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 reaching a record 30% due to technology-driven efficiencies and pricing strategy.

• 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, with further expansion planned, including the pending $7.2 billion Stericycle acquisition.

• Significant investments in renewable natural gas and recycling automation, with two upgraded recycling facilities opened and five renewable energy projects scheduled for completion in 2024.

Financial highlights

• Q2 Operating EBITDA margin reached 30%, the highest in company history, expanding 130 basis points year-over-year.

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

• Free cash flow for the first half of 2024 grew 32.3% to $1.24 billion, with operating cash flow at $2.52 billion, up 21.6% year-over-year.

• Capital expenditures totaled $1.34 billion in the first half, with $388 million for sustainability growth investments.

• Guidance for 2024 free cash flow is $2.0–$2.15 billion, including sustainability investments.

Outlook and guidance

• Full-year 2024 adjusted operating EBITDA expected between $6.375 and $6.525 billion, with margin outlook of 30.5–31% for Q3.

• Free cash flow guidance reaffirmed; capital spending on sustainability may reach the high end of prior guidance.

• Stericycle acquisition expected to close as early as Q4 2024, expanding presence in healthcare waste and secure information destruction.

• Sustainability businesses expected to contribute $115 million in EBITDA for 2024, with greater impact in Q4.

• Management confident in meeting or exceeding the midpoint of the full-year outlook.