Waste Management (WM) investor relations material

Executive summary

• Revenue for Q1 2026 increased 3.5% year-over-year to $6.23 billion, driven by strong pricing, growth in renewable energy and recycling volumes, and recent acquisitions, partially offset by lower collection volumes and reduced recycled commodity prices.

• Operating EBITDA grew nearly 6% year-over-year, with margin expanding up to 110 basis points, supported by collection, disposal, and sustainability businesses.

• Net income attributable to shareholders rose to $723 million ($1.79 per diluted share), up from $637 million ($1.58 per diluted share) in Q1 2025, reflecting higher operating income and a gain from a business divestiture.

• Free cash flow nearly doubled to $920 million, enabling $729 million in shareholder returns via dividends and buybacks.

• Strategic priorities advanced: core business growth, sustainability investments, healthcare solutions integration, and disciplined capital allocation.

Financial highlights

• Operating income increased to $1,113 million (17.9% of revenues), with operating EBITDA margin improving to 29.8%.

• Collection and Disposal operating EBITDA grew by $154 million, with margin up 190 basis points.

• Operating cash flow reached $1.5 billion, up nearly $300 million from Q1 2025.

• Capital expenditures were $650 million, down 22% year-over-year, with $61 million for sustainability growth.

• Effective tax rate was 18–18.9%, benefiting from renewable natural gas production tax credits.

Outlook and guidance

• Full-year 2026 financial outlook reaffirmed, with projected free cash flow between $3.75 and $3.85 billion and margin/EBITDA improvements expected to accelerate in H2.

• Anticipate volume recovery as weather impacts subside and special waste volumes normalize post-wildfire comp.

• Sustainability businesses expected to contribute $240–$250 million to EBITDA in 2026.

• Free cash flow conversion targeted at 46% for the year, with a path to 50% longer term.

• Continued investment in automation and technology is expected to drive efficiency and customer experience.