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By the numbers: Q3 2025
Revenue: $6.44B
Up 14.9% year over year
Net income: $603M
Down 20.7% year over year
Operating EBITDA: $1.72B
Up 2.5% year over year, with an adjusted margin of 30.6%
- Financial picture: During a Q3 earnings call on Tuesday, CEO Jim Fish highlighted WM’s expanded margins, as well as reduced operating costs from technology and fleet automation. The company is also beginning to see returns from its long-term plans to invest in recycling facility automation and renewable natural gas projects, he said. However, headwinds in the Healthcare Solutions sector tempered those bright spots.
- Volume and price: Core price was 6%, exceeding WM’s plan for the quarter. Landfill volumes rose 5.2% in the quarter, with notable drivers in the MSW, special waste and construction and demolition categories. Executives said this was unrelated to cleanup from the California wildfires earlier this year. MSW volumes were up 5% and special waste volumes up 5.5% due to new event work. Industrial volumes were up 1.2%, the first positive quarter since 2022.
- EBITDA drivers: WM’s collection and disposal business continues to be the “engine behind our growth,” Fish said, adding that it contributed more than half of the year-over-year increase in operating earnings before income, taxes, depreciation and amortization. WM’s legacy business, which does not include its Healthcare Solutions segment, achieved a 32% EBITDA margin.
- Healthcare Solutions challenges: Revenue was $628 million in Q3, “slightly below expectations” for the segment as the company continues to integrate Stericycle and its ERP system. Rafa Carrasco, president of WM Healthcare Solutions, said WM offered some customers credits or deferred planned price increases because they were experiencing “a tremendous amount of frustration with their billing or their reporting over the last couple of years” due to previous ERP integration experiences. But the segment has also seen recent successes, he said, such as completing about $200 million worth of service renewals. Executives still see the segment as a long-term profit driver as cost synergies continue to line up.
- Natura PCR closure: WM closed its Natura PCR plastic film processing facility in Texas, attributing the decision to market conditions. “We demonstrated that we can produce a high-quality pellet that customers would buy, but with virgin prices being at all time lows and some of the minimum content legislation being a bit delayed, the buyers were just not there for the product that we were producing,” said Chief Sustainability Officer Tara Hemmer. The facility could reopen depending on market conditions, but Hemmer said it will likely require broader implementation and enforcement of recycled content laws, as well as buyers willing to acknowledge that there is often a higher price for PCR over virgin options.
- Recycled commodities: Recycled commodity prices declined nearly 35% year over year, Fish said, but WM’s recycling segment operating EBITDA grew by 18%, mainly due to investments in MRF automation. WM expects markets to affect the previously estimated 2026-2027 blended commodity price range of between $75 a ton and $150, but Hemmer said the company is “confident in where we’re heading.”
- RNG updates: Hemmer noted “great progress” on WM’s remaining renewable projects, but noted that timing of RIN sales contributed to lower sequential earnings for the quarter. Hemmer said WM decided to defer sales of some RINs in Q4 because of an uptick in price. For the first nine months of the year, WM doubled the amount of RNG production, and the company has already pre-sold about 45% off offtake for 2026, she said. A little less than half of what remains will be sold in the transportation market, and the rest will be sold in the voluntary market. In 2026, WM plans to fully allocate RNG production to fleet applications. RIN prices for 2026 could be in the $220 to $230 range, she said.
- M&A activity: WM has closed on about $450 million in deals so far this year, and could reach about $500 million by year’s end, said President John Morris. “We've got a handful of transactions that are out there that could close in Q4 or could roll into into next year,” he said. WM expects in 2026 to return to the “normal” $100 million to $200 million range.
- Revised guidance: WM maintains its full-year growth expectations for operating EBITDA and free cash flow guidance, Rankin said, while full-year revenue is projected to be at the low end of the previous guidance range of between $25.275 billion and $25.475 billion due to weakness in recycled commodity prices and revised expectations for the Healthcare Solutions segment. Margin expectations have increased to between 29.6% and 30.2%.
