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**Key Takeaways:**
- **Record Margins and Growth:** Operating EBITDA margin hit 30.6%, with legacy business at 32%, driven by cost control and healthcare synergies.
- **Healthcare Integration Success:** Cross-selling added $5M annually, and healthcare EBITDA exceeded expectations despite deferred pricing.
- **Free Cash Flow Outlook:** 2026 guidance of $3.8B reflects harvesting of sustainability and healthcare investments.
- **Recycling Resilience:** 18% EBITDA growth in recycling despite 35% drop in commodity prices, showcasing automation benefits.
- **Industrial Recovery:** First positive quarter in 3 years, signaling broader economic recovery in construction and industrial sectors.

**【CEO Summary Section】**
- Delivered strong third-quarter performance with operating EBITDA growth of 15% and free cash flow growth of 33%, driven by core collection and disposal business.
- MSW volumes grew 5%, special waste volumes increased 5.5%, and healthcare solutions cross-selling added $5 million annually for a key customer.
- Free cash flow guidance for 2026 is approaching $3.8 billion, reflecting benefits from sustainability investments and healthcare integration.

**【CFO Financial Commentary】**
- Operating EBITDA margin reached 30.6%, the highest quarterly result in company history, with legacy business margin at 32%.
- Healthcare Solutions contributed $115 million in incremental EBITDA, exceeding synergy expectations, despite deferred price increases and credits to customers.
- Free cash flow grew 13.5% year-to-date to $2.11 billion, with operating EBITDA to free cash flow conversion at 42% in Q3.

**【Q&A Highlights】**
- Healthcare Solutions: Deferred price increases and credits to customers caused revenue softness, but synergies and internalization drove EBITDA growth. ERP stabilization expected by Q1 2026.
- Recycling: Commodity prices down 35%, but EBITDA up 18% due to automation and cost control. RNG sales expected to remain strong with RIN prices in $2.20-$2.30 range.
- Industrial Volumes: First positive quarter since 2022, driven by temporary roll-off rebound and healthcare internalization. Core price growth at 6% offset margin headwinds.
- Capital Allocation: 2026 free cash flow of $3.8 billion to be used for dividend, M&A, and share buybacks. M&A pipeline focused on tuck-in acquisitions and healthcare cross-selling opportunities.

Waste Management, Inc. (WM) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

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Cost of Financing Services

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Operating Expenses

Selling, General and Administrative Expenses

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WM

WM fundamentals

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