Waste Management 2025 Q2 Earnings Beats Expectations as Net Income Rises 6.9%

Waste Management (WM), ranking 155th by market capitalization, reported its fiscal 2025 Q2 earnings on Jul 29th, 2025. The results surpassed expectations, with revenue increasing by 19.0% year-over-year to $6.43 billion, beating analyst estimates of $6.36 billion. The company raised its free cash flow guidance due to operational efficiencies but trimmed full-year revenue guidance, reflecting challenges from recycled commodity prices and adverse weather conditions.

Revenue
Waste Management's total revenue for Q2 2025 increased significantly to $6.43 billion, up from $5.40 billion in the same quarter last year. The collection segment led with $3.86 billion, comprising commercial collection at $1.40 billion, industrial at $790 million, and residential at $872 million. Other collection activities contributed $796 million. The landfill segment generated $1.04 billion, while transfer and recycling processing added $389 million and $381 million, respectively. WM Renewable Energy brought in $115 million, and WM Healthcare Solutions reported $646 million. Corporate and other segments totaled $7 million.

Earnings/Net Income
Waste Management's earnings per share increased to $1.80 in Q2 2025 from $1.70 in Q2 2024, indicating continued growth. The company's net income rose by 6.9% to $727 million from $680 million in the previous year. The EPS growth reflects positive performance and market confidence.

Post-Earnings Price Action Review
The strategy of purchasing Waste Management shares following a revenue beat and holding them for 30 days has yielded a substantial return of 95.57%, outperforming the benchmark return of 87.35%. This approach resulted in an excess return of 8.23% with a compound annual growth rate (CAGR) of 14.44%, showcasing significant potential for growth. Moreover, the strategy demonstrated strong risk management with a maximum drawdown of 0.00% and a Sharpe ratio of 0.78, indicating a favorable balance between risk and reward. These outcomes suggest that investors seeking both stability and growth may find this strategy appealing due to its consistent performance and effective risk mitigation.

CEO Commentary
James C. Fish, CEO of Waste Management, expressed optimism about the company's performance, stating that the "sustained strong results across all market cycles" demonstrate its capability as a "forever stock." He highlighted a 19% growth in operating EBITDA, driven mainly by the collection and disposal business, emphasizing the importance of customer lifetime value and technology in optimizing costs. Fish noted the robust landfill volumes and growth in special waste volumes, particularly from wildfire cleanup in California. He reaffirmed the strategic focus on acquisitions, sustainability investments, and the integration of WM Healthcare Solutions, indicating a strong position for future success.

Guidance
Waste Management confirmed its 2025 operating EBITDA guidance at $7.55 billion and increased its free cash flow expectations to between $2.8 billion and $2.9 billion. The company anticipates revenue to be approximately 1% below initial expectations, primarily due to recycled commodity prices and adverse weather conditions. Despite this, they project over 15% EBITDA growth for the year, with an expected annual operating EBITDA margin increase of 40 basis points at the midpoint, reflecting strong performance in collection and disposal operations and successful synergy capture in Healthcare Solutions.

Additional News
Waste Management has been actively pursuing mergers and acquisitions, projecting a total of approximately $500 million for the year 2025. The company spent $366 million on acquisitions in the first half of the year, including the acquisition of WB Waste Solutions, a commercial and industrial hauler in the Washington, D.C. area. In a strategic move, John Morris was appointed as the President of Waste Management, adding leadership strength to the company. Furthermore, Waste Management announced a 10% increase in its dividend, signaling a commitment to delivering value to shareholders and confidence in its financial stability.