Waste Connections (WCN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue increased 11.2% year-over-year to $2.25 billion, driven by price-led organic growth, acquisitions, and higher commodity values.

• Net income for Q2 was $275.5 million ($1.07 per share), up 31.7% year-over-year, with adjusted EBITDA at $731.8 million (32.6% margin), up 16.4%.

• Operating income margin improved to 18.8% from 17.0% year-over-year, reflecting price-led growth and cost efficiencies.

• Over $650 million in annualized revenue from acquisitions signed or closed year-to-date, with record M&A activity and a robust pipeline.

• Employee retention improved for the seventh consecutive quarter, with voluntary turnover 35% below 2022 peaks and open positions down 45%.

Financial highlights

• Q2 revenue reached $2.248 billion, $23 million above guidance, with $123 million contributed by acquisitions.

• Q2 operating income was $424.7 million, up 23.4% year-over-year; net income for Q2 was $275.5 million.

• Adjusted Free Cash Flow YTD was $727.4 million, up 15% year-over-year, representing 16.8% of revenue.

• Net interest expense was $78.4 million, with a weighted average cost of debt at 4% and $1.26 billion in liquidity.

• Cash dividends per share increased to $0.285 in Q2 2024 from $0.255 in Q2 2023.

Outlook and guidance

• Full-year 2024 revenue outlook raised to $8.85 billion and Adjusted EBITDA to $2.9 billion (32.8% margin), up $100 million and $40 million, respectively, from initial guidance.

• Net income expected to be about $1.087 billion; adjusted free cash flow guidance at $1.2 billion on $1.15 billion CapEx.

• Q3 revenue expected between $2.275-$2.3 billion, with Adjusted EBITDA margin of 33.7%, up 120 basis points year-over-year.

• Guidance assumes no material change in economic conditions and excludes future acquisitions.