WM Announces Third Quarter 2025 Earnings

WM Delivers Double-Digit Growth in Cash Flow from Operations Led by Disciplined Growth, Strong Cost Optimization, and Expansion of its Sustainability Businesses

WM Advances its Sustainability Investments with Completion of Two New Renewable Natural Gas Facilities and Two Recycling Projects

HOUSTON–(BUSINESS WIRE)–WM (NYSE: WM) today announced financial results for the quarter ended September 30, 2025.

“Our third quarter results highlight momentum in WM’s earnings growth and free cash flow conversion, which is driven by our strong operating platform, diverse and growing customer base, and expanding sustainability businesses,” said Jim Fish, WM’s CEO. “Our Collection and Disposal business delivered record-setting margin this quarter, underscoring the strength of our industry-leading asset network, strategic investments in technology, and disciplined pricing programs. We also achieved adjusted operating EBITDA growth in both our Recycling Processing and Sales and Renewable Energy segments despite commodity price headwinds, underscoring the value of our sustainability investments. Additionally, we continued to advance the integration of WM Healthcare Solutions, enhancing the breadth and value of services we offer to our customers. Strong results across all aspects of our business reinforce our confidence in achieving our full-year earnings and free cash flow guidance, as well as our long-term financial objectives and strategic priorities.”^(a)

KEY HIGHLIGHTS FOR THE THIRD QUARTER OF 2025^(d)

• Adjusted operating EBITDA for the WM Legacy Business grew 8.7%.^(a) The Company’s Collection and Disposal business led the way with an operating EBITDA margin of 37.5%, or 38.4% on an adjusted basis, driven by continuous improvements in technology, strategic asset network utilization, and focus on disciplined price-cost spread.^(a)

• Revenue growth in the WM Legacy Business was driven by Collection and Disposal core price of 6.0% and yield of 3.8% as the Company continues to focus on maximizing customer lifetime value.^(g)
• Volumes in the Collection and Disposal business grew 0.2% as compared to the third quarter of 2024, driven by strong landfill volumes and growth in industrial collection volumes. This growth was partially offset by a decline in residential collection volumes due to the strategic exit of lower-margin contracts.
• A revenue decline of $60 million in the Recycling Processing and Sales segment was driven by lower market prices for recycled commodities. The Company’s blended average price for single stream commodities declined nearly 35% from the prior year quarter.^(h)
• WM Healthcare Solutions revenue was slightly below expectations. The Company is taking a disciplined approach to customer engagement and prioritizing customer lifetime value, resulting in the deferral of some planned price increases.

• Adjusted operating expenses as a percentage of revenue for the WM Legacy Business improved 160 basis points, reflecting the benefits of improved driver retention and the Company’s disciplined cost focus, the strategic exit from low-margin residential collection business, strong municipal solid waste and special waste landfill volumes, and the benefit of capital investments made in the fleet and automation of recycling facilities.^(a)

• Adjusted SG&A results in the WM Legacy Business reflect the Company’s ongoing commitment to cost discipline.
• SG&A as a percentage of revenue for WM Healthcare Solutions improved 270 basis points sequentially, or 180 basis points on an adjusted basis, reflecting success in the Company’s efforts to integrate and streamline its sales and back-office processes.^(a)

Cash Flow and Investments

• Through the first nine months of the year, the Company generated $4.35 billion of net cash provided by operating activities, an increase of 12.0% from the prior year. This growth has been driven by strong operating EBITDA and a decline in cash taxes. These increases were partially offset by higher cash interest, which is due to the debt funding of the Stericycle acquisition.
• Free cash flow in the first nine months of the year was $2.11 billion, a 13.5% year-over-year increase, driven by robust operating EBITDA growth and a planned reduction in capital investment in sustainability growth projects as the Company moves from peak construction of this portfolio into a period of harvesting strong returns on these businesses. These increases in free cash flow were partially offset by higher capital expenditures to support the business, which includes the addition of WM Healthcare Solutions.^(a)
• The Company’s leverage ratio continues to improve sequentially, driven by increased operating EBITDA and debt repayments. The Company remains on track to achieve its targeted leverage ratio of between 2.5 and 3.0 times by the middle of 2026.⁽ⁱ⁾

Sustainability and WM Healthcare Solutions Update

• The Company continues to progress its strategic investments in recycling and renewable natural gas facilities that drive economic and environmental value. During the quarter, four growth projects commenced operations, including new renewable natural gas facilities in Texas and California, a new recycling facility in Texas, and a recycling automation project in California. These additions bring total renewable natural gas projects completed to 10 out of the original 20 planned facilities and total recycling automation and new market projects completed to 31 out of the original 39 planned.
• During the quarter, the Company progressed its integration of the people and operations of WM Healthcare Solutions into the management and operating structure of its 16 geographic areas, advancing process optimization and alignment across the business.

2025 Outlook

The Company is confident in its ability to deliver upon its full-year outlook ranges for adjusted operating EBITDA and free cash flow.

• The Company is affirming its adjusted operating EBITDA guidance of between $7.475 and $7.625 billion.^(a)
• Free cash flow guidance remains between $2.8 and $2.9 billion.^(a)
• Total Company revenue is now expected to be approximately $25.275 billion, which is at the low end of the Company’s prior guidance range. The decrease from prior expectations is primarily related to a further decline in recycled commodity pricing as well as modestly lower revenue expectations from WM Healthcare Solutions.^(h)
• Projected adjusted operating EBITDA margin guidance has increased to between 29.6% and 30.2% from between 29.6% and 29.9% .^(a)

Fish concluded, “We are pleased with our results in the first three quarters of the year across our business segments, which position us to deliver another year of double-digit adjusted operating EBITDA growth with record margin in our Collection and Disposal business and expanding free cash flow conversion. Looking ahead, 2026 is setting up to be a year of outsized free cash flow growth, with results expected to approach $3.8 billion next year. Our disciplined approach to capital allocation remains unchanged, and we are committed to translating this performance into strong shareholder returns.”^(a)

The Company will host a conference call at 10 a.m. ET on October 28, 2025, to discuss the Third Quarter 2025 results. Information contained within this press release will be referenced and should be considered in conjunction with the call.

Listeners can access a live audio webcast of the conference call by visiting investors.wm.com and selecting “Events & Presentations” from the website menu. A replay of the audio webcast will be available at the same location following the conclusion of the call.

Conference call participants should register to obtain their dial in and passcode details. This streamlined process improves security and eliminates wait times when joining the call.

ABOUT WM

WM (WM.com) is North America’s leading provider of comprehensive environmental solutions. Previously known as Waste Management and based in Houston, Texas, WM is driven by commitments to put people first and achieve success with integrity. The company, through its subsidiaries, provides collection, recycling and disposal services to millions of residential, commercial, industrial, medical and municipal customers throughout the U.S. and Canada. With innovative infrastructure and capabilities in recycling, organics and renewable energy, WM provides environmental solutions to and collaborates with its customers in helping them pursue their sustainability goals. In North America, WM has the largest disposal network and collection fleet, is the largest recycler and is a leader in beneficial use of landfill gas, with a growing network of renewable natural gas plants and the most landfill gas-to-electricity plants, as well as the largest heavy-duty natural gas truck fleet in the industry. WM Healthcare Solutions provides collection and disposal services of regulated medical waste and secure information destruction services in the U.S., Canada and Western Europe. To learn more about WM and the company’s sustainability progress and solutions, visit Sustainability.WM.com.

FORWARD-LOOKING STATEMENTS

The Company, from time to time, provides estimates or projections of financial and other data, comments on expectations relating to future periods and makes statements of opinion, view or belief about current and future events, circumstances or performance. This press release contains a number of such forward-looking statements, including all statements under the heading “2025 Outlook” and all statements regarding future performance and results of our business; achievement of targets, financial guidance or outlook; growth and optimization of our business; integration of the Stericycle business (which is reported as the WM Healthcare Solutions segment) and related contributions, results and benefits, including amount and timing of synergies; amount and timing of sustainability investments, upgrades and project completions and related returns, contributions, and benefits; drivers of performance, including pricing programs and volume; and statements regarding commodity prices. You should view these statements with caution. They are based on the facts and circumstances known to the Company as of the date the statements are made. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those set forth in such forward-looking statements, including but not limited to, failure to implement our optimization, automation, growth, and cost savings initiatives and overall business strategy; failure to obtain the results anticipated from strategic initiatives, investments, acquisitions, or new lines of business; failure to identify acquisition targets, consummate and integrate acquisitions, including our ability to integrate the acquisition of Stericycle and achieve the anticipated benefits therefrom, including synergies; legal, regulatory, operational, technological and other matters that may affect the costs and timing of our ability to integrate and deliver all of the expected benefits of the Stericycle acquisition; failure to maintain an effective system of internal control over financial reporting; existing or new environmental and other regulations, including developments related to emerging contaminants, gas emissions, renewable energy, recyclables, extended producer responsibility and our natural gas fleet; significant environmental, safety or other incidents resulting in liabilities or brand damage; failure to obtain and maintain necessary permits due to land scarcity, public opposition or otherwise; diminishing landfill capacity, resulting in increased costs and the need for disposal alternatives; exposure to different regulatory, legal, financial and economic conditions in international jurisdictions; failure to attract, hire and retain key team members and a high quality workforce; increases in labor costs due to union organizing activities or changes in wage- and labor-related regulations; disruption and costs resulting from severe weather and destructive climate events; failure to achieve our sustainability goals or execute on our sustainability-related strategy and initiatives, including within planned timelines or anticipated budgets due to disruptions, delays, cost increases or changes in environmental or tax regulations and incentives; focus on, and regulation of, environmental and sustainability-related disclosures, which could lead to increased costs, risk of non-compliance, brand damage and litigation risk related to our sustainability efforts; macroeconomic conditions, geopolitical conflict and large-scale market disruption resulting in labor, supply chain and transportation constraints, inflationary cost pressures and fluctuations in commodity prices, fuel and other energy costs; increased competition; pricing actions; impacts from international trade restrictions and tariffs; competitive disposal alternatives, diversion of waste from landfills and declining waste volumes; changing conditions in the healthcare industry; changing conditions in the recycling industry, including impacts on demand, pricing and availability of counterparties; weakness in general economic conditions and capital markets; instability of financial institutions; adoption of new tax legislation; fuel shortages; failure to develop and protect new technology; failure of technology to perform as expected; failure to prevent, detect and address cybersecurity incidents or comply with privacy regulations; inability to adapt and manage the benefits and risks of artificial intelligence; negative outcomes of litigation or governmental proceedings, including those acquired through transactions; and operational or management decisions or developments that result in impairment charges. Please also see the Company’s filings with the SEC, including Part I, Item 1A of the Company’s most recently filed Annual Report on Form 10-K, as updated by subsequent Quarterly Reports on Form 10-Q, for additional information regarding these and other risks and uncertainties applicable to its business. The Company assumes no obligation to update any forward-looking statement, including financial estimates and forecasts, whether as a result of future events, circumstances or developments or otherwise.

NON-GAAP FINANCIAL MEASURES

To supplement its financial information, the Company has presented, and/or may discuss on the conference call, adjusted measures including adjusted earnings per diluted share, adjusted net income, adjusted income from operations and margin, adjusted operating EBITDA and margin, adjusted operating expense and margin, and adjusted SG&A expenses and margin. All adjusted measures and free cash flow are non-GAAP financial measures, as defined in Regulation G of the Securities Exchange Act of 1934, as amended. The Company reports its financial results in compliance with GAAP but believes that also discussing non-GAAP measures provides investors with (i) financial measures the Company uses in the management of its business and (ii) additional, meaningful comparisons of current results to prior periods’ results by excluding items that the Company does not believe reflect its fundamental business performance and are not representative or indicative of its results of operations.

In addition, the Company’s projected adjusted operating EBITDA and margin is anticipated to be adjusted to exclude the effects of other events or circumstances that are not representative or indicative of the Company’s results of operations. Such excluded items are not currently determinable, but may be significant, such as asset impairments and one-time items, charges, gains or losses from divestitures or litigation, and other items. Due to the uncertainty of the likelihood, amount and timing of any such items, the Company does not have information available to provide a quantitative reconciliation of such projection to the comparable GAAP measure.

The Company discusses free cash flow and provides a projection of free cash flow because the Company believes that it is indicative of its ability to pay its quarterly dividends, repurchase common stock, fund acquisitions and other investments and, in the absence of refinancings, to repay its debt obligations. The Company believes free cash flow gives investors useful insight into how the Company views its liquidity, but the use of free cash flow as a liquidity measure has material limitations because it excludes certain expenditures that are required or that the Company has committed to, such as declared dividend payments and debt service requirements. The Company defines free cash flow as net cash provided by operating activities, less capital expenditures, plus proceeds from divestitures of businesses and other assets (net of cash divested); this definition may not be comparable to similarly-titled measures reported by other companies.

The quantitative reconciliations of non-GAAP measures to the most comparable GAAP measures are included in the accompanying schedules, with the exception of projected adjusted operating EBITDA and margin, and projected 2026 free cash flow. Non-GAAP measures should not be considered a substitute for financial measures presented in accordance with GAAP.

Contacts

FOR MORE INFORMATION

WM

Website
www.wm.com

Analysts
Ed Egl

713.265.1656

[email protected]

Media
Toni Werner

[email protected]

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