Waste Management's Q1 2025: Unraveling Contradictions in Stericycle Synergies and Pricing Trends

Synergy capture expectations for Stericycle acquisition, commercial pricing trends, Stericycle synergy capture and impact on margins, labor efficiency and automation, and synergy capture and Stericycle acquisition are the key contradictions discussed in Waste Management's latest 2025Q1 earnings call.



Strong Financial Performance:
- WM reported a 12% increase in operating EBITDA for the first quarter compared to the same period in 2024.
- The growth was driven by solid operational performance in the collection and disposal business, contributions from WM Healthcare Solutions, and increases in sustainability businesses.

Sustainability Investments and Margin Expansion:
- Combined operating EBITDA from recycling and renewable energy grew by over 20% year-over-year.
- This growth was fueled by new renewable natural gas (RNG) plants and strong pricing for natural gas and renewable electricity, with automated recycling facilities delivering nearly double the operating EBITDA margin compared to non-automated facilities.

Core Collection and Disposal Business Performance:
- First quarter operating EBITDA for the collection and disposal business was up almost 5%, with a margin expansion of 10 basis points.
- This growth was achieved despite challenges like tough winter weather and the expiration of alternative fuel tax credits, driven by strong pricing strategies that leveraged data-driven decision-making.

WM Healthcare Solutions Synergies:
- The healthcare solutions segment contributed $95 million of EBITDA in the first quarter, with an SG&A margin expansion of 20 basis points.
- Synergies were realized through sales coverage optimization and back-office streamlining, with the company on track to achieve $250 million of annual run rate synergies by 2027.