Waste Connections (WCN) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 7.5% to $2.228 billion, driven by price-led organic growth and robust acquisition activity, with adjusted EBITDA up 9.5% to $712.2 million and a 32% margin, exceeding expectations despite weather-related volume weakness.

• Net income increased 5% to $241.5 million, with adjusted net income per diluted share at $1.13, up from $1.04 year-over-year.

• Employee retention improved for the tenth consecutive quarter, with voluntary turnover below 12% and record-low safety incident rates.

• Year-to-date acquired annualized revenue exceeded $125 million, including a major recycling facility in New Jersey.

• Cash flow from operations increased to $541.5 million, supporting ongoing capital investments and dividends.

Financial highlights

• Q1 revenue was $2.228 billion, up 7.5% year-over-year, with $112 million from acquisitions net of divestitures.

• Adjusted EBITDA reached $712.2 million, up 9.5% year-over-year, with a 32% margin (up 60 bps year-over-year).

• Adjusted free cash flow was $332.1 million, in line with expectations and up from $324.8 million year-over-year.

• Operating income rose 6.4% to $390.2 million, though margin declined slightly to 17.5%.

• Cash dividends paid increased to $81.5 million, reflecting a higher quarterly rate of $0.315 per share.

Outlook and guidance

• Q2 revenue expected between $2.375–$2.4 billion; adjusted EBITDA margin estimated at 32.7%.

• 2025 capital expenditures are expected to total $1.2–$1.225 billion, including $100–$150 million for renewable natural gas facilities.

• Management expects continued price-led revenue growth, margin expansion, and above-average acquisition activity, with updates to be provided at Q2 earnings.

• Depreciation and amortization projected at 13.1% of revenue; interest expense at $82 million; effective tax rate at 24.5%.

• The Board approved a regular quarterly dividend of $0.315 per share, payable in May 2025.