Core Insights - Waste Management reported better-than-expected Q2 2025 results with adjusted EPS of $1.92, exceeding the $1.89 estimate, and GAAP revenue of $6.43 billion, surpassing the $6.36 billion consensus, indicating strong operational performance and integration of acquired businesses [1][2] Financial Performance - Adjusted EPS (Non-GAAP) increased by 5.5% year-over-year from $1.82 to $1.92 [2] - GAAP revenue rose 19.0% year-over-year from $5.40 billion to $6.43 billion [2] - Adjusted Operating EBITDA reached $1.92 billion, an 18.8% increase from $1.62 billion in Q2 2024 [2] - Free Cash Flow (Non-GAAP) significantly increased by 54.3% year-over-year to $818 million [2] Business Overview - Waste Management operates in waste collection, processing, recycling, and disposal across North America, serving various sectors including municipalities and healthcare [3] - The company has focused on sustainability projects and has expanded through mergers and acquisitions, particularly in the healthcare sector [4] Operational Highlights - The core collection and disposal business generated $5.78 billion in revenue, up 7.1%, with an adjusted EBITDA margin of 31.3% [5] - Renewable energy projects contributed to double-digit operating EBITDA gains despite a decline in average prices for renewable credits and recycled commodities [6] - The Healthcare Solutions segment generated $646 million in revenue, with ongoing integration efforts improving margins [7] Strategic Initiatives - The company is investing in automation and technology, leading to workforce reductions but aiming for improved efficiency and safety [11] - Waste Management is on track to achieve targeted synergies of $80 to $100 million for fiscal 2025, with a long-term goal of $300 million in run-rate EBITDA synergies by 2027 [7] Outlook - Management reaffirmed full-year targets, with adjusted operating EBITDA guidance at $7.55 billion and free cash flow guidance raised to $2.8–2.9 billion for fiscal 2025 [12] - Revenue outlook for 2025 was adjusted to $25.28–$25.48 billion due to lower recycling commodity prices [12] - Investors should monitor the development of the healthcare segment and the impact of commodity prices on earnings [13]

Core Insights - Waste Management (WM) reported quarterly earnings of $1.92 per share, exceeding the Zacks Consensus Estimate of $1.89 per share, and up from $1.82 per share a year ago, representing an earnings surprise of +1.59% [1] - The company generated revenues of $6.43 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.39%, and up from $5.4 billion year-over-year [2] - Waste Management shares have increased approximately 13.8% year-to-date, outperforming the S&P 500's gain of 8.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.07 on revenues of $6.58 billion, and for the current fiscal year, it is $7.57 on revenues of $25.53 billion [7] - The estimate revisions trend for Waste Management was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Waste Removal Services industry, to which Waste Management belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another competitor in the industry, Republic Services (RSG), is expected to report quarterly earnings of $1.75 per share, reflecting a year-over-year increase of +8.7%, with revenues projected at $4.27 billion, up 5.4% from the previous year [9][10]

[WM Second Quarter 2025 Earnings Release](index=1&type=section&id=WM%20Second%20Quarter%202025%20Earnings%20Release) [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) WM reported strong Q2 2025 results with significant growth in revenue and operating cash flow, driven by core business performance and strategic acquisitions Q2 2025 Key Financial Metrics (As Adjusted) | Metric | Q2 2025 (As Adjusted) | Q2 2024 (As Adjusted) | Change | | :--- | :--- | :--- | :--- | | Revenue | $6,430 million | $5,402 million | +19.0% | | Operating EBITDA | $1,923 million | $1,618 million | +18.8% | | Operating EBITDA Margin | 29.9% | 30.0% | -10 bps | | Net Income | $777 million | $732 million | +6.1% | | Diluted EPS | $1.92 | $1.82 | +5.5% | - CEO Jim Fish highlighted **robust organic revenue growth and margin expansion** in the Collection and Disposal business, which achieved its best-ever operating expense margin[2](index=2&type=chunk) - Both the Recycling Processing and Sales and WM Renewable Energy segments experienced **double-digit operating EBITDA growth**, driven by investments in sustainability businesses[2](index=2&type=chunk) - The company released its 2025 Sustainability Report, noting a **22% reduction in greenhouse gas emissions** since 2021[2](index=2&type=chunk) [Business Segment Performance](index=2&type=section&id=Business%20Segment%20Performance) The WM Legacy Business showed strong performance with adjusted operating EBITDA growth, while the newly integrated WM Healthcare Solutions is on track to meet synergy targets Q2 2025 Adjusted Operating EBITDA by Segment ($ in millions) | Segment | Q2 2025 Adjusted Operating EBITDA | Margin | | :--- | :--- | :--- | | WM Legacy Business | $1,813 | 31.3% | | WM Healthcare Solutions | $110 | 17.0% | | **Total Company** | **$1,923** | **29.9%** | Q2 2025 Revenue by Segment ($ in millions) | Segment | Q2 2025 Revenue | Growth | | :--- | :--- | :--- | | WM Legacy Business | $5,784 | 7.1% | | WM Healthcare Solutions | $646 | N/A | | **Total Company** | **$6,430** | **19.0%** | - The WM Legacy Business's Collection and Disposal segment achieved an **adjusted margin of 37.9%**, driven by organic growth, cost discipline, and optimized business mix[3](index=3&type=chunk) - WM Healthcare Solutions is on track to achieve the upper end of its targeted synergies of **$80 to $100 million in 2025**[4](index=4&type=chunk) [Cash Flow and Investments](index=3&type=section&id=Cash%20Flow%20and%20Investments) The company generated $2.75 billion in operating cash flow and $1.29 billion in free cash flow in H1 2025, despite increased capital spending on strategic projects Cash Flow Summary - First Half 2025 ($ in millions) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,753 | $2,521 | | Capital expenditures | ($1,563) | ($1,335) | | Free cash flow | $1,293 | $1,244 | - Strong operating EBITDA growth drove the increase in operating cash flow, which was partially offset by **higher cash interest** related to the Stericycle acquisition funding[11](index=11&type=chunk) - During the quarter, **three growth projects commenced operations**: a new renewable natural gas facility in Illinois, a recycling automation project in Pennsylvania, and a new market recycling facility in Oregon[11](index=11&type=chunk) [Sustainability and WM Healthcare Solutions Update](index=3&type=section&id=Sustainability%20and%20WM%20Healthcare%20Solutions%20Update) The company is advancing its sustainability initiatives and the integration of WM Healthcare Solutions is progressing well, with significant synergies expected by 2027 - The company has completed **8 of 20 planned renewable natural gas (RNG) facilities** and **29 of 39 planned recycling automation and new market projects**[11](index=11&type=chunk) - Integration of WM Healthcare Solutions has identified **$50 million in operating EBITDA opportunities** from cross-selling, with $11 million already secured[11](index=11&type=chunk) - Anticipated run-rate synergies from the healthcare business, including cross-selling, are expected to total **$300 million of operating EBITDA by 2027**[11](index=11&type=chunk) [2025 Outlook](index=3&type=section&id=2025%20Outlook) WM affirmed its full-year EBITDA guidance and raised its free cash flow projection, while slightly lowering its revenue forecast due to commodity price declines Updated Full-Year 2025 Guidance | Metric | Updated 2025 Guidance | Prior Guidance/Note | | :--- | :--- | :--- | | Total Company Revenue | $25.275B - $25.475B | Decreased due to commodity prices | | Adjusted Operating EBITDA | $7.475B - $7.625B | Midpoint of $7.550B affirmed | | Adjusted Operating EBITDA Margin | 29.6% - 29.9% | Increased from 29.2% - 29.7% | | Free Cash Flow | $2.8B - $2.9B | Increased by $125M | - The free cash flow outlook was increased by **$125 million**, driven by recently enacted tax policy that restores bonus depreciation to 100%[11](index=11&type=chunk) - The revenue outlook was lowered primarily due to a recent decline in recycled commodity prices, which is expected to average **$80/ton for the year**, down from the previous expectation of $85/ton[11](index=11&type=chunk)[15](index=15&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's performance, showing H1 2025 operating revenues of $12.45 billion and net income of $1.36 billion [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, WM reported operating revenues of $6.43 billion and net income attributable to the company of $726 million, both up from the prior-year period Q2 2025 Statement of Operations Highlights ($ in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating revenues | $6,430 | $5,402 | | Income from operations | $1,151 | $1,009 | | Net income attributable to WM | $726 | $680 | | Diluted EPS | $1.80 | $1.69 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company's total assets stood at $45.72 billion and total equity increased to $9.20 billion from year-end 2024 Balance Sheet Highlights ($ in millions) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $4,984 | $4,774 | | Total assets | $45,722 | $44,567 | | Total current liabilities | $5,816 | $6,258 | | Long-term debt | $23,056 | $22,541 | | Total equity | $9,202 | $8,254 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash from operating activities increased to $2.75 billion from $2.52 billion in the prior-year period Six Months Ended June 30 Cash Flow Highlights ($ in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,753 | $2,521 | | Net cash used in investing activities | ($1,915) | ($2,359) | | Net cash used in financing activities | ($781) | ($464) | [Supplemental Data and Non-GAAP Reconciliations](index=11&type=section&id=Supplemental%20Data%20and%20Non-GAAP%20Reconciliations) This section provides detailed financial data breakdowns and reconciles non-GAAP measures to their most comparable GAAP counterparts for transparency Q2 2025 vs Q2 2024 Internal Revenue Growth | Driver | % of Related Business (Yield) | % of Related Business (Volume) | | :--- | :--- | :--- | | Commercial | 5.3% | (0.1)% | | Industrial | 3.8% | (1.2)% | | Residential | 5.7% | (5.7)% | | **Total Collection and Disposal** | **4.1%** | **1.6%** | Q2 2025 Reconciliation of GAAP Net Income to Adjusted Net Income ($ in millions) | Description | Amount | | :--- | :--- | | **As reported Net Income** | **$726** | | Stericycle acquisition and integration-related costs | $29 | | Loss from asset impairments, unusual items and other, net | $22 | | **As adjusted Net Income** | **$777** | - The report provides supplemental information to illustrate the impact of differing accounting treatments for recycling commodity rebates and landfill accretion expense to enhance comparability with peers[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)

Group 1 - Waste Management, Inc. is set to release its second-quarter earnings results on July 28, with expected earnings of $1.89 per share, an increase from $1.82 per share in the same period last year [1] - The company is projected to report quarterly revenue of $6.36 billion, up from $5.4 billion a year earlier [1] - John Morris has been appointed as President of Waste Management as of May 14 [1] Group 2 - Waste Management shares experienced a decline of 0.4%, closing at $229.67 [2] - Analysts have provided various ratings and price targets for Waste Management, with Raymond James maintaining an Outperform rating and raising the price target from $255 to $256 [4] - Oppenheimer also maintained an Outperform rating, increasing the price target from $255 to $260 [4] - Scotiabank raised its price target from $260 to $265 while maintaining a Sector Outperform rating [4] - RBC Capital reiterated a Sector Perform rating with a price target of $229 [4] - BMO Capital maintained a Market Perform rating and raised the price target from $241 to $245 [4]

Company Performance - Waste Management (WM) closed at $230.61, marking a +1.09% move from the prior day, outperforming the S&P 500 which gained 0.07% [1] - The stock has fallen by 0.2% in the past month, lagging behind the Business Services sector's gain of 1.45% and the S&P 500's gain of 5.71% [1] Upcoming Earnings - The upcoming earnings release is expected on July 28, 2025, with projected EPS of $1.89, indicating a 3.85% increase year-over-year [2] - Revenue is projected at $6.34 billion, reflecting a 17.4% increase compared to the same quarter of the previous year [2] Full-Year Estimates - Full-year Zacks Consensus Estimates predict earnings of $7.57 per share and revenue of $25.53 billion, representing year-over-year changes of +4.7% and +15.73%, respectively [3] - Recent analyst estimate revisions are seen as a positive sign for the business outlook [3] Zacks Rank and Valuation - Waste Management currently holds a Zacks Rank of 3 (Hold), with a recent 0.11% fall in the Zacks Consensus EPS estimate [5] - The company is trading at a Forward P/E ratio of 30.13, which is a premium compared to its industry's Forward P/E of 27.94 [6] - WM's PEG ratio is 2.83, compared to the industry average PEG ratio of 2.59 [6] Industry Context - The Waste Removal Services industry is part of the Business Services sector, holding a Zacks Industry Rank of 158, placing it in the bottom 37% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - Wall Street analysts anticipate Waste Management (WM) to report quarterly earnings of $1.89 per share, reflecting a year-over-year increase of 3.9%, with revenues expected to reach $6.34 billion, up 17.4% from the previous year [1] Earnings Estimates - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock performance [2] - The consensus EPS estimate for the quarter has been revised downward by 0.8% over the past 30 days, indicating a collective reassessment by analysts [1] Key Metrics Projections - Analysts project 'Operating revenues- WM Renewable Energy' at $99.63 million, a 44.4% increase from the year-ago quarter [4] - 'Operating revenues- Recycling' is expected to reach $439.11 million, indicating an 8.4% increase from the prior-year quarter [4] - The estimate for 'Operating revenues- Corporate and Other' is $5.69 million, reflecting a decrease of 5.3% from the year-ago quarter [4] Internal Revenue Growth - The average prediction for 'Internal Revenue Growth - Total - As a % of Total Company' is 18.0%, compared to 5.5% reported in the same quarter last year [5] - 'Internal Revenue Growth - Internal revenue growth - As a % of Total Company' is estimated at 6.1%, up from 5.3% in the previous year [5] Stock Performance - Waste Management shares have decreased by 3% over the past month, contrasting with a 5.9% increase in the Zacks S&P 500 composite [6] - WM holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [6]

Core Insights - WM is set to release its second-quarter 2025 results on July 28, with expectations of strong revenue growth and earnings performance [1][2]. Revenue Expectations - The Zacks Consensus Estimate for WM's revenues is $6.3 billion, reflecting a 17.4% increase from the same quarter last year [2]. - Revenue from the Collection segment is anticipated to be $4.7 billion, indicating a 13.7% year-over-year growth [3]. - Landfill revenues are estimated at $1.4 billion, suggesting a 9.5% increase compared to the previous year [3]. - The Transfer segment is projected to generate revenues of $692.5 million, representing a 12.1% rise year-over-year [3]. - The Recycling Processing and Sales segment is expected to bring in $535.8 million, marking a 12.8% increase from the prior year [4]. - WM Renewable Energy revenues are anticipated to reach $95.3 million, reflecting a significant 36.2% year-over-year growth [4]. - WM Healthcare Solutions is estimated to generate $278.2 million in revenues [4]. Earnings Performance - Adjusted EBITDA is projected at $1.9 billion, indicating a 16.3% growth from the same quarter last year [5]. - The consensus estimate for earnings per share (EPS) is $7.57, implying a 4.7% increase from the previous year [5]. - Strong margins and operational efficiency are expected to contribute positively to the bottom line [5]. Earnings Prediction - The model predicts an earnings beat for WM, supported by a positive Earnings ESP of +0.25% and a Zacks Rank of 3 (Hold) [6].

Company Performance - Waste Management (WM) ended the recent trading session at $229.30, showing a +1.46% change from the previous day's closing price, outperforming the S&P 500's daily gain of 0.14% [1] - The stock has decreased by 4.44% over the past month, underperforming the Business Services sector's loss of 4.21% and the S&P 500's gain of 3.97% [1] Upcoming Earnings - The company's earnings report is scheduled for July 28, 2025, with projected EPS of $1.89, indicating a 3.85% increase compared to the same quarter last year [2] - Quarterly revenue is expected to be $6.35 billion, reflecting a 17.52% increase from the year-ago period [2] Fiscal Year Estimates - For the entire fiscal year, earnings are estimated at $7.58 per share and revenue at $25.54 billion, representing changes of +4.84% and +15.78% respectively from the previous year [3] Analyst Estimates - Recent adjustments to analyst estimates for Waste Management indicate changing near-term business trends, with upward revisions suggesting analysts' positive outlook on the company's operations [4] - The Zacks Consensus EPS estimate has seen a 0.05% decrease over the last 30 days, and Waste Management currently holds a Zacks Rank of 3 (Hold) [6] Valuation Metrics - Waste Management is trading at a Forward P/E ratio of 29.83, which is a premium compared to the industry average Forward P/E of 28.07 [7] - The company has a PEG ratio of 2.99, higher than the Waste Removal Services industry's average PEG ratio of 2.6 [8] Industry Context - The Waste Removal Services industry is part of the Business Services sector and currently holds a Zacks Industry Rank of 180, placing it in the bottom 28% of over 250 industries [9]

Core Viewpoint - Waste Management is highlighted as a reliable investment opportunity with a strong market position and growth potential in the waste and recycling industry, despite the current hype surrounding AI and quantum computing stocks [1][2]. Company Overview - Waste Management is the largest waste and recycling company in North America, controlling nearly 20% of the U.S. and Canadian market [3]. - The company operates 262 landfills, 506 solid and medical waste transfer stations, and 105 recycling facilities [3]. Competitive Advantages - Waste Management benefits from significant barriers to entry, including public resistance to new landfills and regulatory protections, which create a wide moat around its operations [4][5]. - The company's brand recognition is superior to its competitors, providing a competitive edge in expanding national accounts and increasing e-commerce sales [6]. Growth Areas - **Sustainability Initiatives**: Waste Management is investing $1.4 billion to build or automate 39 recycling facilities by 2027 and $1.6 billion to construct 20 renewable natural gas (RNG) facilities [9][10]. Management anticipates a 15% sales growth from these initiatives through 2027, generating $600 million in annual free cash flow [11]. - **Healthcare Solutions**: The acquisition of Stericycle for $7.2 billion positions Waste Management to capitalize on the growing medical waste services market, expected to grow by 7% annually through 2028 [12][13]. Management has increased expected synergies from this acquisition from $125 million to $250 million [13]. Financial Performance - Waste Management has a return on invested capital (ROIC) of 14%, surpassing the peer average of 11%, and exceeds its cost of capital of 8% [14]. - The company currently offers a dividend yield of 1.4%, with a history of consistent increases, delivering total returns of 2,230% since 2000 [15][16]. The dividend payout ratio is 46% of net income, allowing room for future increases [16]. Valuation - Trading at 30 times forward earnings, Waste Management is considered to warrant a premium due to its resilient business model, wide moat, growth opportunities, and passive income potential [17].

Core Points - Arlington has transitioned to a new waste collection service provider, Waste Management, due to a strike by the previous provider, Republic Services [2][4] - The new contract is expected to save the town at least $10 million over its duration compared to the previous manual collection system [3] - The new waste collection system includes 65-gallon trash and recycling receptacles, which are designed for automatic pickup, improving efficiency and cleanliness [2][3] Summary by Sections Contract and Cost Efficiency - Arlington entered into a contract with Waste Management, which was deemed the most cost-efficient option for the town [2] - The expected savings from this contract are projected to be at least $10 million compared to the previous manual collection program [3] Implementation and Community Response - New 65-gallon trash and recycling receptacles were delivered to residents in June to facilitate the automatic pickup system [2] - Some residents have expressed dissatisfaction with the transition, describing it as a "trainwreck" due to issues related to the ongoing strike and delays in receiving new bins [4][6] Operational Guidelines - Residents are instructed to place their bins three feet away from the curb and from each other for effective pickup [3]