$WM · WASTE MANAGEMENT INC
WM reported Q3 2026 results with revenue of $6.846B (+6.3% YoY), GAAP diluted EPS of $2.05, and adjusted EPS of $2.15. Adjusted operating EBITDA rose 5.8% to $2.121B, but margin compressed 10 bps to 31.0% as higher fuel and risk management costs offset pricing gains. The company affirmed full-year 2026 guidance and expects revenue at the high end of its $26.275B–$26.475B range and free cash flow at the high end of $3.75B–$3.85B.
- Revenue grew 6.3% YoY to $6.846B, driven by core price of 5.8% and Collection & Disposal yield of 3.4%.
- GAAP diluted EPS of $2.05 vs $1.49 in Q3 2025; adjusted EPS of $2.15 vs $1.98.
- Adjusted operating EBITDA margin compressed 10 bps YoY to 31.0%, pressured by higher fuel costs and risk management costs.
- Collection & Disposal volume declined 0.4% (0.5% workday-adjusted), impacted by intentional shedding of lower-margin residential business.
- Free cash flow through nine months surged 42% to $3.01B; company returned $957M to shareholders in Q3 via buybacks and dividends.
Extended-hours trading shows WM at $229.65, down 2.61% from the regular close of $235.81. The margin compression and volume decline appear to be weighing on sentiment despite strong headline EPS growth and affirmed full-year guidance.
Despite strong headline numbers, WM's margin compression and persistent volume declines reveal cracks in the bull case for a $94B waste-industry giant trading at a premium multiple.
WM's core price of 5.8% remains strong, reflecting the pricing power of the dominant waste-services franchise. Healthcare Solutions (Stericycle) contributed 30 bps to adjusted EBITDA margin, showing early synergy capture in a segment that grew operating EBITDA over 30%.
Higher fuel costs and increased risk management costs each shaved 40 bps from adjusted operating EBITDA margin. Collection & Disposal volume continues to decline as the company intentionally sheds lower-margin residential business and faces commercial losses from prior national account broker departures.