Waste Management 2025 Q3 Earnings Net Income Drops 20.7% Amid Revenue Growth

Waste Management (WM) reported Q3 2025 results that fell short of expectations, with both revenue and earnings below analyst forecasts. The stock price dipped 2.35% in after-hours trading as investors digested the results and revised 2025 revenue guidance downward. Despite robust 14.9% year-over-year revenue growth, declining recycling commodity prices and softer healthcare division performance pressured profitability.

Revenue

Waste Management’s total revenue surged 14.9% to $6.44 billion in Q3 2025, driven by strong performance across its core segments. The Collection and Disposal business led the charge, contributing $3.93 billion, while Landfill operations added $995 million. Commercial services generated $1.42 billion, and Residential services totaled $884 million. Industrial and Transfer segments reported $808 million and $396 million, respectively. Recycling Processing and Sales saw a 13.9% year-over-year decline to $372 million due to falling commodity prices, while WM Renewable Energy and Healthcare Solutions contributed $115 million and $628 million.

Earnings/Net Income

Adjusted EPS fell 20.6% to $1.50, and net income declined 20.7% to $603 million, reflecting margin pressures from recycling headwinds and integration costs. The EPS miss of $0.59 and revenue shortfall of $260 million underscored the challenges posed by external market conditions.

Post-Earnings Price Action Review

Following the earnings release, Waste Management’s stock price dipped 0.70% in the latest trading day and 1.56% month-to-date, with a sharper 2.35% decline in after-hours trading. The market’s reaction was tempered by the company’s reaffirmed EBITDA and free cash flow guidance, though the downward revision of full-year revenue expectations to $25.275 billion—citing weaker commodity prices and healthcare division performance—sparked caution. Investors focused on the resilience of core operations, particularly the record 38.4% EBITDA margin in Collection and Disposal, which offset some near-term headwinds.

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CEO Commentary

CEO Jim Fish highlighted momentum driven by disciplined growth, cost optimization, and expanding sustainability businesses, noting record margins in the Collection and Disposal segment. Strategic investments in technology, asset utilization, and pricing discipline were emphasized, alongside adjusted EBITDA growth in Recycling Processing and Sales despite commodity challenges. Fish expressed confidence in achieving 2025 guidance and long-term financial objectives, with 2026 expected to deliver “outsized free cash flow growth” near $3.8 billion.

Guidance

The company reaffirmed 2025 adjusted operating EBITDA guidance of $7.475–$7.625 billion and free cash flow of $2.8–$2.9 billion. Total revenue was revised to $25.275 billion, reflecting lower commodity prices and healthcare division performance. Adjusted EBITDA margin guidance increased to 29.6–30.2%. For 2026, management expects free cash flow near $3.8 billion, with a disciplined capital allocation approach to drive shareholder returns.

Additional News

1. M&A Activity: Waste Management completed the $7.2 billion acquisition of Stericycle in late 2024, expanding its medical and hazardous waste services under the WM Healthcare Solutions division. This strategic move positioned WM as a leader in regulated medical waste, with CEO Jim Fish citing “complementary business platforms” for long-term growth.

2. Dividend Announcement: The company declared a quarterly dividend of $0.825 per share, representing a 1.5% yield, and maintaining its 25-year streak of annual dividend increases.

3. Institutional Stake Increase: GWN Securities Inc. boosted its stake by 48.8%, acquiring 10,374 additional shares to own 31,652 shares, making WM its 13th largest position.