectations - The Zacks Consensus Estimate for total revenues is $6.1 billion, indicating an 18.4% increase from the same quarter last year [1] - Collection revenues are expected to reach $4.7 billion, reflecting a 15.3% year-over-year growth [2] - Landfill revenues are projected at $1.4 billion, suggesting a 19.4% increase compared to the previous year [2] - The Transfer segment is estimated to generate $681.4 million, indicating a 21.7% rise year-over-year [2] - Recycling Processing and Sales revenues are anticipated to be $526.3 million, representing a 20.7% increase from the prior year [3] - WM Renewable Energy is expected to contribute $89 million, marking a 27.2% year-over-year growth [3] - WM Healthcare Solutions revenues are estimated at $107.6 million [3] EBITDA and Operational Efficiency - Adjusted EBITDA is projected to be $1.8 billion, suggesting a 21% growth from the same quarter last year [4] - Factors contributing to improved operational efficiency include cost optimization, shedding of low-margin residential business, and lower fuel costs in Collection and Disposal [4] Earnings Per Share (EPS) Expectations - The consensus estimate for earnings per share is $1.68, indicating a 5.1% decline from the year-ago quarter [5] - Strong margins driven by robust top-line growth and a disciplined cost strategy are expected to enhance the bottom line [5] Earnings Prediction Model - The model predicts an earnings beat for WM, supported by a positive Earnings ESP of +0.83% and a Zacks Rank of 3 (Hold) [6]