Waste Management posts 7.1% Q4 revenue growth and 31.3% adjusted EBITDA margin
Waste Management's Q4 2025 revenue rose 7.1% to $6.313 billion with adjusted operating EBITDA of $1.974 billion, a 31.3% margin. Full-year free cash flow grew 26.8% to $2.94 billion, and the company plans nearly 30% free cash flow growth to $3.75–$3.85 billion in 2026.
1. Q4 Financial Results Highlight Modest Growth and Margin Expansion
Waste Management reported fourth-quarter 2025 revenue of $6,313 million, a 7.1% increase over the prior year, driven by 6.3% core price growth and 0.1% volume uplift. Adjusted operating EBITDA rose to $1,974 million, yielding a 31.3% margin, up 250 basis points from Q4 2024. Net income on an adjusted basis reached $780 million, or $1.93 per diluted share, compared with $688 million, or $1.70 per share, a year ago. Segment performance was mixed: the Legacy Business generated $5,698 million in revenue with a 32.8% adjusted EBITDA margin, while Healthcare Solutions delivered $105 million of EBITDA at a 17.1% margin, reflecting ongoing integration synergies.
2. Full-Year 2025 Performance Underscores Operational Discipline
For the full year, Waste Management achieved revenue of $25,204 million, up 14.2%, underpinned by price yield of 3.8% and collection volumes of 0.3% on a workday-adjusted basis. Adjusted operating EBITDA reached $7,582 million, corresponding to a 30.1% margin—the highest annual adjusted margin in company history. Legacy Business EBITDA grew 10.1% with margin expansion of 150 basis points to 31.5%, while Healthcare Solutions EBITDA rose to $424 million with a 16.9% margin. Operating expenses improved by 160 basis points in the Legacy Business, reflecting cost controls and fleet investments.
3. Robust Cash Flow Generation and Strengthened Balance Sheet
In 2025, net cash provided by operating activities totaled $6.04 billion, a 12.1% increase year-over-year, driving free cash flow of $2.94 billion, up 26.8%. Capital expenditures for the year included approximately $400 million on solid waste and recycling acquisitions and sustained investments in renewable natural gas and recycling automation projects. The company maintained a leverage ratio below 3.0x, positioning it for further debt reduction and shareholder returns.
4. 2026 Outlook Targets Continued Growth and Shareholder Returns
Management expects 2026 revenue of $26,425–$26,625 million, representing mid-point growth of 5.2%, supported by core pricing of 5.4–5.8%, yield of 3.2–3.6% and modest volume gains. Adjusted EBITDA is projected at $8,150–$8,250 million, a 6.2% increase, with margin expansion of 30 basis points to 31.0%. Free cash flow is forecast at $3,750–$3,850 million, a 29.4% rise. The company plans to return approximately $3.5 billion to shareholders through dividends and share repurchases, increase the annual dividend by $0.48 to $3.78 per share, and target a leverage ratio of 2.5–3.0x by year-end.