Waste Management (WM) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $6.68 billion, up 4.0% year-over-year, driven by higher yield in Collection and Disposal, increased energy surcharges, and volume growth in Recycling and Renewable Energy, partially offset by lower Healthcare Solutions volumes and reduced commodity prices.

• Adjusted operating EBITDA grew 5.5% to $2.07 billion, with margin expanding by 40 basis points to 30.9%, overcoming headwinds from wildfires and energy surcharges.

• Net income attributable to shareholders was $785 million ($1.95 per diluted share), up from $726 million ($1.80 per diluted share) in Q2 2025, reflecting improved operating income and partially offset by higher income tax expense.

• Free cash flow for Q2 2026 was $1.10 billion, a 35% increase year-over-year, driven by higher earnings, lower capital spending, and working capital benefits.

• Over $1 billion was returned to shareholders in Q2 2026 through share repurchases and dividends.

Financial highlights

• Operating income for Q2 2026 was $1,253 million (18.7% of revenues), up from $1,151 million (17.9%) in Q2 2025.

• Operating expenses were 59.2% of revenue, stable year-over-year despite higher fuel costs.

• SG&A expenses improved to 10.2% of revenue (9.9% adjusted), a 60 basis point improvement, returning below 10% for the first time since the Healthcare Solutions acquisition.

• Net cash provided by operating activities for the first half of 2026 was $3.23 billion, up 17% year-over-year.

• Capital expenditures for the first half of 2026 were $1,280 million, down from $1,563 million in 2025, reflecting normalized vehicle spending and lower sustainability capital.

Outlook and guidance

• Full-year 2026 revenue outlook narrowed to $26.275–$26.475 billion due to softer volume trends and timing of RNG plant connections, but profitability and cash flow guidance remain unchanged.

• Adjusted operating EBITDA for 2026 expected between $8.15 and $8.25 billion, with margin projected at 31.0%–31.2%, up 20 basis points.

• Free cash flow guidance is $3.75 to $3.85 billion.

• Collection and Disposal yield tracking toward the high end of guidance; volumes expected to be flat in the second half, with a full-year decline of about 1% (or 50 basis points excluding wildfire impacts).

• SG&A as a percent of revenue expected around 10% for the year, with Healthcare Solutions SG&A improving to 15–16% of revenue.