Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 was $1,675 million, a 9.5% increase compared to the prior year pro forma for divestitures [12] - Adjusted EBITDA margin for Q2 was 30.7%, reflecting a 230 basis point increase year-over-year and 60 basis points ahead of guidance [14] - Adjusted free cash flow was approximately $137 million, exceeding expectations due to adjusted EBITDA outperformance [15] Business Line Data and Key Metrics Changes - Solid waste adjusted EBITDA margins reached 34.7%, the highest Q2 in the company's history [7] - Pricing increased by 5.8%, 30 basis points ahead of plan, with expectations for full-year pricing now between 5.5% and 5.75% [13] - Volume growth was positive across both U.S. and Canadian geographies, with U.S. volume growth accelerating by over 200 basis points sequentially [13][46] Market Data and Key Metrics Changes - Canadian volume growth was reported at 6.3% for Q2, with EPR-related activities contributing significantly [46] - U.S. volume growth turned positive despite industrial and construction-oriented slowdowns, indicating resilience in the business model [46] Company Strategy and Development Direction - The company is focused on densifying existing markets and has a robust M&A pipeline, with expectations to deploy $700 million to $900 million in M&A for the year [39] - The strategic growth investments in EPR are expected to yield significant returns, with ongoing operational efficiencies contributing to margin expansion [10][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate external headwinds and achieve record-setting performance [7] - The updated guidance reflects an increase in adjusted EBITDA target by $50 million, or 2.6%, despite economic uncertainties [11] Other Important Information - The company completed three small tuck-in acquisitions in the quarter and anticipates closing three more soon [10] - The impact of foreign exchange rates is significant, with a $30 million impact on annualized revenues for every 1 point move in FX [16] Q&A Session Summary Question: Potential options for the GIP business - Management is in the final stages of evaluating options for the GIP business, with two final bidders and a favorable outcome expected [27] Question: Update on margin improvements and self-help levers - Management highlighted pricing outperformance and improved labor turnover as key contributors to margin expansion, with expectations for continued improvement [32] Question: M&A pipeline visibility - The company is on track to achieve the high end of its M&A spending guidance, focusing on tuck-in acquisitions within existing markets [40] Question: Volume performance amidst economic weakness - Management noted that despite macroeconomic challenges, volume performance remains strong due to strategic market selection and investments [44] Question: Clarification on EPR contributions to volume - EPR is contributing significantly to volume growth, with management indicating that it was included in the original guidance [55] Question: Impact of bonus depreciation on free cash flow - Bonus depreciation is expected to provide a $25 million to $30 million tailwind, positively affecting free cash flow conversion [60] Question: Fleet conversion to CNG trucks - The company is progressing towards converting 50% of its fleet to CNG trucks over the next few years, particularly in large residential contracts [103]

Group 1 - The core viewpoint of the report is that the increase in profit margins has supported the rise in U.S. stock valuation multiples, with over half of the improvement in EBITDA margins for S&P 500 companies since the financial crisis attributed to increased labor productivity [1] - The report indicates that there is a significant correlation between actual GDP and non-farm labor productivity with changes in S&P 500 EBITDA margins, with productivity growth having a leading relationship that better explains the significant changes in profit margins since the 2008 financial crisis [1][2] - Factors such as technological innovation, transition to asset-light models, and the increasing share of service-oriented businesses have positively impacted profit margins and driven structural increases in U.S. labor productivity, differentiating it from other developed economies like Germany and France [1] Group 2 - A linear regression model established by the company shows that non-farm labor productivity explains approximately 55% of the improvement trend in S&P 500 EBITDA margins since the financial crisis [2] - The unexplained EBITDA margins are closely related to three factors: inflation, capacity and capital, and output levels, with inflation differentials being particularly significant [2] - The report suggests that while productivity growth may stabilize post-pandemic, it could help maintain profit margins at high levels, although there are concerns about potential negative impacts from weakened consumer spending or increased tariffs [2] Group 3 - The company remains optimistic about the long-term fundamentals of the S&P 500 index, believing that continued improvements in labor productivity will support profit margins [3] - Challenges anticipated in 2025 include direct impacts from tariffs and indirect effects from policy uncertainty on consumer and business confidence, which is reflected in the downward adjustment of the company's EPS forecast for the S&P 500 index [3]