Waste Management (WM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue increased 5.5% year-over-year to $5.4 billion, driven by strong core pricing, higher recycled commodity values, and improved operational efficiency.

• Adjusted operating EBITDA grew 10.3% to $1.62 billion, with margin expanding 130 basis points to a record 30.0% due to technology-driven efficiencies and effective pricing.

• Net income attributable to WM was $680 million ($1.69 per diluted share), up from $615 million ($1.51) in Q2 2023.

• Over $750 million in solid waste acquisitions closed through July, including Winters Bros. Waste Systems, with further expansion planned and the $7.2 billion Stericycle acquisition expected to close as early as Q4 2024.

• Sustainability investments advanced, with two upgraded recycling facilities opened and five renewable energy projects scheduled for completion in 2024.

Financial highlights

• Q2 2024 operating revenues: $5.4 billion, up from $5.1 billion in Q2 2023.

• Adjusted operating EBITDA margin reached 30.0%, up from 28.7% in Q2 2023, the highest in company history.

• Operating expenses as a percentage of revenue improved by 130 basis points to 60.9% year-over-year.

• Free cash flow for the first half of 2024 totaled $1.24 billion, up 32.3% year-over-year; full-year guidance is $2.0–$2.15 billion.

• Cash flow from operations for the first six months reached $2.52 billion, up 22% year-over-year.

Outlook and guidance

• Full-year 2024 adjusted operating EBITDA expected between $6.375 and $6.525 billion, with nearly 10% growth projected.

• Free cash flow guidance for 2024 reaffirmed at $2.0–$2.15 billion, including sustainability investments.

• Q3 Operating EBITDA margin expected in the range of 30.5% to 31%, factoring in headwinds from risk management, commodity prices, and integration of acquisitions.

• Guidance includes impact of $750 million in closed acquisitions but excludes Stericycle; management remains bullish on 2025, expecting a significant step-up from sustainability investments and Stericycle integration.

• Sustainability investments expected to reach or slightly exceed the high end of prior guidance ($850–$900 million).