Waste management company Waste Connections (NYSE: WCN) met Wall Street’s revenue expectations in Q3 CY2025, with sales up 5.1% year on year to $2.46 billion. Its non-GAAP profit of $1.44 per share was 4.3% above analysts’ consensus estimates.
Is now the time to buy WCN? Find out in our full research report (it’s free for active Edge members).
Waste Connections (WCN) Q3 CY2025 Highlights:
- Revenue: $2.46 billion vs analyst estimates of $2.45 billion (5.1% year-on-year growth, in line)
- Adjusted EPS: $1.44 vs analyst estimates of $1.38 (4.3% beat)
- Adjusted EBITDA: $830.3 million vs analyst estimates of $824.9 million (33.8% margin, 0.7% beat)
- Operating Margin: 17.9%, down from 20.3% in the same quarter last year
- Organic Revenue rose 6.3% year on year vs analyst estimates of 1.9% growth (444 basis point beat)
- Market Capitalization: $45.58 billion
StockStory’s Take
Waste Connections’ third quarter results drew a positive market response, driven by robust organic growth and strategic execution despite ongoing macroeconomic headwinds. Management credited strong pricing performance, disciplined contract management, and improvements in employee retention and safety for contributing to underlying margin expansion. CEO Ronald Mittelstaedt highlighted, “We delivered margins of 33.8%, up 100 basis points year-over-year, excluding commodity impacts and the Chiquita Canyon landfill closure,” emphasizing progress on operational initiatives and the benefits of technology-driven pricing tools.
Looking ahead, Waste Connections’ outlook is shaped by ongoing investments in technology, expectations for continued solid waste margin expansion, and a robust acquisition pipeline. Management indicated that the benefits from digitization and artificial intelligence (AI) are expected to drive further pricing retention, route optimization, and efficiency gains. Mittelstaedt noted, “We should be positioned for mid-single-digit revenue growth in 2026 from price-led organic growth and recent acquisitions,” while CFO Mary Whitney referenced the company’s ability to maintain a 150 to 200 basis point price-cost spread as these initiatives scale.
Key Insights from Management’s Remarks
Management attributed the quarter’s performance to strong pricing execution, improved employee retention, and disciplined contract management, while also advancing on technology and acquisition fronts.
-
Technology investment accelerates results: Management reported rapid returns from digitization and AI, particularly in pricing, forecasting, and planning. These tools have improved pricing retention and reduced churn, with only 1/7 of business units utilizing the system so far. The rollout is expected to reach up to 75% by 2026, suggesting more efficiency gains ahead.
-
Margin expansion through retention: Employee engagement and lower turnover contributed to cost savings in labor, maintenance, and risk management. Voluntary turnover fell for the twelfth consecutive quarter, and safety incident rates hit historic lows, supporting 80 basis points of underlying margin expansion despite commodity headwinds.
-
Purposeful contract shedding: The company continued to shed low-margin contracts, which affected reported volumes but improved overall profitability. CFO Mary Whitney explained that about 70 basis points of negative volume in the quarter resulted from this deliberate strategy.
-
Active M&A pipeline: Waste Connections closed or signed approximately $300 million in annualized revenues from acquisitions year-to-date, including two large Florida deals. The company expects continued activity into Q4 and 2026, reinforcing its market selection strategy.
-
Sustainability and regulatory progress: The company achieved key sustainability targets, including a 19% emissions reduction and significant progress on landfill remediation projects. Investments in recycling and renewable energy projects remain on track, with most revenue impacts expected from 2027 onward.
Drivers of Future Performance
Waste Connections expects price-led organic growth, technology-driven efficiencies, and ongoing acquisition integration to drive performance amid commodity and cost headwinds.
-
Digital transformation and AI: The company is expanding AI-powered tools for pricing, route optimization, and customer retention across its network, aiming to reduce churn and improve net pricing. Management anticipates most benefits materializing over a two- to three-year horizon as the rollout accelerates.
-
Acquisition integration and volume trends: Recent acquisitions are expected to contribute approximately 1% revenue carryover in 2026, though management remains cautious about continued headwinds from commodity prices and planned contract shedding. Volumes are projected to stabilize as these effects moderate.
-
Margin management and risk factors: Waste Connections targets above-average underlying solid waste margin expansion, offset by margin dilution from acquisitions and commodity-related revenue streams. Ongoing investments in employee engagement, safety, and risk management are expected to yield incremental margin gains, but management remains attentive to external risks such as tariffs, regulatory changes, and macroeconomic volatility.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) the pace and effectiveness of technology and AI adoption in pricing and operations, (2) progress on acquisition integration and the impact on market share and margins, and (3) stabilization of commodity-related revenue and ongoing improvements in employee retention and safety. Execution on landfill remediation and renewable energy investments will also be key indicators for long-term value creation.
Waste Connections currently trades at $177.34, up from $173.71 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
Stocks That Trumped Tariffs
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
