Waste Management (WM) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 results with 7.9% organic revenue growth to $5.61 billion, double-digit operating EBITDA growth, and margin reaching a record 30.5%, up 90 basis points year-over-year.

• Net income attributable to shareholders was $760 million, up from $663 million in Q3 2023.

• Cost optimization, disciplined pricing, and sustainability investments drove margin expansion and robust operational performance.

• Closed nearly $800 million in solid waste acquisitions YTD, with a strong pipeline and progress toward closing the $7.2 billion Stericycle acquisition in Q4 2024.

• Continued investments in automation, technology, and sustainability, with $781 million in Q3 capital expenditures and $301 million returned to shareholders via dividends.

Financial highlights

• Q3 2024 operating revenues were $5.61 billion, up from $5.20 billion in Q3 2023; operating EBITDA grew 11% to $1.71 billion, with margin at 30.5%.

• Net income for Q3 2024 was $760 million; diluted EPS increased to $1.88 (GAAP) and $1.96 (adjusted).

• Free cash flow for the first nine months rose 20% year-over-year to $1.86 billion, with full-year guidance at the high end of $2.15 billion.

• Operating expenses as a percentage of revenue improved by 70 basis points to 60.6%.

• Cash from operations for the first nine months was $3.88 billion, up 16.2% year-over-year.

Outlook and guidance

• On pace to achieve the high end of 2024 guidance for revenue (~$6.5 billion EBITDA, ~10% growth), free cash flow, and operating EBITDA.

• 2025 expected to see significant step change in revenue, earnings, and free cash flow from sustainability and Stericycle integration.

• Targeting 50-100 basis points of margin expansion in collection and disposal for 2025, with a 30 basis point headwind from expiring tax credits.

• Sustainability businesses expected to add another 30 basis points of margin expansion in 2025.

• Full-year 2024 revenue growth expected to be about 6%, above prior guidance.