Waste Management (WM) Q1 2025 earnings summary

Executive summary

• Revenue grew 16.7% year-over-year to $6.02 billion, driven by disciplined pricing, cost optimization, and the addition of WM Healthcare Solutions (Stericycle acquisition), with strong operational performance and margin expansion across core and sustainability businesses.

• Adjusted operating EBITDA increased 12.2% year-over-year to $1.72 billion, with margin at 28.5%.

• Integration of Stericycle (WM Healthcare Solutions) progressed well, with early synergy capture, customer enthusiasm, and a focus on service continuity and process optimization.

• Net income attributable to shareholders was $637 million ($1.58 per diluted share), down from $708 million ($1.75 per share) last year, mainly due to higher interest expense from acquisition-related debt.

• Resilient business model and technology investments support confidence in achieving full-year guidance.

Financial highlights

• Total company operating EBITDA grew over 12% year-over-year, driven by collection, disposal, healthcare, and sustainability segments.

• Free cash flow was $475 million, in line with expectations, despite higher capital spending and cash interest from the Stericycle acquisition.

• Operating cash flow was $1.21 billion; capital expenditures totaled $831 million, supporting both base and sustainability growth.

• Operating expenses as a percentage of revenue for the legacy business improved by 50 basis points to 60.4%.

• Cash and cash equivalents at quarter-end were $216 million; total debt stood at $23.8 billion.

Outlook and guidance

• Management reaffirmed confidence in achieving the 2025 outlook, citing strong Q1 results and business resiliency.

• Free cash flow outlook reaffirmed at $2.675–$2.78 billion for 2025 after sustainability investments.

• WM Healthcare Solutions is on track to achieve targeted synergies of $80–$100 million in 2025 and $250 million annual run-rate by 2027.

• Share repurchases are temporarily suspended until leverage returns to targeted levels, expected in about 18 months post-acquisition.

• Margin expansion expected to accelerate in Q2 and Q3, especially in healthcare as synergies ramp.