Capital return
5Cash Flow from Operations Increases Nearly 12%, Supporting the Return of More Than $1 Billion to Shareholders During the Quarter
Corporate events
WM Completes Four Sustainability Growth Projects and Releases its 2026 Sustainability Report
Management commentary
“Second quarter earnings growth, margin expansion, and cash flow generation reflect the strength of our business model and consistent execution from the WM team,” said Jim Fish, WM’s CEO.
4“Adjusted operating EBITDA grew 5.5%, or 9.1% when removing contributions from wildfire cleanup activities in the prior year.
Each of our operating segments contributed to growth in adjusted operating EBITDA and margin, led by the Collection and Disposal business and bolstered by our healthcare and sustainability businesses.
The momentum across our operations and our confidence in the ability to execute our strategy position us well to achieve strong 2026 results.” (a)
Fish continued, “Our results continue to demonstrate our ability to harvest the benefits of our strategic investments in technology and automation, sustainability growth projects, and our healthcare business.
6Growth and productivity gains across our diversified portfolio, anchored by our Collection and Disposal business, drove a nearly 12% increase in cash flow from operations.
With a strong balance sheet, industry-leading asset network, and significant technology runway ahead, we are confident in our ability to deliver long-term value for shareholders.”
Results
Revenue grew 4.0%, driven by core price of 5.7% and Collection and Disposal yield of 3.6%.
In addition to disciplined execution on pricing, revenue growth was driven by increased volumes in the recycling and renewable energy businesses as a result of completed growth projects as well as higher energy surcharges.
(e)
Collection and Disposal volume declined 1.8%, primarily due to wildfire cleanup activities that benefited the prior year period.
7Excluding prior year’s wildfire cleanup activity, landfill volumes grew 1.7% and Collection and Disposal volume declined 0.4%.
8While intentional shedding of lower-margin residential business drove a portion of the Collection and Disposal volume decline, residential volume losses have begun to slow, as anticipated, with losses improving sequentially by 210 basis points.
Operating expenses were 59.2% of revenue, in-line with prior year despite higher fuel-related expenses, demonstrating the Company’s continued commitment to using technology and automation to optimize costs and enhance operational efficiency.
SG&A expenses were 10.2% of revenue, or 9.9% on an adjusted basis, an improvement of 60 basis points both on a reported and adjusted basis from the prior year, reflecting strong cost discipline and continued synergy capture in Healthcare Solutions.
(a)
Total Company operating EBITDA margin expanded 90 basis points, or 40 basis points on an adjusted basis, in the second quarter, overcoming a 60-basis point headwind from prior year wildfire cleanup volumes and a 40-basis point headwind from the impact of higher energy surcharges.
(a)
Collection and Disposal operating EBITDA grew by $104 million, or $79 million on an adjusted basis.
Growth overcame a 70-basis point headwind to the segment from wildfire cleanup contributions in the prior year and was driven by favorable price-to-cost spread, reflecting the Company’s continued success in reducing frontline turnover and disciplined cost management initiatives.
(a)
Together, operating EBITDA in the recycling and renewable energy businesses grew $39 million, or $40 million on an adjusted basis, an increase of 32.5% compared to last year driven by higher recycling volumes, efficiencies from automation projects, and increased renewable natural gas production.
(a)(f)
Operating EBITDA grew by $25 million, or $11 million on an adjusted basis, in the Healthcare Solutions business, driven by effective SG&A cost management and benefits from integration with core Collection and Disposal operations.
(a)
The Company generated $1.73 billion of net cash provided by operating activities compared to $1.55 billion in the prior year period, primarily driven by operating EBITDA growth and working capital improvements.
Free cash flow was $1.10 billion, compared to $818 million in the prior year period, an increase of 34.5%.
(a)
Capital return
The Company returned $1.04 billion to shareholders in the second quarter, consisting of $659 million in share repurchases and $379 million in cash dividends.
Corporate events
During the quarter, the Company completed three new renewable natural gas facilities, two in South Carolina and one in Florida that together added about 3.5 million MMBtu of expected annual run-rate production.
Additionally, the Company completed a new recycling facility in Denver, Colorado that added about 60,000 tons of annual processing capacity.
WM released its 2026 Sustainability Report, Driving Value Through Sustainability , highlighting progress toward the Company’s sustainability ambitions and describing how its sustainability businesses drive value while advancing a more sustainable future for communities and the environment.
Outlook
2026 OUTLOOK
3With two quarters of the year complete, the Company remains confident in its ability to deliver its full-year outlook for adjusted operating EBITDA between $8.15 and $8.25 billion and free cash flow of between $3.75 and $3.85 billion.Guidance reaffirmed
1Revenue is now expected to be between $26.275 and $26.475 billion dollars, reflecting a reduction of approximately 0.6% compared to the prior outlook, primarily driven by lower volume expectations, partially offset by higher energy surcharges.Guidance lowered
2Accordingly, adjusted operating EBITDA margin in 2026 is now expected to be between 31.0% and 31.2%, representing an increase of 20 basis points.Guidance raised
Despite a slightly lower revenue outlook, the resilience of the Company’s operating model, including a proven ability to flex costs and drive productivity, supports continued confidence in achieving original profitability and cash flow targets.Guidance lowered
(a)
(c)Beginning in 2026, landfill accretion expense was moved from operating expenses to depreciation, depletion, amortization, and accretion.
Landfill accretion expense in the three months ended June 30, 2026 and 2025 was $39 million and $36 million, respectively.
For comparability purposes, 2025 actuals have been updated to reflect that change.
Results
(f)The Company’s blended average price received for single stream recycled commodities sold during the quarter was about $75 per ton compared to about $84 per ton in the prior year period.
The average price received for Renewable Fuel Standard credits was $2.33 during the quarter compared to $2.53 in the prior year period.
The average price received for natural gas was $2.23 per MMBtu during the quarter compared to $2.81 per MMBtu in the prior year.
The average price received for electricity was about $69 per megawatt hour in the quarter compared to about $67 per megawatt hour in the prior year period.
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