WM's Green Investments Power Strong Q1 Earnings Amid Market Shifts

HOUSTON, TX – April 28, 2026 – WM, North America’s largest environmental solutions provider, began 2026 with robust financial performance, announcing first-quarter results that exceeded expectations and showcased the success of its long-term strategy. The company reported significant growth in earnings and cash flow, crediting a combination of disciplined pricing, operational cost controls, and substantial contributions from its expanding portfolio of sustainability-focused investments.

Revenue for the quarter grew 3.5% year-over-year to $6.23 billion, while adjusted earnings per diluted share rose to $1.81, up from $1.67 in the same period last year. The strong results underscore the company's ability to navigate economic crosswinds and operational hurdles, including harsh winter weather that impacted volumes across the industry.

“Strong earnings and cash flow results in the quarter achieved our expectations, reflecting the strength of the WM team and the resilience of our business model,” said Jim Fish, WM’s CEO, in the company’s earnings announcement. He noted that the performance reinforces the company's confidence in its full-year financial outlook.

Pricing Power and Financial Discipline

A key driver of WM's impressive quarter was its ability to effectively manage pricing in its core business. The company achieved a core price increase of 6.3%, contributing to a collection and disposal yield of 3.9%. This disciplined pricing strategy proved crucial in offsetting inflationary pressures and expanding profitability.

This trend is not unique to WM. The broader waste management industry has faced persistent cost pressures from fuel price volatility, rising labor costs, and increased capital expenditures for regulatory compliance and technological upgrades. Competitor Waste Connections also reported implementing a 6% core price increase in the first quarter to manage similar challenges, indicating a market-wide acceptance of higher rates to cover the rising cost of service.

The most striking figure in WM's report was its free cash flow, which nearly doubled to $920 million from $475 million in the first quarter of 2025. This surge was driven by a combination of higher earnings and improvements in working capital. The substantial cash generation provides WM with significant flexibility to fund its growth initiatives and deliver value to its investors.

The Expanding Sustainability Empire

Beyond traditional collection and disposal, WM's strategic pivot toward a circular economy model is clearly paying dividends. The company's Recycling and Renewable Energy businesses were standout performers, with their combined operating EBITDA growing by $51 million, or $49 million on an adjusted basis. This growth was fueled by increased production from renewable natural gas (RNG) projects and enhanced efficiency from new and automated recycling facilities.

During the quarter, WM began operations at two new state-of-the-art Material Recovery Facilities (MRFs) in Ontario, Canada, and completed a major automation project at its single-stream facility in South Florida. Together, these projects added nearly 300,000 tons of annual processing capacity. The new Canadian facilities are particularly significant, as they are designed to support Ontario's recently enacted Extended Producer Responsibility (EPR) legislation, which shifts the financial and operational responsibility for recycling to product manufacturers. Equipped with advanced robotics, optical sorters, and artificial intelligence, these MRFs represent the future of recycling, enabling higher recovery rates and cleaner material streams.

The company’s bet on RNG continues to mature into a powerful earnings driver. WM has been systematically investing in a network of plants that capture landfill gas and convert it into pipeline-quality natural gas. This strategy not only creates a valuable, low-carbon fuel source but also significantly reduces greenhouse gas emissions. The company's long-term plan projects its RNG portfolio will generate approximately $600 million in adjusted operating EBITDA in 2026, demonstrating the massive potential of this green energy venture.

An Operational Masterclass

While top-line growth and sustainability investments grabbed headlines, WM's performance was also a testament to its operational prowess. The company successfully managed its cost structure, with adjusted operating expenses as a percentage of revenue improving by 70 basis points compared to the prior year. This efficiency gain reflects a continued focus on leveraging technology and automation to streamline routes, reduce fuel consumption, and optimize labor.

Interestingly, total collection and disposal volume declined by 1.5% during the quarter. However, this figure tells a story of strategic optimization rather than weakness. The decline was partially attributed to severe winter weather, an issue that affected competitors as well. More importantly, it reflects WM's “intentional shedding of lower-margin residential business.” By selectively exiting less profitable municipal contracts, the company has improved the overall health of its residential portfolio. This strategy has proven successful, with the residential business line achieving an EBITDA margin of over 20% for the first time in six years, despite lower volumes.

This disciplined approach to business mix, combined with strong performance in its commercial and industrial lines and continued synergy capture in its Healthcare Solutions segment, highlights a sophisticated operational strategy focused on profitable growth.

Rewarding Shareholders and Strengthening the Balance Sheet

WM translated its strong operational performance directly into shareholder value. The company returned $729 million to shareholders in the first quarter, consisting of $385 million in cash dividends and $344 million in share repurchases. This is part of a larger capital allocation plan for 2026 that includes a 14.5% dividend increase—its 23rd consecutive annual raise—and a new $3 billion share repurchase authorization.

Furthermore, the company successfully managed its debt, bringing its leverage ratio back within its target range of 2.5 to 3.0 times total debt to EBITDA. This achievement demonstrates prudent financial management following the major acquisition of Stericycle in 2024.

Fish elaborated on this strategy, stating, “Our start to 2026 strengthens our conviction in the ability to harvest the benefits of our strategic investments in recycling, renewable energy, a medical waste platform, technology, and our fleet. Our balance sheet remains flexible, reflecting our financial discipline and positioning WM to capitalize on opportunities in any economic environment.”

The quarter’s results serve as a powerful validation of WM’s multifaceted strategy. By balancing pricing power with operational efficiency, investing boldly in high-growth sustainability sectors, and maintaining a disciplined approach to capital allocation, the company has set a strong pace for the year ahead, solidifying its leadership in a rapidly evolving environmental solutions landscape.