Waste Management (WM) Q4 2025 earnings summary

Executive summary

• Delivered record 2025 results with best-ever operating leverage and margin expansion, driven by disciplined pricing, cost efficiencies, and strategic investments in sustainability, technology, automation, and Healthcare Solutions.

• Achieved double-digit growth in cash flow from operations and nearly 27% growth in free cash flow year-over-year.

• Integration of Healthcare Solutions progressed, with improved customer service metrics, significant SG&A reductions, and margin improvement to 16.9% in 2025.

• Sustainability businesses expanded with 7 new RNG facilities and automation upgrades at 5 Recycling sites, driving 22% EBITDA growth in Recycling despite lower commodity prices.

• Strategic investments in recycling, renewable energy, and healthcare solutions contributed to margin expansion and growth.

Financial highlights

• Revenue for 2025 was $25.2B, up 14.2% year-over-year; Q4 revenue was $6.3B, up 7.1%.

• Operating EBITDA margin expanded 40 bps to 30.1% for 2025, overcoming a 140 bps headwind from Healthcare Solutions acquisition and expiring tax credits.

• Cash flow from operations grew over 12% to $6.04B; free cash flow rose nearly 27% to $2.94B.

• Net income for 2025 was $2.71B; adjusted net income was $3.03B.

• Spent just under $2.6B on capital and $633M on sustainability growth investments in 2025.

Outlook and guidance

• 2026 revenue projected at $26.4–$26.6B, up 5.2% at midpoint.

• Operating EBITDA expected at $8.15B–$8.25B (30.8–31.0% margin), up 6.2% (7.4% normalized for wildfire cleanup volumes).

• Free cash flow guidance for 2026 is $3.75–$3.85B, nearly 30% growth at midpoint; dividend to increase 14.5% to $3.78 per share and new $3B share repurchase program authorized.

• Capital expenditures for 2026 projected at $2.65B–$2.75B, including $200M for sustainability projects.

• Anticipates effective tax rate of ~24% and year-end share count of ~402M.