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By the numbers
Q1 net income: $637M
Down 10% year over year
Q1 operating EBITDA: $1.67B
Up 9.1% year over year, with an adjusted margin of 27.7%
- Financial picture: During WM’s earnings call on Tuesday, CEO Jim Fish noted that the first quarter “exceeded our expectations,” particularly after serious weather in the Southeast and Gulf Coast created “pretty tough” months of operations in January and February. Fish said that will likely have little impact on the rest of the year’s results, noting otherwise strong performance in the collection and disposal business. WM also reaffirmed its full-year guidance.
- Stericycle integration: WM Healthcare Solutions, created from the acquisition of Stericycle, made “significant progress” in its integration process during the quarter, said Rafael Carrasco, who heads the segment. The company has made some tweaks to its enterprise resource planning system to streamline operations. The segment contributed $95 million of adjusted operating earnings before interest, taxes, depreciation and amortization in Q1, and it’s on track to achieve synergies of $80 million to $100 million in 2025.
- M&A: WM expects to spend more than $500 million on solid waste acquisitions in 2025, said CFO Devina Rankin, compared to about $800 million in 2024. “Incremental tuck-in acquisition revenue, dependent on the timing of close, could now be in the ballpark of $80-125 million,” she said. That’s up from WM’s original guidance of between $35 million to $80 million for such acquisitions. Labor challenges and “long-term outlook for disposal options” are some of the factors prompting companies to sell, COO John Morris added.
- Tariff impacts: Capital expenditures were $831 million in the quarter, Rankin said. Recent tariff uncertainty is not expected to have an immediate impact on spending plans for 2025. Most of WM’s expected truck deliveries are already underway, as well as most planned RNG and recycling projects for the year, she said. “We are particularly well positioned to complete our sustainability growth investments at targeted capital investment levels, because we've been deliberate in preparing the equipment needed for these projects ahead of time,” she said.
- Solid waste pricing: Revenue growth for the quarter was mainly driven by core price of 6.5%, Morris said. Pricing across commercial collection, transfer stations and landfills were also strong, though positive landfill and commercial collection volumes were offset by a “strategic exit from low-margin residential business.” WM maintained its 2025 core price outlook of between 5.8% and 6.2%.
- Volumes: Cleanup from the California wildfires increased special waste volumes in Q1, but those gains were offset by winter weather impacts elsewhere in the country, Morris said. Volumes from wildfire cleanup should continue through at least the end of Q3, he said.
- Recycled commodities: Tariffs could create a positive effect for the sale of some of WM’s recycled commodities, since its non-fiber materials are sold domestically, said Chief Sustainability Officer Tara Hemmer. OCC prices could take a hit from potential retaliatory tariffs, since WM ships some fiber to markets in Southeast Asia and India, she said. The company’s blended average commodity price was about $88 per ton in Q1, compared to about $84 per ton this time last year.
- Recycling projects: WM opened two new MRFs in California and Texas during Q1, and the company has plans for seven more “next gen” facilities scheduled to come later in 2025, Fish said. WM last week announced it also reopened a MRF in Maryland with new automation features.
- RNG projects: Combined operating EBITDA from recycling and renewable energy grew by over 20% year over year, Rankin said. Growth was fueled by new RNG plants that came online late in 2024, as well as “strong pricing” for natural gas and renewable electricity. WM is in the process of building eight more RNG facilities set to be complete later this year. RIN pricing has been in the “low 20s” as the industry waits for the Trump administration to make decisions on the Renewable Fuel Standard, she said.
