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 and significant SG&A and operating cost reductions.

• Sustainability businesses expanded, commissioning 7 new RNG facilities and automating 5 recycling centers, driving 22% EBITDA growth in Recycling despite lower commodity prices.

• Achieved record operating expenses as a percentage of revenue for both Q4 and full year 2025, driving best-ever adjusted operating EBITDA margin above 30%.

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 basis points to 30.1% for 2025, overcoming a 140 basis point headwind from Healthcare Solutions acquisition and tax credit expiration.

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

• Net income for 2025 was $2.71B; adjusted net income was $3.03B. Diluted EPS was $6.70; adjusted diluted EPS was $7.50.

• Spent just under $2.6 billion on capital and $633 million on sustainability growth investments; paid $1.3 billion in dividends and reduced debt by $1 billion.

Outlook and guidance

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

• Operating EBITDA of $8.15–$8.25 billion expected, excluding $150 million accretion expense for comparability.

• Free cash flow guidance for 2026 is $3.75–$3.85B, nearly 30% growth at midpoint, with EBITDA to free cash flow conversion above 46%.

• Board approved a 14.5% increase in quarterly dividend to $3.78 per share and a new $3 billion share repurchase program for 2026.

• Plan to return ~$3.5 billion to shareholders in 2026, over 90% of expected free cash flow.