Waste Management’s third quarter results were met with a negative market reaction, as both revenue and non-GAAP earnings per share fell slightly short of Wall Street expectations. Management attributed the shortfall to lower-than-expected recycled commodity prices and a more measured pace of growth in the Healthcare Solutions segment, resulting from deferred price increases and customer credits. CEO James Fish emphasized that the core collection and disposal business remained the primary driver of operational EBITDA, highlighting strong disposal volumes and disciplined pricing strategies. Fish noted, “Our collection and disposal business continues to be the engine behind our growth, contributing more than half of the year-over-year increase in operating EBITDA.”
Is now the time to buy WM? Find out in our full research report (it’s free for active Edge members).
Waste Management (WM) Q3 CY2025 Highlights:
- Revenue: $6.44 billion vs analyst estimates of $6.51 billion (14.9% year-on-year growth, 1% miss)
- Adjusted EPS: $1.98 vs analyst expectations of $2.01 (1.6% miss)
- Adjusted EBITDA: $1.97 billion vs analyst estimates of $1.96 billion (30.6% margin, in line)
- EBITDA guidance for the full year is $7.55 billion at the midpoint, in line with analyst expectations
- Operating Margin: 15.3%, down from 20% in the same quarter last year
- Market Capitalization: $80.48 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Waste Management’s Q3 Earnings Call
- Patrick Brown (Raymond James) asked about the impact of one-time landfill cleanup work and charges related to plant closures. CFO Devina Rankin clarified that wildfire-related volumes had limited impact in Q3, and that plant charges were due to market-driven decisions rather than technology failures.
- Noah Kaye (Oppenheimer) inquired about the strength in municipal solid waste volumes and the drivers of positive industrial volume inflection. CEO James Fish explained that industrial growth was geographically broad, with cross-selling from hospital customers contributing to the improvement.
- Trevor Romeo (William Blair) questioned the deferral of pricing increases in Healthcare Solutions and long-term pricing power. Fish detailed that deferred increases and customer credits were part of a deliberate customer-centric approach, with expected stabilization in 2026.
- Toni Kaplan (Morgan Stanley) asked about yield trends and customer conversations heading into 2026. Fish and COO John Morris noted strong pricing across waste streams and emphasized that maintaining a favorable price-cost spread remains a priority.
- Jim Schumm (TD Cowen) requested clarity on medical waste and document destruction performance. Morris highlighted strong renewals and synergies in medical waste, while noting operational improvements in the document destruction business.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the pace of synergy realization and revenue stabilization in the Healthcare Solutions segment, (2) sustained improvement in recycling margin performance despite commodity price volatility, and (3) execution on technology and automation investments to further reduce operational costs. Progress on regulatory developments affecting recycling and renewable energy markets will also be important indicators for future growth.
Waste Management currently trades at $200, down from $213.67 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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